Credit Memos

Credit Memos…

Credit memos is the abbreviation of “Credit Memorandum” also called “Credit Note”.

Credit memos are used when Customer or buyer of your company don’t want pay full amount that is written in the invoice.

There are many reason in which customer doesn't want to pay full amount as written in the invoice:

1: Return goods by buyer

2: Taking allowance

3: There is dispute in pricing etc.

Note: If Seller received credit memo and record it. The ultimately affect in the financial statements is that the Account Receivables of seller will be reduced.

To record Credit memos in peach-tree complete account software, first of all you have to click on task Manu and then select “Credit Memos…”

Note: You should select “Credit Memo…” and instead of “Vendor Credit Memos…”

You can see this procedure from the below image

When you click credit memos… the following window will appear.

In this window you should fill following information sections

Customer ID: you should select your customer who sends you credit memo.

Date: select date that is written in credit memo

Credit No. Give credit number for your customer

Customer PO: enter purchase order number if any for you customer.

Apply to sales: This option is used when you not issued sales invoice number to you customer and sells goods to customer but out of sales goods he wants to returns.

Here you have to give following information:

Quantity: Enter quantity that you sell

Item: Select item for which credit memo received.

Unit Price: Select unit price in which you sells goods previously.

After entering all in formation click on save button.

This procedure can be seen below with image

Apply to Invoice: When your customer purchase from you on credit basis and you give him invoice then that invoice can be used to reduce the amount for goods returns.

If there is any balance of your customer that he will pay you near future because of credit purchase from you and he have invoice number and when you select that customer in credit memos the option of “apply to invoice number” will automatically appears that will be look like that

Here you should select Invoice number to apply credit memo transaction and should only enter the return goods remaining part automatically fill up.

Note: when have not any invoice number you can only use apply to sales option and if you have invoice number that issued to customer then you will be able to select apply to invoice number option and you can also use apply to sales if there is any sales return other than invoice numbered.