Vendor Credit Memos

Vendor Credit Memos

A Vendor Credit Memo is a document issued to reduce the amount owed to a vendor. Common uses include returns, overpayments, pricing discrepancies, or billing errors. It adjusts your accounts payable balance, ensures accurate financial records, and reflects the reduction in the outstanding amount due to the vendor.

Viewing the List of Vendor Credit Memos

To view the list of Vendor Credit Memos:
  1. Navigate to Purchases > Purchase Returns and Vendor Credits.



From the Purchase Returns and Vendor Credits List View, you can:
  • Create a new Vendor Credit Memo.
  • Email or Print a Vendor Credit Memo.
  • View related details, including: Transactions, General Journal, Inventory Journal, and Audit Logs.
  • Attach files to a selected Vendor Credit Memo.
  • Export the Vendor Credit Memo List to Excel, PDF, or other formats.
  • Manage columns: add, remove, or reorder.
  • Refresh the Purchase Returns and Vendor Credits List.
  • Create multiple custom views using: Filters, Sorting, Ordering and Conditional Appearance Settings.

Viewing an Individual Vendor Credit Memo

To view a specific Vendor Credit Memo:
  1. Navigate to Purchases > Purchase Returns and Vendor Credits.
  2. In the Purchase Returns and Vendor Credits List View, double-click the desired Vendor Credit Memo.



From the individual Vendor Credit Memo, you can:
  • Edit the Vendor Credit Memo.
  • Email or Print the Vendor Credit Memo.
  • View related details, including: Transactions, General Journal, Inventory Journal, and Audit Logs.
  • Attach files to the Vendor Credit Memo.

Creating a New Vendor Credit Memo

To create a new Vendor Credit Memo:
  1. Navigate to Purchases > Purchase Returns and Vendor Credits.
  2. Click Create > New, or generate the memo from a Bill.
  3. Fill in the necessary details:
    Main Tab:
    • Vendor: Select from the drop-down list. If the vendor has an open Bill, a popup will appear asking you to apply the memo. To create an independent memo, close the popup.
    • Date: Adjust as needed.
    • Vendor Credit Memo #: Enter manually or let the system auto-assign.
    • Type: Select Credit Memo.
    • Reference Number (RMA/Ref #): Add additional references if necessary.



  4. Shipping Tab:
  5. Accounting Tab:
    • Specify the A/P Account.



  6. URL Tab:
    • Add a URL for reference, such as supporting documentation or vendor portals.



  7. Memo Tab:
    • Add an External Memo (visible on printed memos) or Internal Memo (internal use only).



  8. Line Details Table
    • Items Tab: Adding Product/Service Items.
      This option helps specify which products or services the memo applies to, ensuring proper inventory or service cost adjustments. For example, if returning goods, the inventory levels and associated costs are updated accurately.

      • Click Add to include items to return.
      • Enter Item from the drop-down.
      • Specify details: Quantity, UoM (Unit of Measure), and Cost.
      • Adjust the Return From Location, Reason Code, Project, or Class as needed.



    • G/L Accounts Tab: Adding G/L Accounts.
      Adding GL accounts allows for direct allocation of the credit to specific expense, liability, or revenue accounts. This ensures that the credit memo aligns with your chart of accounts and maintains accurate financial reporting.

      • Click Add to include GL Account lines.
      • Enter the GL Account code or description, Amount, Line Memo (optional), Assign to a Project or Class (optional).



  9. Save changes using Save or Save and Close.

Creating a Vendor Credit Memo from a Bill

Vendor Credit Memos may or may not be associated with a Bill. To associate a vendor credit memo with a Bill:
  1. Navigate to Purchases > Bills.
  2. Select the relevant record.
  3. Click Create > Vendor Credit Memo. Fields will auto-fill based on the selected Bill.



Accounting Impact of Vendor Credit Memos

Recording a Vendor Credit Memo creates the following transactions in the General Journal:
  • Debits: Accounts Payable.
  • Credits: Expense Account or Inventory Account, depending on the nature of the credit (e.g., service, inventory, or adjustment).
These entries ensure accurate tracking of vendor credits and maintain the integrity of your financial records.


By using Vendor Credit Memos in CustomBooks™, you can efficiently manage vendor credits, ensure accurate financial records, and maintain control over accounts payable.

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