Applying a Credit Memo or Miscellaneous Receipt

Modified on Tue, 27 Jun 2023 at 10:33 AM

Credit Memos and Miscellaneous Receipts can be applied to one or several invoices at once and can be used to reduce the outstanding invoices partially or pay them off in full.  Credit Memos and Miscellaneous Receipts are shown in the customer's activity ledger with negative balances.  


To apply a credit memo and/or miscellaneous receipt:


1) Open the Receipts window.

2) Click Add.

3) Choose Normal Receipt from the following “Choices” screen and click the “Proceed with Add New” button.

4) Enter the Customer code or press TAB and select from the pop-up list. Once a customer has been selected, a list of their outstanding invoices, unapplied credit memos, and unapplied miscellaneous receipts appears.  An example is shown in the following screen.


5) Press TAB and complete the fields for "Bank Code", "Date", and "Receipt No".  NOTE:  If it is a straight application, an example could be “APPLY” for the Receipt No field.

6) Select the Payment Method.  If a default payment method has been specified the value will already appear but can be changed as required. 

7) If you are entering a receipt amount at the same time as the application, enter it in the Amount field. If not proceed to Step 8. 

TIP:  If the amount of the receipt is $0.00 because it is a straight application of a credit memo or miscellaneous receipt to an invoice, the Payment Method will automatically change to “Application”.  This will only occur if the amount is $0.00.  In this case, no G/L distribution will be created but the entries will be applied and will be closed off when the receipt is posted. The distribution for the credit/receipt was already created when it was posted. If a credit/receipt is being allocated at the same time that a payment is being made, then a distribution is created for the amount of the payment only.


8) When doing an application, first select a credit memo or miscellaneous receipt from the list (the negative amount) before it can be applied to an invoice (the positive amount). Double click on it so that it will become highlighted at the top of the list. The full amount of the credit memo or miscellaneous receipt is shown in the Allocated field.

9) To use the whole amount, press TAB at the Allocated and Discount fields. The amount now appears in the Unallocated field where it remains until it has been distributed to an invoice, as shown in the screen below.

NOTE: If a receipt amount was entered, notice that the credit amount is now added to the receipt amount in the Unallocated field.

10) Select an invoice by double clicking on it in the list. It now becomes highlighted at the top of the list.

11) If you do not want to allocate the entire amount of the credit memo, enter that amount in the Allocated field.

12) Press TAB at the Allocated and Discount fields. The credit is now allocated.

13) Repeat steps 10-12 to allocate the remainder of the credit memo or miscellaneous receipt to another invoice.

14) Press ENTER or click Save to complete the entry.

When the receipt is posted, the customer’s account will reflect the application.  If there was no receipt amount entered, the customer’s balance will remain unchanged but the number of open items on their account will be reduced.

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