Understanding Credit Memos
When a customer is overcharged and you want the customer's statement to reflect the correction, you enter a credit memo. You follow the same steps that you do when you enter an invoice, except that you enter the gross amount as a credit.
The system uses the Invoice Entry MBF Processing Options program to retrieve the value for the document type that it assigns to the credit memo. Generally, a credit memo is assigned a document type of RM. The system uses a different next number to assign the document number for credit memos than it does for invoices. Additionally, the system assigns the G/L date as the due date for credit memos.
The system uses the sign (+ or -) of the total gross amount to define if the document is an invoice or a credit memo. Credit memos may have positive and negative lines. For a pay line with a positive gross amount, the system assigns the Payment Terms due date as the due date. For a pay line with a negative gross amount, the system uses the Credit Memo Due Date processing option in the Invoice Entry MBF Processing Options program (P03B0011) to determine the due date value. If you leave the Credit Memo Due Date processing option to blank, the system assigns the G/L date to the due date for any pay item line with a negative gross amount.
See "Setting Processing Options for Invoice Entry MBF Processing Options (P03B0011)"
The system calculates a discount for the credit memo if the payment term is set up appropriately. Because you enter the gross amount as a negative number (credit), the system calculates a negative discount in the Discount Available field. To remove the negative discount, override the Payment Terms field with a payment term that does not calculate a discount and clear the Discount Available field before you click OK.