MTS #20E Create a Credit Memo for Invoice Charges

Purpose:

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

Overview:

A sales order has been invoiced, 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, an adjustment can also be made to the appropriate Charge(s) at that time.

2.    Correct the customer invoice by making a change to the original Sales Order.

For example, the “Other Charges” at the bottom of a sales order can be used and a description entered to describe the adjustment.

If a wrong Ship Via was used creating wrong Delivery Charges, correct the Ship Via and the customer invoice will be automatically updated.

3.    Some situations may require a work-around to correct the invoice and issue a credit memo when it is for Charges only, not product:

•        Other Charges

•        Delivery Charges

•        Freight Charges

•        Surcharges

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. An “Other Charges Adjustment” inventory item description can be used.

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 adjustment item has been created, you'll need to add "inventory" to the item by using "Inventory Reconciliation" so you can put this item 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 Charges credited.  On the original sales order, add the Adjustment item to the sales order.

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

h.     Saving the sales order will automatically update the customers invoice.

i.      If you want to do this from the sales order, click 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 button and when prompted it will include

    the Charges credit. Determine if you want to include the sales tax if

    calculated.  See the Collect Sales Tax checkbox.

m. The Credit Memo will have a 0.00 cost item in it, and the Charges Adjustment amount that you are crediting. 

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