1. Accounts Receivable Credit Memo

1.1. Prerequisites for A/R Credit Memos

Users MUST have full rights to the "AR Offsets, Write-offs & CM" in Accounting Security .   Users with “Accounting Security Supervisor” rights will automatically have access.
1.2. Introduction for A/R Credit Memos
A Credit Memo can be created from two modules:  the Accounts Receivable Credit Memo module or the RMA (Return Material Authorization) module.

The Accounts Receivable Credit Memo section provides the ability to issue Credit memos against specific Invoice (Invoice CM) or create a General CM.  An Invoice Credit Memo will debit SCRAP and credit COGS.  If a partial credit is required without returned goods, create a General Credit Memo.  For returned goods, create an RMA .  
 
The RMA (Return Material Authorization) module notifies receiving to expect a return from a Customer.  The authorization also allows for reworking/replacing the order so that the user doesn’t have to go to another screen to create a Sales Order.  Once the RMA is received, a Credit Memo automatically forwards to the Accounting Accounts Receivable Credit Memo module where it can be viewed and printed.  Rather than issuing an invoice Credit memo, the user may wish to use the RMA module instead.  Please refer to the RMA (Return Material Authorization) Management manual.  Note:  DO NOT use this module to create a Credit Memo if it involves return of inventory from a Customer, use the RMA process.  If the RMA is created from an Invoice the CM type will be "Invoice", if the RMA is a stand-alone the CM type will be "General". 

See the attached word document <<How_CM_Affect_GL_Accts_090106.docx>> for further detail on how the different types of Credit Memo's affect the GL Accounts. 

    

1.3. Fields & Definitions for A/R Credit Memo

 

Credit Memo Field Definitions: 

Credit Memo Type  The type of Credit Memo (Invoice or General).   A Credit Memo can be created from two modules:  the Accounts Receivable Credit Memo module or the RMA (Return Material Authorization) module.  If the RMA is created from an Invoice the CM type will be "Invoice", if the RMA is a stand-alone the CM type will be "General".
Sales Tax Only  This box is checked if the Credit Memo is for the Sales Tax only.  This checkbox will only be displayed at the time when the 1st CM for an invoice is created or if the prior credit memo did not use any  amount of the tax/freight yet.  This checkbox will NOT be displayed on CMs that are generated via a  RMA Receiver. 
Freight   This box is checked if the Credit Memo is for the Freight Charge only.  This checkbox will only be displayed at the time when the 1st CM for an invoice is created or if the prior credit memo did not use any amount of the tax/freight yet.  This checkbox will NOT be displayed on CMs that are generated via a  RMA Receiver. 
Freight Tax   This box is checked if the Credit Memo is for the tax on the freight charge only.  This checkbox will only be displayed at the time when the 1st CM for an invoice is created or if the prior credit memo did not use any amount of the tax/freight yet.   This checkbox will NOT be displayed on CMs that are generated via a  RMA Receiver. 
Approved By Intials, date and time of user Approved By
Credit Memo No  The unique number assigned to the Credit Memo.  Note:  If the numbering is set to "Auto" once the "Next" number is selected, the counter moves to the succeeding number,  if the abandon changes button is selected that number appears to be considered as used and will be skipped even though the record was never changed.
Credit Memo Date The date of the Credit Memo.
Invoice/Ref No     The invoice number to which the Credit Memo will be applied.
Invoice Date  The date of the Invoice.
Status  Status of Credit Memo (Open, Approved, Edit)
Last Modified By Date and Initials of User Last Modified By 
Sales Order The unique sales order number to which the Invoice applies.
Order Date  This is the date of the Sales Order.
Customer The name of the customer receiving the Credit Memo.
Customer PO The customer’s Purchase Order number authorizing the Sales Order.
Add any special notes that pertain to this specific Credit Memo
GL Account Number This field will only appear for a General Credit Memo.
GL Account Description This field will only appear for a General Credit Memo. 
Reason for Change Enter in the reason for the Credit Memo.     
Current Invoice Balance The amount displayed within this field is pulled from the AR record and reflects any Cash Payments, AR Offsets & "Approved" Credit Memos, but will NOT include "Open" Credit Memos.
After the invoice information has been found, the system will check for any prior credit memos (open or approved) for the same invoice. If any are found, this button will display in Red. When this button is selected, a grid screen will appear listing the prior credit memos, the screen will have drill down capabilities so when an item is double clicked another instance of the credit memo screen will appear with the prior credit memo information shown. 
 
Invoice Balance After this CM and Open Cms Applied
The amount displayed within this field is pulled from the AR record and reflects any Cash Payments, AR Offsets, "Approved" and "Open" Credit Memos,  including the current one being added/edited. 
NOTE:  If the amount in this field is within 1% of the Invoice, a button will appear    (See below)  
When this button is pressed another CM line item will be created with a description of "Adj invoice total to 0" and an extended amount that will adjust the balance to "0".
Y/N  The box is for marking the line item on the invoice for crediting.
Part Number  The user’s internal number for the part.
Rev    The revision number pertaining to the Part Number, if any.
Type The user’s internal type to which the part number belongs
Class  The classification to which the part number belongs.
Description   The user’s description of the part number.
Quantity  The quantity to be credited.
Price Each The price for 1 quantity of the Part Number. 
Extended     Quantity multiplied by Price Each.
Scrap Qty  The amount of the returned stock that will be charged to scrap.  The CM fields are populated with the data from the invoice selected.  For the line items checked at the left, the qty entered in the Quantity field will default into the Scrap Qty field (this field is read only).  This is the qty that will hit the scrap account.  The system will automatically debit SCRAP and credit COGS.  (If user is creating a Credit Memo for a price adjustment to a Customer Invoice and is NOT returning the goods and does NOT want the GL Transaction to hit the scrap account then we suggest that the user creates a General Credit Memo).   

 

Credit Memo Summary/Credit Memo Line:

 

Sub Total  This sub-total is the amount of returned product or price change being credited.
Discount Amt  This sub-total is the amount of the discount being calculated into the Credit Memo Total. 
Sales Tax    The sub-total is for the amount of sales tax being credited.
Freight Charge   The amount of the Freight Charge being credited.
Freight Tax  The amount of the Freight Charge tax being credited. 
Credit Memo Total   The total Credit Memo allowed to the Customer.

 

Credit Memo Summary/Invoice Detail Line:

 

Sub Total   This sub-total is the amount of product on the original invoice. 
Discount Amt   This sub-total is the amount of the discount on the original invoice.
Sales Tax   The sub-total is for the amount of US sales tax, or Primary and/or Secondary sales tax on the original invoice.
Freight Charge    The amount of the Freight Charge on the original invoice.
Freight Tax     The amount of the US or Primary and/or Secondary Freight Charge tax on the original invoice.
Credit Memo Total The total of the original invoice.

The GST (Primary) tax and PST (Secondary) tax is divided into the Sales tax and Freight tax on the Credit Memo Summary/Invoice Detail Line:  

For Example: 

Primary Tax (GST):  144*10% (sales tax) + 0 (no freight tax is calculated) =$14.40

Secondary Tax (PST):  144*8% (sales tax) + 12*8% (Freight tax)  =  $12.48


Divided into sales tax and freight tax:
 
Sales Tax: 144*10% (sales tax)  +  144*8% (sales tax)  =  $25.92
 
Freight Tax  0 (from primary tax)  +  12*8% (from secondary tax)  =  $0.96 

 

 

 

 

 

 
1.4. How To ...... for A/R Credit Memos
1.4.1. Find an A/R Credit Memo

Enter the SQLMANEX.EXE (within the ManEx root directory)
This action will then prompt the user for a password

The following screen will be displayed, select Accounting/Accounts Receivable/A/R Credit Memo 

  

The following screen will be displayed:

Depress the Find record action icon to find an existing Credit Memo or an RMA Credit Memo.  The following screen appears: 

Select the desired Filter: by selecting the appropriate radio button - Open (Not Approved), Approved, Released to GL, Cancelled, or All. 


Select the desired Find: by selecting the appropriate radio button -  Customer, Credit Memo Number, Invoice/Reference Number, RMA Number or All.

User may also filter by CM Date if Desired.

Once you have made the selections, enter the information into the red box, depress the Enter key and the information will populate the screen. 



 

If you select ANY of the Filters and Find By All - a list of all the Credit Memos per that filter will be displayed by Customer Name, Credit Memo number, Credit Memo Date, Credit Memo amount, Invoice/Reference number and Credit Memo  status will populate the screen. 

Select the Credit Memo by highlighting  the desired record and double click on it or enter the Credit Memo number into the red box. 

 

Once an existing Credit Memo has been selected, the detail screen for that CM will be displayed: 

 

 

  
1.4.2. Add an A/R Credit Memo
1.4.2.1. Invoice Credit Memo

Enter the SQLMANEX.EXE (within the ManEx root directory)
This action will then prompt the user for a password

The following screen will be displayed, select Accounting/Accounts Receivable/A/R Credit Memo 

  

 

The following screen will be displayed: 

 

 

When you create an Invoice Credit memo it will default in the Scrap Qty (scrap qty is Read Only) and an entry debiting SCRAP will be created.  To proceed with the invoice Credit Memo in this module, press the Add button which will produce a prompt for an authorized password, the following selection screen will appear. The user depresses the desired option.

Depress the Invoice CM Type. 

  

A list of Customer Invoice Numbers that are pending will appear: 

Select an Invoice by typing the Invoice number in the Red box or highlighting the Invoice number and double clicking on it.

  

 

The CM fields are populated with the data from the invoice selected.  The qty will default into the Scrap Qty field (this field is read only).  This is the qty that will hit the scrap account. 
The following information will default into the fields to the right:  
"Current Invoice Balance" is pulled from the AR record and reflects any Cash Payments, AR Offsets & "Approved" Credit Memos, but will NOT include "Open" Credit Memos.    
"All CMs on invoice"  - this button will display in Red, if there are any prior credit memos (open or approved) for the same invoice. 
"Invoice Balance after this CM & Open CMs Applied"  is pulled from the AR record and reflects any Cash Payments, AR Offsets, "Approved" and "Open" Credit Memos,  including the current one being added/edited. NOTE:  If the amount in this field is within 1% of the Invoice, a button will appear "Adjust Invoice Balance to 0" 
 
  
(If user is creating a Credit Memo for a price adjustment to a Customer Invoice and is not returning the goods and does not want the amount to hit the scrap account then we suggest that user creates a General Credit Memo). 

 

 

User can choose to issue a Credit Memo for the Sales Tax only or Freight only, by selecting the boxes at the top of the screen.  The Sales Tax, Freight and Freight Tax to be credited will appear in the Credit Memo Summary section.  NOTE:  Users will only be allowed to use these three “only” check boxes at the time when the 1st CM for an invoice is created or if the prior credit memo did not use any  amount of the tax/freight yet.

 

The user may select one or more lines from the invoice against which the credit is to be taken. The selection is accomplished by clicking on the left box on the desired line. As the boxes are checked, the amount of the Credit Memo at the bottom of the screen in the Credit Memo Summary is changed to reflect the lines selected.  After selecting the lines to be credited, the user may edit both the quantity and the price of each line. Changing either of these changes the totals for the Credit Memo at the bottom of the screen in the Credit Memo Summary.

In addition to selecting and\or modifying the line items, the sales tax, freight charges and freight taxes will also be modified pro-rata by the system. The values will be calculated pro-rata based on the credit being issued for each line.

For the line items checked at the left, the qty entered in the Quantity field will default into the Scrap Qty column.  The system will automatically debit SCRAP and credit COGS. (If you do not want the GL Transaction to hit the scrap account the user should create a General Credit Memo). 
 
 
 
Note:  An invoice Credit Memo created in this module or one created in the RMA process against an OPEN invoice will offset the open A/R Trade invoice in the A/R Aging, and the amount displaying in A/R Trade Aging will be the NET.  There will be a credit appearing in the A/R Aging only if the Customer invoice had already been paid down. 
 
User MUST enter a reason for the Credit memo before saving.  If the reason field is blank user will receive the folowing message:
 

Once a reason has been entered user may Approve the Credit Memo.  When user depresses the Approval button the following message will appear:  
 
 
 
Once the Credit Memo has been approved the Status will change from Open to Approved and the CM will be forwarded to the AR Aging Module.  If desired it may be Offset using the AR Offset module.
 
 

 

1.4.2.2. General Credit Memo

Enter the SQLMANEX.EXE (within the ManEx root directory)
This action will then prompt the user for a password

The following screen will be displayed, select Accounting/Accounts Receivable/A/R Credit Memo 

  

The following screen will be displayed:

 

Depress the Add record action icon and the following Selection screen will appear.  Depress the General CM button: 

  

The following screen will appear:

The Invoice Number field changes to a reference number, and the user enters a Reference Number for the Credit Memo.     


The user will receive the following message if they happen to enter in a reference number that matches any invoice numbers that exist on the aging for the same customer.

If it does happen to match an invoice on the aging, the user will receive this message and will be required to change the reference number.    

The user will receive the following message if they happen to enter "ppay" in the Invoice/Reference field. 

The system will not allow a Invoice/Reference number to begin with "ppay", because the system considers a transactions that begins with "ppay" as a Prepayment entry.
 

Check the Taxable box if applicable.  Check the Freight Taxable box if applicable.  Credit memo date will default in but user may change date if needed.

Enter Customer from the pull down provided by pressing the down-arrow next to the customer field: 

  

A General Ledger Account number must be supplied for a general Credit Memo.  Note:  When creating a General Credit Memo users should not select the same GL account number that is entered in the Actsetup for the Account Receivables.  If you do, then the resulting transaction will debit and credit both the sane GL account number.  The following GL screen will appear:

 

Select the method of finding the General Ledger Account number, by Account Type or Account Numbers. 

If you select Find By Account Type, depress the down arrow on the right hand side of the screen.

Select the desired Account Type, then select the Account Number.

Depress the OK button. 

If you select by account number, depress the down arrow next to the Account Numbers box and the accounts will appear.  Highlight the Account Number you wish to use.  
After entering a General Ledger account number and selecting a Customer, the user may check the box at the far left of the detail information grid.

Then the user enters the description, quantity and price each to be credited.  If the Taxable box is checked the Sales Tax will default in.  If the Freight Taxable box is checked user must enter in the Freight Charge to be Credited as displayed below.  The Credit Memo Total will calculate automatically.

User MUST enter a reason for the Credit Memo before saving.  If Credit Memo Reason is blank user will receive the following message.



To enter the reason for the General Credit memo.  Depress the Credit Memo Reason button.  Depress the Edit button.  Enter the Credit Memo Reason.  Depress the Save button.  Depress the Exit button.

Then the Credit Memo may be saved and recorded by depressing the Save record action icon, or deleted by depressing the Abandon changes action icon. 
 
 
 

Depress the Approval button, and receive the following message.
Once Credit Memo has been approved the CM Status will change from Pending to Approved, and the CM will forward to the A/R Aging module.  If desired, it may be Offset via the A/R Offset module. 
 
 
1.4.3. Edit an A/R Credit Memo

Find an Exising Credit Memo with an "OPEN" status.

Depress the Edit record action icon.  When in the edit mode the Credit Memo Date is editable, the quantity is editable, and the user may check or uncheck the line items to be credited.  
NOTE:  Any changes that affect the Credit Memo Total will also affect the totals on the right of the screen and they will be adjusted automatically with changes.

Once the Status changes from OPEN to APPROVED the Credit Memo is no longer editable. And  "NOT EDITABLE" will be displayed at the top of the screen (as shown below).
 

 

 

1.5. Reports for A/R Credit Memos

The Return Material Authorization module notifies receiving to expect a return from a Customer.  The authorization also allows for reworking/replacing the order so that the user doesn’t have to go to another screen to create a Sales Order.  Once the RMA is received, a Credit Memo automatically forwards to the Accounting Accounts Receivable Credit Memo module where it can be viewed and printed.

To obtain the Credit Memo Reports within the Web, select the WEB Print button from the ManEx action buttons at the top of the screen.  For further detail on How the Reports work within the Web refer to Article #5477.

Note:  In order to access the Reports within the Web the Company Root URL must be setup within the System Appearance module and user must be linked to web within the System Security Module.


Select the Report Type:  CREDIT MEMO - A List of Reports will be displayed that are available on the Web for Credit Memo


 

To view the Credit Memo created in the Return Material Authorization module, use the Find procedure. 
 
To obtain the Credit Memo reports, select the Print button from the ManEx action buttons at the top of the screen
 
 
The following reports screen will display a list of reports that are available on the ManEx Desktop: 



 

Highlight the report and depress the option tab.

Credit Memo Displayed 

Selecting the “Single Credit Memo” radio button and depressing the OK button, will print the Credit Memo that is open within the Credit Memo Module, or being displayed in the CM Number.  User has the option to enter in any CM number they wish to view or Print.

If you want the ship to information displayed on the Credit Memo form check the "Display Ship To on Credit Memo" box.

Depress the Ok button. 

  

 

Selecting the "Select Credit Memo from the List" will display a list of all Credit Memo's based on the Printed or Unprinted selection.

Select the appropriate Radio button to list "Unprinted CM" or "Printed CM" to select from.  Highlight the Credit Memo(s) of interest and depress the > button.  Your selection will appear in the right hand box.   If you want all of the Credit Memo’s, depress the >> button.

 

If you want the ship to information displayed on the Credit Memo form check the "Display Ship To on Credit Memo" box. 

The following report will be displayed:



Credit Memo Summary Report:

Select the appropriate Starting and Ending Date Range. 

Enter a Customer Name (if all customers are desired leave * as default) 

Depress the OK button 

  

 The following report will be displayed:


Credit Memo Register Report:

Enter the Starting and Ending Date Range. 

Depress the OK button. 

  

The following report will be displayed: