Customer Credit Memos

Customer Credit Memos


A Customer Credit Memo is a document used to reduce the amount a customer owes on a previously issued invoice. It reflects returns, overcharges, cancellations, or other adjustments and ensures accurate customer balances and financial records.

Why Use a Credit Memo?
Credit memos are typically issued for the following reasons:
  1. A customer returned goods or canceled services.
  2. The original invoice contained an error or overcharge.
  3. A discount or rebate needs to be applied after invoicing.
  4. An adjustment is required to correct a customer’s balance.

When issued, the credit memo either:
  1. Reduces the balance due on a specific invoice.
  2. Creates a customer credit that can be applied to future invoices.
  3. Is refunded to the customer (depending on your business process).

Viewing the List of Credit Memos

To view the list of Customer Credit Memos:
  1. Navigate to Sales > Sales Returns and Customer Credits.


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

Viewing an Individual Customer Credit Memo

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



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

Creating a New Customer Credit Memo

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



    2. Shipping Tab:
      1. Enter the Return To Location.
      2. Specify the Reason Code.
      3. Enter the Ship From Address.



    3. Accounting Tab:
      1. Specify the A/P Account.
      2. Also, the Refund Account.



    4. Discounts Tab:
      1. Add a discount by line item (by amount or by percentage), if applicable.



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



  4. Line Details Table
    1. Items Tab: Adding Product/Service Items.
      1. This option helps specify which products or services the credit memo/return applies to, ensuring proper inventory or service cost adjustments. For example, if returning goods, the inventory levels and associated costs are updated accurately.
      2. Click Add to include items to return.
      3. Enter Item from the drop-down.
      4. Specify details: Quantity, UoM (Unit of Measure), and Price.
      5. Adjust the Return To Location, Reason Code, Project, or Class as needed.



    2. G/L Accounts Tab: Adding G/L Accounts.
      1. Adding GL accounts allows for direct allocation of the debit to specific expense, liability, or revenue accounts. This ensures that the credit memo aligns with your chart of accounts and maintains accurate financial reporting.
      2. Click Add to include GL Account lines.
      3. Enter the GL Account code or description, Amount, Line Memo (optional), and Assign to a Project or Class (optional).



  5. Save changes using Save or Save and Close.

Accounting Impact

Credit Memos Debit Income and Inventory and Credit Accounts Receivable and Cost of Goods Sold.

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