From time to time you will need to apply a credit memo to another open invoice or issue a refund to the customer. In Simple Accounting, a credit memo is simply a sales invoice with a negative balance due.
A credit memo is always indicated by a C in the Status column of the Sales Orders browse.
To use the credit, select an open credit memo from the sales order browse. Then click on the [Apply Credit] button to open the Apply Credit window. You can now apply the credit memo in one of two ways:
1. Apply the credit to an open invoice.
2. Generate a refund check to the customer.
In both cases, once the credit memo is completely used, then the status of the record is changed to a P (indicating that it is paid) and the credit is considered closed.
Fields
The following fields are non-editing:
| Credit Date | The date the credit was originally issued. If this was a payment on account or a pre-payment, then this will be the Payment Date entered into the Payment. |
| Original Credit | The total amount of the original credit issued. |
| Amount Already Used | The amount already used. |
| Amount Remaining | The amount left, before the current credit is applied. |
| Credit Type: | Select either Apply To Another Invoice or Generate A Refund Check. The following fields are active depending upon your selection: |
| Invoice | Select an open invoice to apply the credit to. |
| Amount Due | This is the amount due on the selected invoice to apply to. |
| Bank Account | Select the bank account to generate the check from if this is a Refund Check. |
| Check Number | Enter the check number to print. This defaults to the next check number in the selected bank account. |
| Amount To Apply | The amount to apply today. This defaults to the Amount Remaining or, if you have elected to apply to another invoice, the amount due on that invoice. |
| G/L Account | The account to credit. This is normally your accounts receivable. |
| Discount | Enter any discount you are granting the customer, in addition to the Amount To Apply. |
| G/L Account | Enter the revenue account to be debited for the Discount (if any). This defaults to your Sales Discounts Account. |
Procedures
To Apply Credit To Another Open Invoice
1. Click the Apply Credit To An Open Invoice option.
2. Select an invoice to apply the credit to; use the field lookup button to select from a browse or simply type in the invoice number.
3. Enter the amount of credit to apply in the Amount To Credit field.
4. Optionally, enter an amount in the Discount field. This will also be applied to the open invoice, in addition to the amount of credit you are applying.
When You Would Use This: Lets assume the credit you are applying is $99.75 and you are applying that credit to an open invoice with $100.00 due. You may well decide to forego the $0.25 and consider the invoice closed. To do this you would enter $99.75 in the Amount To Pay field and the $0.25 in the Discount field. This accounts for the entire amount and closes both the credit memo and the invoice to which it was applied.
5. Click on the [OK] button to apply the credit.
To Generate A Refund Check
1. Click the Generate A Refund Check option.
2. Select a checking account from which the check will be drawn; use thedrop-down-list to select a bank account.
3. Enter a check number. The default is the next check number for the selected bank account, although you can override if this was a hand-written check.
4. Enter the amount of credit to apply in the Amount To Credit field. This will be the dollar amount of the check.
5. Optionally, enter an amount in the Discount field. This will also be applied to the open invoice, in addition to the amount of credit you are applying. It is not part of the check amount, however.
When You Would Use This Lets assume the credit you are applying is $95.00 and you are applying that credit to an open invoice with $105.00 due. The actual sale price was $95.00 with a $10.00 sales tax. The customer is a non-profit for which sales tax was inadvertently charged, so you wish to refund the $95.00 but reverse the sales tax. To do this you would enter $95.00 in the AMOUNT TO PAY field, the $10.00 in the DISCOUNT field, and your Sales Tax Payable Account in the DISCOUNT ACCOUNT field. This accounts for the entire amount and closes both the credit memo and the invoice to which it was applied.
6. Click on the [OK] button to apply the credit.
7. To actually print the check, go to the check register. You will see the credit you have just applied at the bottom of the register waiting to be printed. Press the [Print] button to print the check.
This button activates a [tooltip slug="browse-box"]browse box[/tooltip]. It is always placed directly to the right of an entry field and allows you to select a value for the entry field from the browse box. The browse box usually has all the same functions as if you had selected it from the main menu, so you can add, edit or delete records in the browse without leaving your original task.
Pressing <F6> on your keyboard when you are in a field with a lookup button works the same as pressing the Field Lookup button itself!
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