Entering a Credit Memo in A/R
This article explains how to enter a credit memo in Accounts Receivable. A credit memo will decrease the amount that the customer owes. It is similar to a payment, but it is normally used as an adjustment to the customer’s account. Examples of why a credit memo may be used include a refund of service charges, some type of refund on an invoice, etc. Keep in mind that credit memo transactions entered in Accounts Receivable do NOT export to QuickBooks. Therefore, it is important to print a list of these transactions for posting so that manual entries can be made in QuickBooks. The report can be found in Accounts Receivable by clicking on Reports and then A/R Transaction Report. The report can be filtered to include only credit memos.
From the StockTrac® main menu, go into the Accounts Receivable module. Click on the New Transaction button.
The following screen will display:
Click the Credit button. The Customer Lookup screen will appear:
Locate the customer by searching, by typing in the account number, or by scrolling down the list of customers. Select the customer that the credit memo will be added for.
Enter the information as follows:
Credit Amount – enter the amount of the credit memo.
Reference – specify a reference for this transaction. This will print on the customer’s statement. It is important to enter something here, as this will help you to know which accounts to use when accounting for this manually in QuickBooks.
Next the credit memo needs to be applied to the invoice(s). In this scenario, we only have one open invoice, so we can click the “Auto Apply” button to apply the credit to the invoice. If there are multiple invoices, the amount to be applied to each invoice can be specified, or the Auto Apply button can be used, which will apply the credit memo amount to the oldest invoices first.
Once the information is entered, the New Transaction Entries screen will display:
After all of the credit memos are entered, they can be printed and/or saved as a batch if desired. They need to be posted to show up on the customer’s account.
Note: If you choose not to print at this time, you can also print this information later by a date range by going to Accounts Receivable, Reports, A/R Transaction Report.
Once all credit memos have been entered, click the Post Entries button. A notification will display once posting is complete.
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