credit memo

[Former Member]

hi,

could you tell me what is credit memo?

thank you,

raj.

[Former Member · Accepted solution]

1. A transaction that reduces Amounts Receivable from a customer is a credit memo. For eg. The customer could return damaged goods.

2. Credit memo request is a sales document used in complaints processing to request a credit memo for a customer. If the price calculated for the customer is too high, for example, because the wrong scale prices were used or a discount was forgotten, you can create a credit memo request. The credit memo request is blocked for further processing so that it can be checked. If the request is approved, you can remove the block. The system uses the credit memo request to create a credit memo.

You can use credit memos in Sales and Distribution (SD) for assigning credit memo requests to the open invoices and in Financial Accounting (FI) for assigning credit memos and payments to the open invoices and carry out clearing with them. If you use both Financial Accounting (FI) and Sales and Distribution (SD), there is a 1:1 relationship between the credit memo request and the credit memo item posted in Financial Accounting (FI). As soon as you bill the credit memo request together with other sales orders, or distribute the items of one credit memo request to several billing documents, the assignment is no longer valid and the system will not process it.

For credit memos, credit memo requests, and payments, you have the following assignment options:

- Assignment to a single invoice

- Assignment of a partial amount to an invoice

- Assignment to several invoices

When you post credit memos, the payment programme processes them automatically. If the credit memo is specifically related to a particular open invoice item, the payment program automatically attempts to offset the credit memo against the open item. If it is not possible to completely offset the credit memo against an invoice, you can post a debit memo to the vendor, who is to reimburse the amount. Then you can apply a multilevel dunning program.

3. As mentioned above, creating a credit memo request enables you to create credit or memos based on a complaint. For this first create a sales document with the order type for a credit memo request. You can create the credit memo requests in the following ways:

– Without reference to an order

– With reference to an existing order

Here you enter which order the complaint refers to.

– With reference to an invoice

Here you enter which invoice the complaint refers to.

In all cases, you specify the value or quantity that should be in the credit memo

5. You can block the credit request from being billed in Customizing. Go to Sales -> Sales Documents -> Sales document header -> Define sales document type and select the billing block field in the billing section. This request can later be reviewed along with similar ones, - if necessary, by another department. The request for a credit memo can then be approved or rejected.

Regards,

Rajesh Banka

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[Former Member]

Hi,

1. In case of returns, the cycle is

a. Create Return Sales order (VA01)with respect to Billing document

b. Create Returns Delivery (VL01N) with respect to Return sales order

c. Create Credit Memo (VF01) w.r.t delivery.

No need of credit memo request in this case. You can create a credit memo request when you have wrongly billed the customer and there is no goods movement involved.

2. Credit memo request is created when you have wrongly billed the customer for some extra amount or some adjustment is involved.

in case of Returns :

First we have to create the Credit Memo Request( Sales Document) with Reference to the Preceeding Document and we will create the Credit memo ( Billing Document) with reference to this Credit Memo Request.

Credit Memo Request:

If the customer complains that the price was miscalculated (for example, too high) you request a credit memo for the appropriate sum, and you do not take the goods back.

Invoice Correction Request:

The invoice correction request works in the same way as credit and debit memo requests, but here you enter the price or quantity that should have been calculated. The system then calculates the difference and creates either a debit or a credit memo, depending on whether the difference is negative or positive.

Regards

AK

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[Former Member]

hi

credit memo is an sales document which is prepared when the customer has been over billed or when the customer returns the goods because of damage or when he is unable to sell.

the document flow is as follows:

VA01 and the document type is g2 ( credit memo can be prepared with reference to an invoice so that it can be easy for traceability)

item category will be g2n

post goods receipt VL01n

then invoice vf01

we can maintain a block in the credit memo so that an authorised person can create a credit memo

regards

prashanth

[Former Member]

Hi..

Because of any reasons,if the company has to pay some amount back to the customer ,we need to CREATE the billing document"CREDIT MEMO".

The credit memo can be created with reference to the sales document"CREDIT MEMO REQUEST".

Creating CREDIT MEMO...

create VF01-create

In the field document specify the CREDIT MEMO REQUEST NUMBER and EXECUTE. (save it).

When we save the credit memo,the system posts the accounting document to finance in which the company's revenue account is DEBITED and the customer's account is CREDITED.

Hope this helps you giving an idea..

SURIYA.

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