Overview
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 click the Create Entries tab. Then, under the Expenses menu, click Payables.
- Select a list view (other than the Recently Viewed list view).
- Click the Payable that you would like to create a Credit Memo for (or just create a new Payable from scratch).
- If an existing Payable is selected, on the Payable page, click Clone w/ Lines. The Clone Payable intermediate screen displays.
- On the Clone Payable page, enter the Date for the new Credit Memo.
- Click the Clone as Credit Memo checkbox.
Note: The Clone as Credit Memo checkbox will only display if you initially selected a Payable invoice. If you selected an existing Credit Memo, this checkbox will not be available.
Note: Click here to view the above image in full screen.
Note: If you have Multi-Currency enabled, the Currency drop-list will display on the Clone Payable intermediate screen. If you change the currency for the Credit Memo, the Amounts will be the same as the original Payable, they are not converted to the new currency. However, the Ledger Amount will display in the currency of the Ledger. - Click Clone Payable. The Edit dialog box for the new Credit Memo displays.
- Edit/update the information, as needed.
- Click Save.
Notes:
- If you need to edit the amount on a line, scroll to the Payable Line(s) related list and click Mass Add/Edit Rows. Then, make changes, as necessary.
- The Payable Line(s) will display the Quantity as a negative number or the Unit Cost as negative, depending upon your setup for this option in the Enablements screen.
With Header Level Posting (HLP) enabled, if tax was calculated, the Tax Amount displays as part of the Payable Line.
Note: Click here to view the above image in full screen.
With Line Level Posting (LLP) enabled, if tax was calculated, the Tax Amount displays as a separate Payable Line.
Tip: To associate the credit memo with an original payable, place "Credit Memo for Payable number xxxxxxxxxx" in the Proprietary Payable Number field.
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- With the Magnolia - Home release, The Payable Line(s) will display the Quantity as a negative number or the Unit Cost as negative, depending upon your setup for this option in the Enablements screen.
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- The ability to clone a Payable as a Credit Memo is available with the Lily release.
Comments
3 comments
Sometimes a vendor will send a refund check to close out a credit memo. We record refund checks as Accounting Seed cash receipts. Is there some way (even perhaps a slightly roundabout way) to apply that cash receipt to a credit memo?
Hi Lloyd,
There is a round about way, but I want to mention that we do have a more seamless way on our roadmap.
The work around is to create a billing to close out the cash receipt and then to create a payable to close out the vendor credit memo. The related GL accounts can just be a clearing liability account so that you don't actually record any revenues or expenses.
Once the billing is created, apply the cash receipt to it. Once the payable is created, apply the vendor credit memo to it.
Thank you,
Ryan
Glad to hear that a better alternative is in the works, as it's painful to have to create two dumby transactions do do multiple postings to record a small check from a vendor. It cost more in our labor than the amount of our refund.
Any idea what the time frame is on this?
Thanks Ryan!
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