Credit and Debit memo - Type of Billing

[Former Member]

Hello Friends,

Credit and Debit memo creation can reference a Billing doc or Sales Order or it can be created directly.

So, is credit memo or debit memo Order-Related billing ?

Can i confirm that because Credit memo correct values , it does not generally correct any stock, even in Returns scenario?

regards

John

[Former Member · Accepted solution]

Credit memo and debit memo are generally created either referencing to a biling document or without any reference. Yes, these are order related billing documents. It does not have any inventory impact. It only have accounting impact.

When it comes to returns scenario, it is a bit different. It depends on the business situation. There are a few ways that you can handle returns. Your customer returns the goods back to you for one of the reasons (over delivery, quality problem, damaged stock etc). You will take it back to your stock. Your inventory increases. Then, you cannot create a order related credit memo. Instead you create a return document referencing to the billing document, then do a post goods receipt (delivery document) and issue a credit memo to the customer. So, inventory is impacted and this type of credit memos (or returns credit as usually referred to) are delivery related.

Else, you will want your customer to destroy the stock (which your customer reports a damage and bringing it back to your plant costs you more). Then, you will only issue a credit memo to your customer. You will not receive any stock and the stock is not impacted. So, this type of documents become your order related billing docs... Here there is no impact on inventory and only financial impact is seen.

Hope it helps...

Regards,

Mukund S

[former_member186528]

Pretty Good Answer , thanks a lot

[Former Member]

In addition to the points mentioned by our friends, I would like to iterate one point.

We can also make use of 'Invoice Correction request" document type, which is available in the Std SAP.

Rgds

Sumanth.Gururaj

Consultant/Systems Analyst

SAP SD/MM/CIN

[Former Member]

This message was moderated.

[Lakshmipathi]

is credit memo or debit memo Order-Related billing ?

Yes predominently, debit note or credit note would be created referencing either the return order or debit memo or credit memo request and hence, we can call it as order related billing.

it does not generally correct any stock

Yes either the stock quantity or stock value will always be adjusted ONLY against the delivery (it could be an issue delivery or return delivery) and not against credit or debit memo.

thanks

G. Lakshmipathi