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 Overview

On occasion, you may need to apply a credit memo amount to a specific open invoice using Cash Receipts Entry.

Note If you want to issue a credit card transaction for the credit memo, the credit memo must be applied to an invoice that was paid by a credit card. You are limited to one of the credit cards used to pay that invoice and to the total amount paid by credit card based on the appropriate security setup.

To apply a credit memo to an invoice

1. Select Accounts Receivable Main menu > Cash Receipts Entry. If you have batch processing enabled, the Cash Receipts Entry Batch window appears. Enter the batch number and click Accept.

2. In the Cash Receipts Deposit window, enter the deposit number, description, bank code, and deposit date. For more information, see Cash Receipts Deposit - Fields.

3. In the Cash Deposit Amount field, enter the deposit amount (this amount can be zero if no cash is received) and click Accept.

4. In Cash Receipts Entry, enter the customer number. For more information, see Cash Receipts Entry - Fields.

5. In the Check No. field, type Apply.

6. In the Amount Received field, enter the amount received, or 0 if no cash is received. Enter the credit memo amount as a negative number if cash is received.

7. To apply a credit memo for an open item customer, click Auto. The system applies the amount received to aged invoices.

8. Click the Lines tab.

9. In the Invoice No. field, enter the credit memo number. This number must have the suffix -CM and must exist in the Open Invoice file. Then select the invoices that the credit memos will be applied against.

10. Click Accept and update the Cash Receipts Journal.

A credit memo is applied to an invoice. For more information, see Miscellaneous Cash or Credit Card Receipts and Write Off a Bad Debt.

 

 Example - How the System Applies a Credit Memo

If a credit memo is on file for the customer that falls within the aging periods used for applying the payment to open invoices, the amount of the credit memo causes the posting balance to increase. The additional amount available is then applied to open invoices along with the original amount received, as shown in the following example.

Amount Received = 300.00

Invoice Date	Invoice Number	Invoice Amount	Amount Applied
7/14/12	1500030	90.00	90.00
7/20/12	1500035CM	200.00	200.00-
8/03/12	1500037	400.00	400.00
8/17/12	1500039	10.00	10.00
			300.00

Note Because a credit memo (7/20/23) is encountered, it is applied in addition to the original posting amount of 300.00.