Matching Credit/Debit Memos to Purchase Orders and Invoices
When you enter a credit/debit memo, you can match it to existing invoice(s) to have Payables automatically copy the accounting information and create invoice distributions for the credit/debit memo. You can match the credit memo to multiple invoices, and at different levels of detail. Your available choices depend on whether the originating invoice was matched to a purchase order or not.
For example, if you receive a credit for items you returned to a supplier, you can enter a credit memo and match it to the original invoice you entered to ensure that the credit memo distributes the credit to the same accounts originally charged. Payables calculates discounts on credit and debit memos if you match them to invoices you paid using a discount.
If the original invoice is not purchase order matched (basic invoice), you can:
- Match to an invoice. Payables prorates your credit amount based on the invoice distribution amounts of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the distributions of the original invoice.
- Match to specific invoice distributions. You can allocate the credit amount to specific invoice distributions of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the original invoice distribution that you select. For example, you may order three chairs for three different departments and return one. You can match a credit/debit invoice to the original distribution for that department to ensure that the credit matches the charge.
If the original invoice is purchase order matched, you can:
- Match to specific invoice distributions. You can allocate the credit amount to specific invoice distributions of the original invoice. Payables automatically creates invoice distributions for the credit/debit memo based on the original invoice distributions that you select.
Payables updates the quantity billed for each of the originally matched purchase order shipments and their corresponding distributions by the credit quantity you enter. Payables also updates the amount billed on the purchase order distributions.
- Match to purchase order shipments. Payables prorates, based on the quantity billed, your credit amount across all purchase order distributions associated with the purchase order shipment to which you match the credit/debit memo. Payables automatically creates invoice distributions for the credit/debit memo based on the purchase order distributions associated with the purchase order shipment you match to.
Payables updates the quantity billed for each purchase order shipment and its corresponding distributions by the amount of the credit/debit memo. Payables also updates the amount billed on the originally matched purchase order distributions.
- Record a Price Correction. Use a price correction when a supplier sends an invoice for a change in unit price for an invoice you have matched to a purchase order. You can record a price correction by checking Price Correction when you match a credit/debit memo to a purchase order shipment or purchase order matched invoice distribution. When you record a price correction for a credit/debit memo, you are recording a price decrease from the original invoice.
Payables updates the invoiced unit price of previously matched purchase order shipment or distributions without adjusting the quantity billed so you can track price variances; Payables also updates the amount billed on the originally matched purchase order distributions.
To match a credit /debit memo to an invoice, invoice distribution, or a purchase order shipment:
Enter a negative invoice amount and all basic invoice information but do not manually enter the distributions. See: Entering Basic Invoices.
Optionally choose the Invoice Overview button to review more information about an invoice.
3. Create invoice distributions by matching to one or more invoices. If you are matching to a non-purchase order matched (basic) invoice, select the invoice and enter a Credit Amount.
If you want to match in further detail, continue the match at the invoice distribution or purchase order shipment level:
- To match to invoice distributions, choose Distribute. For each invoice distribution you want to match to, select the distribution and enter a Credit Amount.
- To match to purchase order shipments, choose Match PO. For each shipment you want to match to, select the shipment and enter either a Quantity Invoiced or Match Amount. Payables automatically calculates the remaining field (Quantity Invoiced x Unit Price = Match Amount). You can optionally change the Unit Price, which defaults from the purchase order.
4. Choose Match to create invoice distributions for the credit/debit memo based on the matches you made.
To review the new invoice distributions, choose the Distributions button from the Invoices window.
Creating Tax Distributions Automatically
To create credit memo tax distributions automatically do only one of the following:
- Enter the Tax Amount in the Invoices window when you enter the credit/debit memo
- Match to invoice distributions, either individiually or through proration
If you do both, each method will create tax distributions and you will have duplicate tax distributions. If you are required to enter a Tax Amount but you want to create distributions by matching, you can enter a 0% tax in the Invoices window and then match as usual.
Approving Related Invoices
To approve related invoices when entering credit/debit memos:
- In the Invoices window choose the Actions button. Check Approve Related Invoices, and choose OK to have Payables automatically initiate Approval for any invoices associated with a credit/debit memo.
