1. Using Receivables Credit to Cash
  2. Unapply Receipts During Credit Memo Request Approval

Unapply Receipts During Credit Memo Request Approval

If the credit memo approval process approves a dispute amount greater than the open balance on the invoice, you can set up the applied credit memo to automatically reverse existing receipt applications.

Use this procedure, for example, when an invoice was partially paid but the customer later disputes a portion of the original invoice amount greater than the current open balance.

The credit memo approval process performs these steps:

  1. Unapply one or more full or partial receipt amounts from the invoice to accommodate the approved credit memo amount.

  2. Create and apply the credit memo to close the invoice.

  3. Reapply the receipts and place any remaining receipt amount on-account for the customer.

This process doesn't reverse other activity against an invoice, including adjustments and credit memos. If reversing all available receipts and applying the approved credit memo still leaves a negative invoice balance, then the approval process ends in error.

Note: If the original dispute was created with the Reverse applications and credit open balance option enabled to initiate the Credit Memo Rebill process, then that process takes precedence and the unapplication of receipts process doesn't apply.

To set up credit memo approval to unapply receipts and apply the credit memo:

  1. Create a credit memo transaction source with these settings:

    • Type: Manual

    • Receipt Handling for Credits: On account

    Note: You can also assign these settings to the predefined transaction source Credit Memo.

  2. In the transaction source assigned to the invoice, select the credit memo transaction source you created, or the predefined transaction source Credit Memo, in the Credit Transaction Source field.

  3. In the transaction source assigned to the invoice, select the transaction type to use in the Standard Transaction Type field.

    Note: The transaction type you select must have the Natural Application Only option enabled. You can't use overapplication with credit memo approvals that require the unapplication of receipts.

You can use the receipt history to review a receipt's unapplication and reapplication on the invoice and the credit request details.