Using Debit Memos

Debit Memos are used to notify the vendor that an A/P adjustment is being made, such as for damaged goods received or to adjust an invoice amount that was too low. You define the reasons for the debit memos that your company uses and indicate how you want to apply the payables. Use the Debit Memo process to review original invoices and automatically create debit memos, if needed. This process minimizes the invoice processing time and maximizes cash flow, cash discounts, and back office processes.

Note: Users must be assigned the DEBIT.MEMO authorization key to create debit memos.

The Automated Debit Memo Setup control maintenance record defines how you want to handle the debit memo details, such as G/L accounts and payback reasons to use by default for applying the cost and quantities. Then, use the Automated Debit Memo window from A/P Entry to create standard cost, quantity, or freight debit memos automatically.

You can also review, cancel, or pay back a debit memo, if needed.

Note: These debit memo options are new in Release 9.0.2.

To use debit memos:

1. Set up the Automated Debit Memo Setup control maintenance record through Control Maintenance and save your changes.

2. From the A/P menu, select A/P Entry and display the account for which you want to create debit memos.

3. From the G/L menu, select Create Debit Memo.

4. Select the memo type you want to set up:

• Cost Debit Memo

  Field	Description
  Quote Number	The quote number supplied by the vendor for the debit.
  Name and Company of the Verbal Quote Contact	The contact name and company supplying the debit information.
  Debit Memo Amount*	The amount allowed for the cost debit memo.

  * Required

• Quantity Debit Memo

  Field	Description
  Reason*	The reason the quantity is being adjusted on the debit memo.
  Material & Quantity	Free form field. Enter the material type and quantity being adjusted.
  RGA or RMA	Returned Goods Authorization or Returned Material Authorization code required by your vendor.
  Debit Amount*	The amount of the quantity debit memo.

  * Required

• Freight Debit Memo

  Field	Description
  Debit Memo Account*	The general ledger account to which you want to apply the freight debit.

  * Required

5. Save your changes and exit the window.

Note: When debit memos are created, the system displays the information in the Notes pane of the Payable Variance Resolution Queue.