cancel
Showing results for 
Search instead for 
Did you mean: 

CREDIT MEMO

Former Member
0 Kudos

Hi ,

Can anyone please tell the credit memo complete cycle?

I mean when it starts and where the cycle ends with what documents.

thanku

kanna

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi Kanna

If we have to pay back to the customer then normally Credit Memo is created.

So, let us see in which cases we need to pay back to the customer.

Scenario 1 and its process

If your customer has purchased some goods from you, he has already paid for it and afterwards due to some due to some reason ( damage, not selling , poor quality etc.) he has returned back few goods to you.

So, you have to compensate him for this Return as he has already paid for it.

Again, this can be in two ways.

Either you will compensate by issuing him a Credit memo OR you will replace the goods with fresh stock.

The process, If you want to issue a Credit memo for the Return

First, you have to create a "Return order"with order type "RE" with ref to either Sales order or the Billing document.

This Retuen order is also called Return request and can also be created with out any reference document.

The Return order always contains a Billing block and without removing the block you can create a subsequent document.

So, go to the change mode of the Return order (t.code VA02), remove the billing block by choosing the blank space from the drop down in the overview screen and save the document.

Now, the document is released for Billing(credit memo) and this is called Release procedure.

Go to,VF01 to create the Credit memo for Return, put your Return order number and press enter and save the docuemnt. save it.

Your Credit memo for return is created.

Remember, "Credit memo for Return" is always create with ref to the "Return order" and not the Return delivery.

Scenario 2 and its process

Sometime, you ask the customer not to return the goods physically to you, you believe him and will issue the Credit memo to him for the same.

In this case no Return order is created as customer has not returned anything to you physically.

Here, we first create a "Credit memo request (CR)" with ref to either the Sales order or Billing document.

Then remove the billing block from the "Credit memo request" and from this Credit memo request again remove the billing block.

After removing the billing block, you can create a "Credit memo" with ref to this Credit memo request.

Normally, every organisation follow Release procedure. If it is not followed then Credit memo is created directly from the Billing document.

Scenario 3 and its process

Suppose you have bill the customer for which customer has paid you and after that you found that by mistake you have charged more from the customer.

So, you have pay back the customer the extra amount through a Credit memo.

Similarly mistake can be in quantity also (you may have sent less quantity).

In this case ,first we create an "Invoice Correction Request (RK)" with ref to the Invoice(incorrect invoice).

Remember Invoice correction request always refers the or created from the Billing document (Incorrect invoice to be more specific).

This Invoice correction request also contains a billing block.

So ,go to the change mode (VA02) and remove the billing block like explained earlier.

Now, you can create a Credit memo refering this "Invoice correction request" .

Answers (2)

Answers (2)

Former Member
0 Kudos

Dear Kanna,

Functionality: Credit Memo, is being used to give credits to your Payer on excess billing or to settled-down access billing.

A credit Memo, could be created with reference to:

1. Invoice

2. Returns

3. Credit memo req.

For more, please go-through some post (I think, this would be really helpful):

Best Regards,

Amit

former_member204513
Active Contributor
0 Kudos

Dear Kanna,

There are two scenerioes to raise the credit memo

1.When the customer send the returns.

Return sales order (RE)>Returs delivery>Returns Credit memo

2.When the company charges price extra or offers like incentives based on the sales volume or Expairy goods or damaged goods.

Credit memo request (Invice will take as reference document here to create credit memo request)---->credit memo.

I hope this will help you,

Regards,

Murali.