Accounts Receivable Credit Memos
A Credit Memo is created when a credit needs to be issued to a Customer account for previously invoiced services, a customer referral credit, or to generate a credit to write off bad debt or generate a customer refund check. A Credit Memo may be manually generated or created by using the right-click credit off functions available when highlighting an invoice with an open balance from the Customer Explorer.
A Credit Memo may be applied to any invoice with an open balance. A Credit Memo may be generated from the Accounts Receivable module or from a Customer Explorer record.
Partially Paid Invoices
If the balance of an invoice needs to be credited-off where the invoice has been partially paid with a cash payment and/or the application of a Credit Memo, the User has two options:
·Credit off the balance of the invoice to a miscellaneous G/L Account
·Create a Credit Memo and apply it to the invoice manually.
Crediting off the balance of an invoice to a miscellaneous G/L account is typically used when the balance of an invoice is being written off to a bad debt account. If this is not the case, the User should create a Credit Memo and apply to the invoice manually.
The User creating this type of Credit Memo will need to review the Invoice Items and the tax group associated with the invoice to be credited to determine the amount for Items and the amount of tax to be entered on the Credit Memo. If sales tax is being credited off, your company should set up an Invoice Item in SedonaSetup for this purpose and select the item type of TX for that Invoice Item. Instead of selecting an income account, select your sales tax liability account, which will reduce you sales tax liability when the Credit Memo is posted.
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