When you enter a credit/debit memo, you can match it to existing invoice(s), purchase orders, or receipts to have Payables automatically copy the accounting information and create invoice distributions for the credit/debit memo.
For example, if you receive a credit for items you returned to a supplier, you can enter a credit memo and match it to the original invoice you entered to ensure that the credit memo distributes the credit to the same accounts originally charged.
If you match a credit memo to an invoice for the full amount of the invoice, then the allocations on the invoice are copied to the credit memo. If you match a credit memo to only a portion of the invoice, then no allocations are copied to the credit memo. You can manually allocate credit memo distributions, or you can allow Payables to allocate during Invoice Validation of the credit memo.
Payables calculates discounts on credit and debit memos if the following conditions are met:
You match them to invoices you paid using a discount.
You use the same payment terms that were used on the original invoice
The credit memo must be paid within the terms of the discount.
You can match to an invoice even if it is paid and posted. You can match the credit memo to multiple invoices, and at different levels of detail. Your available choices depend on whether the originating invoice was purchase order matched or not.
If the original invoice is not purchase order matched (basic invoice), you can:
Match to an invoice. Payables prorates your credit amount based on the invoice distribution amounts of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the distributions of the original invoice.
Match to specific invoice distributions. You can allocate the credit amount to specific invoice distributions of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the original invoice distribution that you select. For example, you order three chairs for three different departments and return one. You can match a credit/debit invoice to the original distribution for that department to ensure that the credit matches the charge.
If the original invoice is purchase order matched, you can:
Match to specific invoice distributions. You can allocate the credit amount to specific invoice distributions of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the original invoice distributions that you select. For example, you may order three chairs for three different departments and return one. You can match a credit/debit invoice to the original distribution for that department to ensure that the credit matches the charge.
Payables updates the quantity billed for each of the originally matched purchase order shipments and their corresponding distributions by the credit quantity you enter. Payables also updates the amount billed on the purchase order distributions.
Match to purchase order shipments. Payables prorates, based on the quantity billed, your credit amount across all purchase order distributions associated with the purchase order shipment to which you match the credit/debit memo. Payables automatically creates invoice distributions for the credit/debit memo based on the purchase order distributions associated with the purchase order shipment you match to.
Payables updates the quantity billed for each purchase order shipment and its corresponding distributions by the amount of the credit/debit memo. Payables also updates the amount billed on the originally matched purchase order distributions.
Match to purchase order distributions. Payables automatically creates invoice distributions for the credit/debit memo based on the purchase order distributions.
Payables updates the quantity billed for each purchase order shipment and its corresponding distributions by the amount of the credit/debit memo. Payables also updates the amount billed on the originally matched purchase order distributions.
Match to a Receipt. Match credit and debit memos to receipts when you return goods to a supplier after you enter an invoice for the goods.
Automatic Debit Memos. If you enable the supplier site option, Create Debit Memo From RTS Transaction, then for each receipt transaction selected in the Receiving Returns window that is a Return to Supplier (RTS) transaction, the system automatically creates one debit memo in Payables. The debit memo is prorated across all purchase order distributions associated with the selected receipt transaction. The debit memo is automatically matched to the purchasing document (purchase order or receipt) that is specified on the purchase order shipment being returned.
Note: If creating the debit memo would reduce the invoice quantity billed below zero, then the system does not automatically create the debit memo.
Record a Price Correction. Use a price correction when a supplier sends an invoice for a change in unit price for an invoice you have already matched to a purchase order or receipt. You can record a price correction by selecting Price Correction in the Find window when you match a credit/debit memo to a purchase order shipment, purchase order matched invoice distribution, or receipt. When you record a price correction for a credit/debit memo, you are recording a price decrease from the original invoice. You must specify the number of the original invoice in the Find window.
Payables updates the invoiced unit price of previously matched purchase order shipment or distributions without adjusting the quantity billed so you can track price variances; Payables also updates the amount billed on the originally matched purchase order distributions.
You can match credit and debit memos to invoices only in the Invoice Workbench, not in Quick Invoices.
To match a credit/debit memo to an invoice or invoice line:
In the Invoice Workbench, enter a Credit Memo or Debit Memo type invoice. See: Entering Credit/Debit Memos.
Enter a negative invoice amount and all basic invoice information but do not manually enter the distributions. See: Entering Basic Invoices.
In the Match Action field, select PO to correct a matched invoice line or Invoice to correct an unmatched invoice line. Click the Correction button.
In the Find Documents for Correction window, enter search criteria for the invoice.
Choose the Find button. Payables navigates to the Invoice Corrections window.
To see more information about an invoice, select it and choose the Invoice Overview button.
Select the invoice and enter a Credit Amount.
To match in further detail, choose the Select Lines button. Select each invoice line you want to match to and enter a Credit Amount.
Choose the Correct button to correct the invoice.
To review the new invoice lines, choose the lines tab from the Invoices window.
When you create a Credit memo to correct an unmatched invoice, an error displays.
Use Quick Credit to create a credit or debit to completely reverse an existing invoice record.
To enter a credit/debit memo using quick credit:
In the Invoice Workbench enter a Credit Memo or Debit Memo Invoice Type. Enter a negative invoice amount and all basic invoice information. See: Entering Basic Invoices.
Enter Immediate Payment Terms, if appropriate.
Check the Quick Credit check box.
Enter the invoice number to be credited in the Credited Invoice field.
Each purchase order shipment indicates whether you should match to either a purchase order or receipt. You can match only to the document type (purchase order or receipt) specified by the purchase order shipment.
To match a credit/debit memo to a purchase order shipment or receipt in the Invoice Workbench:
Enter a Credit Memo or Debit Memo type invoice. See: Entering Credit/Debit Memos.
Enter a negative invoice amount and all basic invoice information but do not manually enter the distributions. See: Entering Basic Invoices.
In the Invoice Workbench, select either Purchase Order or Receipt from the Match Action field. Choose the Match button. Payables opens the Find Purchase Orders for matching window or the Find Receipts for Matching window.
Enter search criteria for the document you want to match to and choose the Find button. Payables navigates to either the Match to Receipts or Match to Purchase Orders window.
Create invoice distributions by matching to one or more purchase order shipments or receipt lines.
To match to purchase order shipments, select the shipment and enter either a Quantity Invoiced or Match Amount. Payables automatically calculates the remaining field (Quantity Invoiced x Unit Price = Match Amount). You can optionally change the Unit Price, which defaults from the purchase order.
To match to a receipt line select the receipt line and enter a value for either Quantity Invoiced or Match Amount. Payables automatically calculates the remaining field (Quantity Invoiced x Unit Price = Match Amount). You can optionally change the Unit Price, which defaults from the purchase order.
Note: The Quantity Invoiced cannot reduce the Quantity Billed below zero.
If you want to match in further detail, choose the Distribute button and continue the match at the purchase order distribution level. If you are matching to a receipt, the Match to Purchase Order Distributions window displays items that were delivered.
If you want to automatically create allocated freight or miscellaneous distributions, enable the Freight/Misc. check box. See: Allocate window.
Choose the Match button to create invoice distributions for the credit/debit memo based on the matches you made.
To review the new invoice distributions, choose the Distributions button in the Invoices window.
The Validate Related Invoices button validates related invoices depending on which type of invoice is selected:
If you select an invoice, then Validation includes all price corrections and credit/debit memos associated with that invoice.
If you select a price correction, Validation includes the base matched invoice.
If you select a credit/debit memo, then Validation includes all invoices associated with the credit/debit memo.
To validate related invoices:
In the Invoices window, select one or more invoices and choose the Actions button. Check Validate Related Invoices, and choose OK.