Understanding Credit Memos

When a customer is overcharged and you want the customer's account to reflect the correction, you create a credit memo. Generally, a credit memo is assigned a document type RM. You manually create credit memos using the same steps that you use to manually create an invoice.

The system creates a credit memo automatically when a negative transaction is processed from the Account Ledger table (F0911).

You can add the credit memo to an existing batch or to a new batch. You can also add existing workfile transactions or enter ad hoc workfile transactions to a credit memo. The workfile transactions must have negative amounts to correct the customer's account balance.