Creating Credit Memo

A credit memo is created for issuing credit to the customer. Depending on whether an invoice exists in the system, you can create an invoice credit memo or credit memo. It's important to note that if the credit memo contains inventory items, they are also credited back into the system.

The credit memo process involves various status indicators that indicate whether it is available to be used on an invoice or refunded to the customer.

Creating Credit Memo

When entering a credit memo, you'll begin by entering essential header-level information, such as the store, return type, customer details, account, and reference number. Once the basics are set, you can add item(s) to the memo and proceed with the return process.

To create a credit memo, go to Menu > Sales > Credit & Deposit > Credit Memo

Credit Memo Header Fields

Section	Field	Description
Main	Select Store	This is the Store from which the Credit is being processed. Any Inventory Items will be Returned to this Store.
Main	Return Type	This lets you choose among 2 types of RMA processes for the returned goods. “Direct” will ask you for a location when you add an item, so you will have to put away the item immediately. “Warehouse” will give you the option of generating an ASN for putting away the goods into the warehouse at a later time. Choose the option which best suits your warehousing workflow.
Main	Select Customer	Type a Name, Phone number, or email here to select a Customer for the Credit Memo. Click on icon for more details on the selected Customer.
Main	Select Account	This fields allows you to select the account from which the credit amount will be credited.
Main	Ref No	This field allows you to assign a unique reference number or identifier to the credit memo for easy tracking and reference purposes.
Main	Date	The date on which the credit memo was created or initiated is captured in this field.
Main	Sales Rep	This is the Sales Rep associated with this credit memo. Once a customer has been selected this field will automatically be filled and will require authorization to edit.
Main	Project/Class	Select a project or class to associate this credit memo.
Main	Link To Invoice	This field allows you to link an invoice with the credit memo.
Main	Third Party Notes	This field displays the third-party notes for the orders created using an integration like Shopify, etc.
Footer	Ship To Address	The "Ship Address" field shows the shipping address for the credit memo. When a customer is selected, this field is automatically filled with the corresponding shipping address. You can choose other addresses from the drop-down menu or edit the address by clicking on it
Footer	Memo	The "Memo" field provides space for writing notes or any additional information related to the credit memo.
Footer	Exchange Rate	If the credit memo is for a foreign customer, the "Exchange Rate" field allows you to specify the conversion rate for currency exchange.

Adding Item(s) to the Credit Memo

After inputting the header-level information in the credit memo, you'll proceed to enter line-level details, which encompass adding the item(s) returned by the customer. In case no product returns are involved, you can add non-inventory or service item(s). In the line-level section, you can add individual items, and specify their quantities, unit cost, and any applicable taxes.

Credit Memo Details Header Fields

Field	Description
Item Type	Specify the type of item you want to add to the credit memo- Inventory, Non-Inventory, Service or Labor.
Item Number	This field allows you to search for and add the item to the credit memo.
Qty	Enter the quantity of the item that you are adding to the credit memo.
Rate	Enter the price of the item you are adding to the credit memo.
Return Notes	Add any notes or reason for return for the item here. Typically these are notes about the item (damaged, missing parts, etc.).
Tax	Select the tax code of the item you are adding.
Project Class	Select a project or class to associate this credit memo line with.
R Code	Choose the item return code of the item that you are adding. The available options are: CS, (Customer Satisfaction), DG (Damaged), ICU (Incomplete Unit), and RC (Recall). Please note that if you select DG as the reason code, the inventory will be received as "Not Available" in the Damaged area.

Credit Memo Details Line Fields

Field	Description
Amount	Displays the calculated amount, which is the result of (Unit Price * Qty+Tax Amount).
Description	This is an editable input field that displays the description of the item.
EUP	Indicates the Effective Unit Price for the item.
Item#	The unique identifier for the item.
Item Type	Specifies the type of item, such as inventory, non-inventory, etc.
Project/Class	Allows you to select a project or class to associate with the item line.
Income Return Account	This column allows users to specify the return income account for each line item individually. The default value for this dropdown is set to "Auto Select," which automatically selects the appropriate return income account for the item. However, users can edit this field to select a different return income account as needed.
Qty	This is an editable input field that specifies the quantity of the item.
RCode	This displays the item return code of the item that you are adding.
Re-stocking Fee	This field allows you to add an absolute or percentage re-stocking fee for the item.
Return Note	Add any return notes for the item here. Typically these are notes about the item (damaged, missing parts, etc.).
Tax	This is the tax code of the item you are adding.
Tax Amount	Displays the calculated tax amount for the item.
Unit Cost	This is an editable input field that displays the price of the item.
Uom	Specifies the unit of measure for the item (liter, unit, kilogram, etc.).

After completing the header fields and adding items, click on the "Save" button to create a credit memo.