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Creating Purchase Order Debit Memos

Purchase order debit memos are used to record adjustments or corrections to posted purchase order credit memos. Because purchase order debit memos are related to inventory, they must have a receipt. The information from the purchase order debit memo is used to update the vendor's accounts payable account.

In addition to using a purchase order debit memo to record corrections to posted purchase order invoices, you can use purchase order debit memos to record inventory corrections generated from either purchase orders or RTV (Return to Vendor) orders. Typically, you would use a purchase order debit memo to record the correction that generates a positive amount on the invoice. You can also use the purchase order debit memo to offset matching receipts. For example, suppose you receive an item and discover that it is defective. The vendor agrees to send you a replacement item, and you agree to return the defective item. This transaction could be an offsetting transaction. Once you return the defective item and receive the replacement, you would have both a positive and a negative receipt. You can use the purchase order debit memo to offset the receipts and clear them from the open receipts list.

Getting to the TransactionGetting to the Transaction

From the Accounting menu, select Accounts Payable > Accounts Payable Invoices to open the Accounts Payable Invoices window.

Click [New] to open the New window.

Basic InformationBasic Information

In the Type field, use the drop-down menu to select Purchase Order Debit Memo. The New Purchase Order Debit Memo window opens.

In the Receipt field, use the lookup to select the receipt for the purchase order debit memo.

Note: The receipt will be either a positive or a negative receipt generated from a purchase order or an RTV order.

Click [QuickAdd]. e-automate adds the receipt to the purchase order debit memo and populates the vendor information.

Complete the following fields as appropriate:

Description: Brief optional description of the debit memo.

Number: Automatically assigned debit memo number. You may change the number.

Vendor memo: Vendor’s identification number for this memo.

Invoice date: Date the vendor posted the debit memo.

Due by: Date memo is due.

Apply to: Purchase order credit memo associated with this debit memo.

Amount: Amount of the debit memo.

Receipts TabReceipts Tab

To modify the price you record for an inventory item, do the following:

From the list of items, select the item’s row and click [Edit] to open the Edit Purchase Order Voucher Item window.

Note: You can also open the Edit Purchase Order Voucher Item window by double-clicking on the item’s row.

Complete the following fields as appropriate:

Quantity: Quantity of items you received.

Important: Entering a quantity higher than received in this field can cause problems with your un-invoiced inventory receipts account. You should only enter quantities less than or equal to the quantity received, which will leave any remaining items on the receipt for use with another purchase order invoice.

Cost: The price you will pay for each item.

Discount: Percent discount on the item(s), if any.

Freight: Amount you pay for freight for the item(s).

Note: The freight value entered here is added to the inventory value of this item. The freight amount entered here is divided equally across the quantity identified in the Quantity field.

Exclude item from terms discount: When checked, this item is excluded from the total when e-automate calculates a terms discount.

Exclude freight from terms discount: When checked, the amount in the Freight field for this item is excluded from the total when e-automate calculates a terms discount.

Update the cost for this vendor: When checked, e-automate updates the most recent cost for this vendor on the inventory item’s profile. If this vendor is not listed on the item profile, e-automate adds the vendor and stores the most recent cost. If not checked, e-automate does not update or add the vendor.

Note: The next time you generate a purchase order to this vendor and item, it will use the last updated cost.

Click [OK] to close the window and return to the New Purchase Order Invoice window.

Repeat steps a through c until all item prices are correct.

To add an expense item such as freight to the PO debit memo, do the following:

Click [Add]. e-automate opens the Add Purchase Order Invoice Item window.

Complete the following fields as appropriate:

Item number: Item number of the expense item you are adding to the invoice.

Note: You can only add expense items during purchase order invoice creation. If you do not have an expense item, you will need to create one. For more information, see the Creating Items - Expense topic.

Quantity: Quantity of the item being added to the invoice. The quantity is typically one.

Cost: Dollar amount you pay for an item. The freight amount is typically entered here.

Description: e-automate enters a brief description of the item, based on the item’s Description field.

Expense account: e-automate enters the expense account associated with the expense code assigned to the item. To change the account, use the lookup to select a different account.

Department:Department to which the expense will be posted.

Exclude from terms discount: When checked, this item is excluded from the total when e-automate calculates a terms discount.

Click [OK] to close the window and return to the New Purchase Order Debit Memo window.

Miscellaneous TabMiscellaneous Tab

Click the Miscellaneous tab and verify the information.
See below for field descriptions.

Accounts Payable: The default accounts payable account to which this invoice will be credited. Typically you should not change this account.

Important: Modifying this account causes your Aged Accounts Payable subsidiary report to not match your Balance Sheet.

Terms: Payment terms you receive from the vendor for this invoice.

Discount date: If the invoice is paid by the date in this field, you are eligible for the discount identified in the Discount rate field.

Discount rate: Discount offered to you by the vendor if you pay by the discount date.

On hold code: To place an invoice on hold, use the lookup to select an On Hold Code approved for use with accounts payable invoices. Invoices that are on hold do not show up in the Pay Vendors activity window until they are specifically requested or released from hold.

Remarks TabRemarks Tab

To include remarks, click the Remarks tab and enter them.

Completing the TransactionCompleting the Transaction

Click [OK] to apply the purchase order debit memo against the vendor account and the selected purchase order credit memo.