Vendors that owe you a refund will sometimes send credit memos for you to use at your discretion. The process of creating a vendor credit memo is almost identical to entering a vendor invoice. The main difference is that the account payable lines will be entered with negative values. If the amount of the account payable is negative, the invoice type will automatically switch to a credit memo.
Create a Vendor Credit Memo
- Create a Credit Memo for the unpaid balance of the payable.
- Navigate to Accounting Home and under Cash Out click Payables (Vendor Invoices).
- Click the Payable that you would like to create a Credit Memo for (or just create a new Payable from scratch).
- If creating the Credit Memo from an existing Payable, on the Payable page click Clone w/ Lines, enter a date, and on the Edit screen click Save.
- On the Payable page, in the Payable Lines panel, click the Mass Add/Edit Rows button.
- On the Payable Edit page, edit the amount to a negative value.
- Click Save & Post.
- On the Payable page click the Apply Credit Memo button.
- Click the arrow beside a Payable and click Save & Complete.
Note: The transactions created when posting a credit memo are a credit to the GL Expense Account selected on the payable line, and a debit to the AP Control Account.
Tip: To associate the credit memo with an original payable, place "Credit Memo for Payable number xxxxxxxxxx" in the Proprietary Payable Number field.