Managing Credit and Debit Memos

Sometimes there is a need to adjust already issued invoices, create a manual charge or provide a temporary credit for a customer. A customer balance can be adjusted using Credit and Debit Memos. Debit Memo increases a customer’s debt, Credit Memo decreases it.

Important:
1. The following privileges are required to issue Credit or Debit Memos:
- ARDOCS_CREATE
- CREATE_MULTILINED_MEMO

Credit Memo scenarios

1. Sales Return.

   A customer cancels their subscription and asks for a refund. A new Credit Memo can be issued for the account, with details provided why / what invoice / what subscription are adjusted.

2. Promotions.

   In case of promotions there may be a need to decrease a subscription’s price. A new Credit Memo can be issued for a delta with the details above.

3. Goodwill credit.

   When a one-time credit for a reseller is approved, a new Credit Memo can be issued.

4. Other.

   A payment from a customer was not actually received yet, and the customer asks to issue a temporary Credit Memo instead of a payment: a new Credit Memo can be issued. Such Credit Memos can be removed later by issuing Debit Memos.

5. Errors / Mistakes.

   Misconfiguration of CloudBlue Commerce may lead to the need to correct a Billing Order (since the Invoice is already issued): a new Credit or Debit Memo can be issued.

Debit Memo scenarios

1. Charge-back.

   A customer initiates a dispute. After investigation, the customer is wrong and should be charged: a new Debit Memo can be issued as a manual Billing Order.

2. To offset a temp credit for a received payment (Credit Memo).
3. To claim additional bill due to misconfiguration in CloudBlue Commerce.
4. To offset a promo Credit Memo.

Creating a new Credit Memo

1. Open Finance > Documents > Credit Memos. The list of issued credit memos appears on the screen.
2. Click Add New Credit Memo. The adding new credit memo dialog window is displayed. Fill out the form:
   • Click next to the Account field. From the window that opens, select a customer account for which the memo is created.
   • Skip the Document # field as the number will be assigned automatically.
   • Type a free-form description into the Description field.
   • If necessary, click next to the Sales Branch field. From the window that opens, select a sales branch.
   • If necessary, click next to the Sales Person field. From the window that opens, select a sales person.
   • Optionally, specify the document that you want to correct with this memo in the Adjusted Document field.
   • Click Next.
3. Add details to the memo:
   • Click Add Detail. The adding credit memo detail window is displayed.
   • Specify Description of the memo detail you are creating. For example, a memo detail may be a reference to a line in the billing order you are adjusting with this memo.
   • Using the Service Quantity, Unit of Measure and Price fields, enter the corrected information (for example, updated price or quantity in a line of the billing order you are adjusting with this memo).
   • Optionally, you can specify the discount you are giving to a customer (the Discount Amount field).
   • Select a Tax Category. Selecting it implies that sales taxes are applicable to the credit memo. If the credit memo is not taxable, leave the Tax Category field blank.
   • Click Add Detail when finish.
4. Add more details to the memo, if needed (the Add Detail button).
5. Finish creating the credit memo by clicking Add Memo.

Creating a new Debit Memo

1. Open Finance > Documents > Credit Memos and click Add New Debit Memo.
2. The procedure of a Debit Memo creation is similar to the one of a Credit Memo's.

Applying a Credit Memo

Every newly created Credit Memo has status Hold. Only Credit Memos that have status Open can be applied to outstanding invoices. Credit Memos application process is the same as that of payments.

Releasing a Credit Memo

1. Open Finance > Documents > Credit Memos. The list of Credit Memos available in the system appears on the screen.
2. Mark Credit Memos you want to release by selecting respective checkboxes.
3. Click Release.

Deleting Credit and Debit Memos

Please see Canceling and Deleting AR Documents.

General notes for resellers

1. In some cases issuing a Credit or a Debit Memo can be inappropriate from the accounting point of view; instead, you can make a correction to an order.
2. In some cases, resellers may have Credit Memos and Payments that have the difference in applied amount comparing to the difference of total and available balance: total - available balance ≠ applied amount. In fact, these documents look like they are applied to some other documents, but it is not clear to which ones exactly.

   Though it is not displayed in Billing panel UI, such documents are actually assigned to the reseller transactions that correspond to order items in a customer's order.

   This ambiguity disappears after the respective billing order has been issued by a provider for these reseller transactions. After the billing order is issued, respective Credit Memos and Payments will be applied to the issued Billing Order, and will have their total - available balance = applied amount.