Create Debit Memos

Create Debit Memos

A Debit Memo is basically a credit that you are giving to yourself from a specific vendor due to a previous incident, such as broken material received or simply a vendor over billed you. In short, It is a financial transaction that takes money away from a bill.

Debit Memos

• To reach Debit memo, go to Accounting > Account Payable

Click Enter Bills and stay on Bill

You can either click on Debit Memo or stay on Bill radio button option on top, and select “From A PO” tab, and check “Create Debit Memo” checkmarks while entering a bill for a PO.

• Upon Enter Bill From a PO stay on Bill radio button option on top, you may need to adjust that PO based on the following:

1. First checkmark is to Create debit memo based on an Adjustment amount of any kind (Depending on the situation, for example, a vendor has overbilled you, you will add the adjustment amount in the relative field, and then check the first debit memo mark).

2. Second checkmark is to Create debit memo based on Missing Items (they should be missing in their relative expense account).

3. Third checkmark is to Create debit memo based on Broken Materials (they should be charged to their relative expense account)

Refer to Entering Bills With a PO in Accounts Payable Core Process.

Upon searching for that PO you will be paying.

The vendor invoice balance due doesn’t match the SE balance due because pricing is off:

Option A:

• Change prices in the Enter Bills screen by double clicking the net box for a line item and typing in the correct NET per item price (This can only be accessed with proper security privileges)

  

• Click the “Create Bill” button. The price changes will flow back to the PO and automatically change item level pricing and change all ledgers accordingly

  

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Option B:**

• Write off a nominal difference in “Adjustments field” to a ledger account (Expense Account) of your choosing

In the case that there are missing or broken items that the vendor is charging you for, you can pay the full bill and simply write off the expense or you can automatically create a Debit Memo to apply against the bill for those lost or missing items.

Option A (Write Off):

• Find the Accounts Payable Box in the “Enter Bills” screen and add a missing items adjustment

• Select an expense account

• Create Bill

  

Option B (Automated Debit Memo):

• To create a debit memo automatically, add missing items adjustment, and check create debit memo box

• “Create Bill” and the debit memo is created in the background.

  

• This will add the amount of the missing items to the total amount due but automatically create a credit for the same amount that will be taken against the bill

  

********In the case that you do take a debit memo against the missing or broken items, it is expected that your warehouse DID NOT receive those missing items. Your purchasing team should then contact the vendor and decide whether or not they will be shipping the remaining (missing or broken items) on the same PO or if they will simply adjust the PO to reflect the true number of items shipped.

Click on Debit Memo

• We will then look for the vendor whom we want to issue a debit memo to, we will type the first few letters of the vendor name then click on the search tool. Then select the vendor from the search results.

• After which we click search on the upper right

• We then fill in those fields if there was any reference number, a specific warehouse, or any additional information related to this debit to add.

• Now we select the PO or Order that we want to pay, we click on the checkmark next to that order to mark it.

• Now we assign the adjustments. Let us assume that there have been missing items in that order which we have not received, or the vendor simply did not send them. We will fill in the missing items amount under the missing items adjustments, however, I will add it as a negative. As it is deducted from the vendor’s total.

It should look like this:

Notice that the amount I have added to the missing adjustments is reflecting on the “Missing Items Adjustments” on the right pane as it will be deducted, and reflecting on the total.

• Now select the expense account associated with this memo:

• Click Create Debit memo on the lower right corner of the screen:

• You should receive the below notification:

• Now it’s time to apply this credit or any other previously created credits to that bill. I will click on “Apply credit”. A new window will appear.

• This will allow me to select which credit to apply to that bill, I will choose one or multiple credits, then click okay, I will see the credit applied reflected:

• After which the “create credit memo” will become “Create Bill”. I click create bill on the lower right corner of the screen, and I should get a notification that my bill has been created: