Creating Vendor Credit Memos

A vendor credit memo is used to record adjustments or corrections to a posted vendor invoice or a vendor account. Vendor credit memos do not impact inventory quantities, but purchase order credit memos do.

If, on a previous vendor invoice, you have associated vendor costs to service contracts or equipment, you can use a vendor credit memo to remove costs you may have associated with equipment or contract. This same concept holds true for fixed assets. You can use the vendor credit memo to make adjustments to fixed asset cost or basis value. You cannot adjust the value of a fixed asset below zero when using this functionality.

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 InfoBasic Info

In the Type field, use the drop-down menu to select Vendor Credit Memo. E-automate opens the New-Vendor Credit Memo window.

Complete the following fields as appropriate:

Vendor: Vendor for whom this credit memo is being created.

Description: Brief description of the credit memo.

Purchaser: Person responsible for the credit memo.

Number: Automatically assigned credit memo number. You may change it.

Apply to: Accounts payable invoice number to which this credit memo is applied, if any.

Note: To apply this credit memo to another invoice, select the invoice to which you want to apply it before you populate the following fields:

Vendor memo: Vendor’s identification number for the credit memo.

Invoice date: Date the vendor posted the credit memo.

Due by: Date payment is due.

Note: The Due by field is not normally used with a credit memo.

Amount: Amount of the credit.

Charges TabCharges Tab

Ensure the Charges tab is selected and click [Add] to open the Add Charge window.

Type a brief description of the non-inventory charge(s) in the Description field.

Enter the dollar amount debited to the account from the credit memo in the Amount field.

Choose ONE of the following to apply the invoice.

Apply to GL Account

Use the lookup to select the Account to be credited with this charge.

Note: The total charges you allocate to general ledger accounts must equal the amount of the invoice.

Use the lookup to select the department you want to associate with this credit memo, or use the drop-down menu to create a new department.

Use the lookup to select the branch you want to associate with this credit memo, or use the drop-down menu to create a new branch.

Note: This field only appears if branching is enabled.

Apply to GL Distribution Code

Use the lookup to select the distribution code you want to associate with this credit memo, or use the drop-down menu to create a new distribution code.

Apply to fixed asset

Use the lookup to select the fixed asset with which you want to associate this credit memo.

Note: If you have not already created the fixed asset in e-automate you can create the fixed asset by clicking the drop-down menu and selecting, New to open the New Fixed Asset window. For more information on fixed assets, see the Creating Fixed Assets topic.

Apply to sub lease

Use the lookup to select the sub lease you want to associate with this credit memo.

Note: You can filter the results by clicking the drop-down menu and selecting Filter > Unbilled or Terminated with Balance.

In the Customer field, use the lookup to select the customer to which you want to associate costs.

In the Contract field, use the lookup to select the service contract to which you want to associate costs. E-automate displays the contract dates.

To specify the period over which these costs are allocated, check the Coverage Period checkbox and specify the From and To dates.

To distribute costs equally across all the equipment on the contract during the specified coverage period, check the Distribute to multiple equipment/items on contract checkbox. Leaving this checkbox unchecked allows you to associate the cost with specific equipment/items on the contract.

Select either the Equipment or Item radio button and complete the following fields as appropriate:
Equipment/Item Number: Use the lookup to identify the equipment/item to associate costs.
Customer Invoice: Use the lookup to select the invoice to associate costs.
Job Number: Enter the number of the job, if any, associated with this credit memo.
Exclude from terms discount: When checked, this equipment/item is excluded from the total when e-automate calculates a terms discount.

Click [OK] to complete the credit. If you checked Distribute to multiple equipment/items on contract e-automate displays the Contract Equipment/Item Distribution window. Do the following to distribute to multiple equipment:

In the Amount field, verify the amount you want to allocate or change as necessary.

E-automate assumes you want to distribute to all equipment on the contract. If you want to change to which equipment you associate vendor invoice charges, click [Select Equipment/Item] to open the Select equipment on contract window. Place a check mark beside the equipment to which you want to distribute costs. Click [OK] to save your identified equipment.

To distribute the amount evenly across all identified equipment, select Distribute amount evenly across all selected equipment/items on the contract.

To distribute based on base rates, select Distribute amount to selected equipment based on the contract equipment/item base rates.

Click [OK] to save your settings.

Note: E-automate creates a detail line for each equipment to which you are distributing charges. Each line has the calculated allocation amount to the correct equipment.

To add more charges, fixed assets, or charges linked to contracts, repeat the above steps 1 through 10.

Note: You still are required to distribute the full amount on the vendor invoice. If you did not distribute the full amount of the vendor invoice, repeat these steps until you have fully distributed the vendor invoice total.

Miscellaneous TabMiscellaneous Tab

Click the Miscellaneous tab to bring it forward.

Complete the following fields as appropriate:

Note: Typically you do not have to change information on the Miscellaneous tab; however, you can make special corrections by modifying the fields when necessary.

Accounts payable: Account to be credited for the purchase.

AP Branch: Branch used for this vendor credit memo.

Note: The Branch field only displays when you are using branching.

Terms: Vendor's payment and discount terms.

Discount date: Not applicable on a vendor credit memo.

Discount rate: Not applicable on a vendor credit memo.

On Hold Code: If you want to place a credit memo on hold, use the lookup to select an On-Hold Code approved for use with accounts payable invoices/credit memos. Memos that are on hold do not show up in the Pay Vendors activity window until they are released from hold.

To specify the period over which these costs are allocated, check the Coverage Period checkbox and specify the From and To dates.

In the Job number field, enter the number of the job, if any, associated with this memo.

In the PO number field, enter the purchase order number, if any, associated with this memo.

Remarks TabRemarks Tab

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

Completing the TransactionCompleting the Transaction

Click [OK] to save the credit memo. E-automate posts the vendor credit memo to the vendor account, and against the vendor invoice if specified in the Apply to field. For more information on creating vendor credit memos, see Additional Info - Applying the Credit.