Credit memo request / credit note

[Former Member]

I have a doubt in credit memo request setting.

I have setup to create a credit memo req in sales with ref. to either billing doc or sales doc.

In copy control I have chosen pricing type 'D'. We manually maintain prices in Sales.

Say for eg. we have delivered the below to our customer.

material 1 - 2 pieces - each at $2000

material 2 - 1 piece - each at $3500

My customer didnot return the part, but instead comment that the price of material 2 is too high.

So the client wishes to change the price of the material 2 to $2800/piece instead of $3500.

I notice that when I mark the item 2 with reason for rejection code as "too expensive", in my Credit Note I see $0.00 to be copied.

Am not clear here. Should I change the pricing type in my credit note to allow changes so that my new price is only at $2800?

Where should I do this?

Also should I delete the material 1 from the credit memo req document or should I delete it from my credit note?

I quite don't know why should we keep the material when there is no problem that we already charged the customer & they have payed us too.

Thk,

Ann

[Former Member · Accepted solution]

The Configuration as described is correct, but there is difference in process handling.

When you create a credit memo with reference to Sales Order or Billing Document, by default the prices will be picked from original document. Here you require to maintain order reason & not reason for rejection, by maintaining the appropriate change in price / qty. You are getting the wrong result as you have selected reason for rejection. Here you are not rejecting any material, but issueing credit note for rate difference / qty difference.

Hope this answers your query.

Regards,

Rajesh Banka

Reward points if helpful.

[Former Member · Accepted solution]

Thanks Rajesh !

Can you highlight what is the use of using the "Item Rejection reason" then?

So you mean to say that I need to change the quantity/correct price in my credit memo request? So that the right amount copied to the credit note?

Also curious to know, how to handle these cases,

case 1: say if the customer has already paid the company excessively

case 2: also if only the invoice is sent to the customer, but if they have not paid the company

My client does not want to cancel the invoice originally created.

How to handle these cases then ?

Pls advise.

[Former Member · Accepted solution]

"Item Rejection reason" may be used in Sales Order, when there are multiple line item & some of them are not to be executed. The items which are not to be executed, should be maintained with "Item Rejection reason"

<i>So you mean to say that I need to change the quantity/correct price in my credit memo request? So that the right amount copied to the credit note?</i>

The anwer to this is Yes.

<i>case 1: say if the customer has already paid the company excessively</i>

Irrespective of receipt of excess payment Credit note can be issued. You need not cancel original invoice & the credit balance can be settled in latter transaction or can be refunded through FI.

<i>case 2: also if only the invoice is sent to the customer, but if they have not paid the company</i>

In this case, the customer can make the payment as per outstanding due in his account, as credit note will give an effect in accounting. You need not cancel original invoice & the credit balance can be settled in latter transaction or can be refunded through FI.

Hope this information helps you.

Regards,

Rajesh Banka

Reward points if helpful.

[Former Member · Accepted solution]

Rajesh thanks for your time too !

case 1: say if the customer has already paid the company excessively

Say if the cost we charged the cust is $2000, but it's worth for $1800 only. So should I enter the difference of $200 in the Credit memo request (so that this $200 gets copied to my credit note as well)

or should I enter the correct amount as $1800 in my Credit memo request?

(so that this $1800 gets copied to my credit note as well)

case 2: also if only the invoice is sent to the customer, but if they have not paid the company

similarly, should I enter $200 or $1800 in the Credit memo request

[Former Member · Accepted solution]

Yes, this is okay for the Sales Order.

"Item Rejection reason" may be used in Sales Order, when there are multiple line item & some of them are not to be executed. The items which are not to be executed, should be maintained with "Item Rejection reason"

But the use of it in credit note?? am not very very clear..

can someone explain more?

[Former Member · Accepted solution]

Hi,

The best way would be to use the selection list when creating the credit memo request with ref. to a sales order. In the dialog box, you enter the order # and use the Selection list icon in the dialog box. in the resultant screen, you can decide which item to be copied to the credit memo request. This will avoid the confusion of Item rejection & reason etc.

However, even in a credit note, the use of Rejection reason plays the same role. by using the rejection reason, you block the line item from getting copied to the final credit memo.

Hope, this helps!

S. Siva

[Former Member · Accepted solution]

Siva, yes I could try the Selection list.

But to comment on the Rejection reason in the credit memo request.

If an item is blocked, the item still gets copied to the Credit note. But only the invoice amount is zero.

If I mark that line as "Too expensive" , does the meaning of making this rejected, means we are completely rejecting the item?

[Former Member · Accepted solution]

Pls give some idea for the below,

case 1: say if the customer has already paid the company excessively

Say if the cost we charged the cust is $2000, but it's worth for $1800 only. So should I enter the difference of $200 in the Credit memo request (so that this $200 gets copied to my credit note as well)

or should I enter the correct amount as $1800 in my Credit memo request?

(so that this $1800 gets copied to my credit note as well)

case 2: also if only the invoice is sent to the customer, but if they have not paid the company

similarly, should I enter $200 or $1800 in the Credit memo request

thx a lot !

[Former Member · Accepted solution]

I think this behavior of the system is controlled using the copy control from order to bill, item level - data transfer routine. SAP recommends to copy the Items with reason for rejection with a Zero value so that we can have a track of it. Otherwise, the descriptions in the reason for rejection is for analysis purpose for the business to define where we stand in the market place.

<i>If I mark that line as "Too expensive" , does the meaning of making this rejected, means we are completely rejecting the item?</i>

Yes, this means the item is rejected and will have no effect on the final net value of the document.

Hope this helps!

Siva

[Former Member · Accepted solution]

Siva thanks for your explanation ! Was clear.

Can you share some on the below,

case 1: say if the customer has already paid the company excessively

Say if the cost we charged the cust is $2000, but it's worth for $1800 only. So should I enter the difference of $200 in the Credit memo request (so that this $200 gets copied to my credit note as well)

or should I enter the correct amount as $1800 in my Credit memo request?

(so that this $1800 gets copied to my credit note as well)

case 2: also if only the invoice is sent to the customer, but if they have not paid the company

similarly, should I enter $200 or $1800 in the Credit memo request

thx a lot !

[Former Member · Accepted solution]

Hi,

The Net value of the Credit note document will be credited to the customer account, which means his overall outstanding payable amount will be decreased by the credit note amount.

once we understand the above, then it is clear that we should enter the difference amount only that we want to credit the customer - 200$. In both the cases, this logic holds good, rite?

Thanks,

Siva

[Former Member · Accepted solution]

Siva has already answered. The reply being the same, i am not mentioning here.

Regards,

Rajesh Banka

Reward points if our correspondence hve helped you & resolved the query.

[Former Member · Accepted solution]

Siva well in that case, how do we/customer know the exact rate of the material ??

[Former Member · Accepted solution]

Rajesh, but just a last query..how do we know the exact/correct price if we only enter the credit/debit amount in our credit memo request / debit memo request?

Pls share

[Former Member · Accepted solution]

Hi,

That is a question for the business to answer. The selling price is decided as 2000$ but since the customer complained, they wanted to give a discount for 200$. In this case, since the Invoice is already generated for 2000$, we are adjusting using a credit note. Assume if this is still in the sales order stage, we could have added one more discount type and sold at 1800$.

Since this is not a Normal business process but a rare accomodation of the customer request, there is no way we can track the exact price for this transaction using SAP but, using manual calculation.

Hope, this helps!

Thanks,

Siva

Award points for useful answers!

[Former Member · Accepted solution]

Rajesh, Siva you have solved my problem !

Moreover I have understood very clearly !

Appreciate your ideas sharing !

I need to reward as "Solved my probelm"

[Former Member]

Hi,

Classic scenario to make use of Invoice correction request instead of credit memo request.

You can create a Invoice correction request (Order type: RK) with ref to a Invoice document. Both the items will be copied to the new document with a credit & debit entry. you can decide to delete both the credit & debit entry for Item 1 which has no change in price.

You can alter the price for the second item alone and the difference in price will be Invoiced as a Credit note to the customer.

Pls explore this order type which is widely used across SAP companies for the scenario you have described.

Hope, this helps!

Thanks,

Siva

[Former Member]

Sure Siva. I know this too. But my client wants to reference to the Sales order instead to the invoice.

just curious