Manually Applying Accounts Payable Credit Memos

When a vendor issues a credit memo to your company, you record it in e-automate. You can apply the credit to outstanding invoices during the creation process, or you can leave it open and unapplied and use it for invoices you have not yet received or incurred. For more information on applying a credit memo during credit memo creation, see the Creating a Purchase Order Credit Memo and Creating a Vendor Credit Memo topics.

There are two ways that you can apply credit memos. One is to allow e-automate to apply any open credit memos during the Pay Vendors activity. The other is to manually apply credit memos against selected invoices. When you use the first method, e-automate automatically searches your accounts payable invoices and applies open credit memos against open invoices for each vendor. Prior to cutting the checks, you can alter the credit amount used or choose not to use a credit memo at all. If you choose to use the credit memo, e-automate will calculate the remaining balance owed the vendor and cut a check for the amount owed.

Tip: If the credit memo total and the invoice total are the same, best practice recommendation is that you manually apply these credit memos against the invoices so e-automate does not cut a zero dollar check.

When you use the second method of manually applying credit memos against invoices, use these instructions to:

Apply a credit memo when the credit memo(s) total matches the invoice(s) total.

Apply a credit memo against an invoice with a greater total, leaving the invoice with a balance due.

Apply a portion of a credit memo against an invoice(s), leaving the invoice with nothing due and a balance on the credit memo.

Getting to the TransactionGetting to the Transaction

From the Accounting menu, select Accounts Payable > Record Vendor Payment to open the New Vendor Payment window.

Basic InformationBasic Information

Complete the following fields as appropriate:

Vendor: Name of the vendor to whom you are applying credit memos. The vendor phone number automatically populates.

Bank Account: Financial account from which the funds for the payment are to be drawn.

Note: Even though you will not be drawing funds during the Apply Credit Memo transaction, you are still required to have the field populated.

Number: e-automate automatically assigns a number to the payment. You may change it.

Date: Date on which the application is made.

Method: Select Cash.

Note: If the check method is chosen, e-automate displays a Check No. field to record the check number as well as a Check date field for the date the check was written.

Amount: The amount should be zero.

Do one of the following:

To apply a credit memo to an invoice with a matching total, do the following:

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the invoice to which you want to apply the credit memo.

In the Amount to apply field, enter the amount of the credit memo you want to apply to this invoice.

Note: If there is one credit memo and one invoice with matching totals, this is the amount of the invoice.

If necessary, enter a discount in the Terms discount amount field.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Note: These fields are populated from your accounts payable options settings. If they are not populated, contact your system administrator.

Click [OK] to save the invoice.

Repeat adding invoices until you have added all the invoices and credit memo(s) and the total amount of the credit is exhausted.

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the credit memo(s) you want to use for the selected invoices.

In the Amount field, enter the amount of the credit memo.

Note: If this amount is not automatically entered for you, enter this amount as a negative number.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Click [OK] to save the credit memo.

Repeat steps h through l to continue adding credit memos until the Summary box indicates an Unapplied amount of zero.

To apply a credit memo to an invoice while leaving a balance on the invoice, do the following:

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the invoice to which you want to apply the credit memo.

In the Amount field, enter the amount of the credit memo you want to apply toward this invoice.

Note: If you are using the entire amount of the credit memo, enter the credit memo total.

If necessary, enter a discount in the Terms discount amount field.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Note: These fields are populated from your accounts payable options settings. If they are not populated, contact your system administrator.

Click [OK] to save the invoice.

Note: In the Invoices region, the Applied column indicates the amount of the credit memo you are using and the Balance column indicates the amount remaining to pay on the invoice.

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the credit memo(s) you want to use for the selected invoice.

In the Amount field, enter the amount of the credit memo.

Note: If this amount is not automatically entered for you, enter this amount as a negative number.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Click [OK] to save the credit memo.

Repeat steps g through k, adding credit memos until the Summary box indicates an Unapplied amount of zero.

To apply a credit memo to invoices while leaving a balance on the credit memo, do the following:

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the invoice(s) to which you want to apply a portion of the credit memo.

In the Amount field, enter the amount of the credit memo you want to use toward the selected invoice.

If necessary, enter a discount in the Terms discount amount field.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Note: These fields are populated from your accounts payable options settings. If they are not populated, contact your system administrator.

Click [OK] to save the invoice.

Note: In the Invoices region, the Applied column indicates the amount of the credit memo you are using and the Balance column indicates the amount remaining to pay on the invoice.

Click [Add] to open the Add Vendor Payment Details window.

In the Apply to credit memo/invoice field, use the lookup to select the credit memo(s) you want to use for the selected invoice(s).

In the Amount field, enter the amount of the credit memo.

Note: If this amount is not automatically entered for you, enter the amount of the credit memo you want to use.

Verify the Terms discount account, Terms discount department, and the Accounts payable account fields are populated.

Click [OK] to save the credit memo.

Note: In the Invoices region, the Applied column indicates the amount of the credit memo you are using and the Balance column indicates the amount remaining to pay on the invoice or credit memo.

Repeat either adding invoices or credit memos until the Summary box indicates an Unapplied amount of zero.

Completing the TransactionCompleting the Transaction

Click [OK] to record application of the credit memos and invoices.

Note: This will flag the credit memo and invoices as used or paid (Due = $0) in the Accounts Payable Invoices list.