18 November 2009
Debit Memo From LoveToKnow BusinessA debit memo is an informal invoice that a supplier issues to show an additional amount owed due to an error and is many times created based on a customer complaint.
When to Use a Debit Memo You may need to create a debit memo for various reasons like defective goods or because you have not charged the customer enough. A debit memo is used whether the error is found on the credit or the debit side of a transaction. Examples of corrections made with a debit memo include:
Reallocation of a charge Reallocation of receipt of funds Transfer of expense Account assignment corrections
Some companies develop recovery [Report Writing|reports]] to cover the event that a payment is received for an invoice previously written off as bad credit. If monies come in to pay this debt after the fact, the memo can be issued to replace the original invoice. Accounting then applies this receipt against the memo. It’s a good idea, if possible, to number the memo with the same number as the original invoice but to mark it with an asterisk or some other code so that when it appears in a detailed listing, the reference number indicates a recovery of funds.
Creating the Memo
To create a debit memo, you’ll follow the same basic format as a credit memo, including the customer name or number and the reason for the memo, along with details reflecting which items and quantities are affected. Include the number of the sales document or invoice, and any other delivery or billing documents. Parts of the memo include:
18 November 2009
Debit Memo:When a firm returns some goods to its suppliers,it prepares a debit memo and sends it along wih goods returned. Credit Memo: It is a document used to adjust or rectify errors made in a sales invoice, which has already been processed and sent to a customer.
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