Credit Memo

What is a Credit Memo?

Defining this outside of Rapid ERP, a credit memo is typically a document a seller issues to a buyer to reduce the amount the buyer owes on a previous invoice, often for returns, billing errors, or overpayments. It functions as a formal adjustment, decreasing the seller's accounts receivable and the buyer's accounts payable. Buyers can use the credit memo to offset future payments or request a cash refund from the seller.

How to create a Credit Memo?

Below are the steps for creating Credit Memos in ERP:

Navigate to Accounting -> Credit Memo

Select the Customer that is receiving the credit memo.

Click the "Credit Memo" button at the top left of the page, then select "Issue New Credit Memo". Alternatively, right click the customer and select "Issue New Credit Memo"

A new window should appear. Start by selecting the Customer of your choice again.

Select a Sales Agent if needed.

Add any Comments or a Message

Select the "Credit Memo Type" if needed

There's an "Approved" checkbox once this Credit Memo is approved.

To issue the Credit Memo amount, navigate down to the Credit Memo Item List

Here the Invoice Item List can be used as a line item. Alternatively, this section allows for manual entry for a line item.

Next select the Quantity and the Unit Price. The total amount should now appear.

Next click "Save and Close"

How to use a Credit Memo

You can use Credit Memos to pay existing Invoices or Debit Memos in the system. Please follow the below steps to accomplish this.

While on the Credit Memo Page, select a customer

Any available Credit Memos will appear on the "Credit Memo Activity" Grid on the right

Right click the Credit Memo to be used, and select "Use Credit Memo", or simply double click the Credit Memo

A new window should appear, listing the Open Balances of Invoices and Debit Memos

Either of these two balances can be paid down or paid in full with the Credit Memo amount

Select which Invoice or Debit Memo should be paid, and update the "Applied On" column first

Next click inside "Applied Amount" column. The system will automatically apply as much of the Credit Memo as possible to pay the Invoice or Debit Memo. This amount can be adjusted to any amount desired.

Once complete, click "Save and Close"