Credit Memo Used on Different A/R Account

Situation:

A customer has two different Account Receivable accounts. One of the accounts has a credit memo that the customer would like to use against open invoices on the other account. These instructions can also be used if a credit memo was mistakenly put on the wrong A/R account.

Example situation: Customer #3496 has Credit memo 789 for $500.00 on the account and you want to use $200.00 to pay invoices on account #3400

Solution:

Step 1: Enter a Debit Memo using the customer number that has the credit memo which will then be used on a different account. The amount can be the total or just a portion of the credit memo amount (as per the example)

Go to:

Accounts Receivable (Module 2)
- Sales Entry & Editing (Task 1)
  - Enter New Sales Record (Sub-task 1)
    - First Screen
      - 01. Invoice #: Use a document # out of your normal invoice # range. (i.e.123)
      - 02. Inv date: Use a current date
      - 03. Due date: Press ENTER key
      - 04. Division #: type in appropriate division #
      - 05. Sale type: 5-Debit memo (Check for duplicate credit memo or debit memo? Y)
      - 06. Customer #: type in the customer number that has the Credit memo on it now (for this example 3496)
      - 07. Salesman #: type in appropriate salesman #
      - 08. Sale amt: Press ENTER key
      - 09. Other amt: type in amount to transfer to other customer (for this example $200.00)
      - 10. State tax: Press ENTER key
      - 11. Non-tax amt: type in amount being transferred (for this example $200.00)
      - 12. through 25 Press ENTER key (if Zone Taxes are used, enter an appropriate Non-taxable zone)
      - 26. Tax State: Type in abbreviation for state
      - 27. PO or Job #: Type in original credit memo #, or some short note. i.e. DM#123/USEDCUST#3400, (field is 20 characters).
      - 28. Terms: Press ENTER key
    - SECOND SCREEN:
      - Type in a G/L account number and press the ENTER key under the “Income amt” and “Cost amt” columns.
      - Record the G/L account used, because the same G/L account number must be used in the next step - resulting in a "wash".
      - Make note of the Debit Memo number just created (per the example: 123)

Step 2: Enter a Credit Memo for the customer that has invoices you want paid using the same amount as entered in Step 1. Once again, enter the amount in field 9: "Other Amt"

Accounts Receivable (Module 2)
- Sales Entry & Editing (Task 1)
  - Enter New Sales Record (Sub-task 1)
    - First Screen
      - 01. Invoice #: Use document # out of your normal invoice # range. (i.e. 456)
      - 02. Inv date: Use a current date
      - 03. Due date: Press ENTER key
      - 04. Division #: type in appropriate division #
      - 05. Sale type: 3-Credit memo
      - 06. Customer #: type in the customer # wants to use the Credit memo (for this example 3400)
      - 07. Salesman #: type in appropriate salesman #
      - 08. Sale amt: Press ENTER key
      - 09. Other amt: type in amount to transfer to other customer (for this example $200.00)
      - 10. State tax: Press ENTER key
      - 11. Non-tax amt: type in amount being put on the account (for this example $200.00)
      - 12. Freight amt: Press ENTER key
      - 13. Disc allow: Press ENTER key
      - 14. Apply to: If the credit memo is going to be applied to only one invoice, type in the invoice number. If the credit memo is going to be applied to multiple invoice numbers, press ENTER key.
      - 15. through 25, Press ENTER key (if Zone Taxes are used, enter an appropriate Non-taxable zone)
      - 26. Tax State: Type in abbreviation for the state
      - 27. PO or Job #: Type in original credit memo number, or some short note. i.e. CM#456/USEDCUST#3496, (20 characters).
      - 28. Terms: Press ENTER key
    - SECOND SCREEN:
      - Type in the same G/L account number used for the debit memo in step 1. Press the ENTER key under the “Income amt” & “Cost amt” columns.
      - Make note of the Credit Memo number created (per the example: 456)

Step 3: Post both the Debit Memo and the Credit Memo created by using Sub-task 5. Post Sales Records to A/R Files (as always, we recommend running the Edit List from sub-task 4 before posting). The edit and posting should have zero Grand Totals.

Step 4: If the newly created credit memo is going to be applied to multiple invoices, go to: A/R, Cash/Receipts Entry & Editing, Enter (ADD) New Cash, (2/2/1) and select the newly created Credit Memo via field #11: Credit #. See document titled, “Applying a Credit Memo or Unapplied Payment” on our website for complete instructions.

Step 5: From the Customer’s account (Task 27) make note the original credit memo number (for the example, customer 3496, credit memo 789 for $500.00)

Step 6: To eliminate or reduce the original credit memo amount that was used to pay invoices on another account, go to:

Accounts Receivable (Module 2)
- Change Apply-to # (Task 3)
  - Enter the original customer number (i.e.3496)
  - enter the original credit memo number (i.e. 789)
  - Type in the new Debit Memo # in the “New apply-to #” field(i.e.123).