Create a Credit Memo for Invoice Changes

Purpose:

To create a credit memo for Charges on the Sales Order that have been invoiced.

Overview:

A sales order has been created, and a correction is needed to any of the following Charges:

•         Other Charges

•         Delivery Charges

•         Freight Charges

•         Surcharges

There are three ways to handle this situation:

• 1.     When creating a credit memo for product sold on the invoice, make the adjustment to the appropriate Charges at that time. 

• 2.     Correct the invoiced Sales Order for the error created. 

The Other Charges can be a negative or positive value (amount) and “Other Chgs Comments” is used to describe the adjustment. The wrong Ship Via can be changed to correct the Delivery Charges.

• The sales order will automatically update the Invoice and email the corrected invoice to the customer.

• 3.     Some situations may require a work-around to correct the invoice and issue a credit memo. 

The procedure for this workaround is:

a.      Create an inventory item that can be easily identified as a credit item for freight/delivery/other charges. Many people use “Other Charges Adjustment” as the description

b.      Make all costs and sales prices for this item "0.00" with buying/selling units as "each"

c.      Be sure to assign the correct G/L accounts to this inventory item 

d.      Once the item has been created, you'll need to add "inventory" to the item by using "Inventory Reconciliation" so you can use it on a sales order

e.      Once that's done, the new item is ready for use.

f.      Locate the Sales Order whose invoice needs to have the charges credited.  Changes to an order, once posted, must be done on the sales order. 

g.     Unlock the sales order and add your newly created "Other Charges Adjustment" inventory item. 

h.       Saving the sales order will cause the invoice to update. 

i.     While still in the sales order, click on the "Print Order & Create Invoice" button.  Then click on Open Invoice

j.       On the invoice, select the newly created item and go through the normal process to credit that item.  Now you have access to the delivery charge area. 

k.     Type in the amount for the Charge Adjustment that's being credited - do not use a negative number!

l.      Click on Create Credit Memo and when prompted it will include the Charges credit, and sales tax – if the checkbox is checked.

m.      Your Credit Memo will have the 0.00 cost item in it, and the Charges Adjustment amount that you are crediting.  This will now be exported when End of Day is run.