Understanding the Process to Apply Credit Memos to Invoices

When the customer has outstanding credit memos, you can apply them to outstanding invoices using the RE Receipts Entry program (P15103). Because you do not have a physical payment, you enter zero in the Receipt Amount field. You can use the Load, Select, or Remittance feature to display the credit memo and invoice, and then you use the appropriate type input code to apply the credit memo to the invoice. If the credit memo does not fully pay the invoice, you can leave the invoice open for the amount that remains, or create a write-off, chargeback, or deduction record for the difference.

When you fully apply a credit memo to an invoice, the system:

• Closes the RM credit memo document in the Customer Ledger table (F03B11) by updating the pay status to P.

• Closes the RN or RD invoice document in the Customer Ledger table (F03B11) by updating the pay status to P if the invoice is fully paid.

• Creates a record in the Receipts Header table (F03B13) for a zero amount.

• Creates RS receipt documents in the Receipts Detail table (F03B14) for both the credit memo and the invoice.

After you apply credit memos to invoices, you must post the batch to update the general ledger.