Enter a credit or debit memo to record a credit for goods or services purchased.
Credit/debit memos are netted with basic invoices at payment time.

• Credit Memo: Negative amount invoice created by a supplier and sent to you to notify you of a credit.
• Debit Memo: Negative amount invoice created by you and sent to a supplier to notify the supplier of a credit you are recording. Usually sent with a note explaining the debit memo.

Entering Credit/Debit Memos
To enter a credit/debit memo:
1. In the Invoice Workbench enter either the Credit Memo or Debit Memo Invoice Type. Enter a negative invoice amount and all basic invoice information. Enter Immediate Payment Terms, if appropriate.

2. Enter distributions. You can enter them manually or enter them automatically in one of the following ways:

• Enter a skeleton Distribution Set.
• Match to the original invoice you entered.
• Match to a purchase order or receipt.

Matching Credit/Debit Memos to Purchase Orders and Invoices
When you enter a credit/debit memo, you can match it to existing invoice(s), purchase orders, or receipts to have Payables automatically copy the accounting information and create invoice distributions for the credit/debit memo.
For example, if you receive a credit for items you returned to a supplier, you can enter a credit memo and match it to the original invoice you entered to ensure that the credit memo distributes the credit to the same accounts originally charged. If you match a credit memo to an invoice for the full amount of the invoice, then the allocations on the invoice are copied to the credit memo. If you match a credit memo to only a portion of the invoice, then no allocations are copied to the credit memo. You can manually allocate credit memo distributions, or you can allow Payables to allocate during Invoice Validation of the credit memo.

Payables calculates discounts on credit and debit memos if the following conditions are met:

• You match them to invoices you paid using a discount.
• You use the same payment terms that were used on the original invoice
• The credit memo must be paid within the terms of the discount.

You can match to an invoice even if it is paid and posted. You can match the credit memo to multiple invoices, and at different levels of detail. Your available choices depend on whether the originating invoice was purchase order matched or not.

Clearing a Credit
You can clear a credit or debit memo you have entered and have been unable to include in a payment. For example, a supplier sends you cash in lieu of a credit invoice, and you have already entered a debit memo. You can pay the debit memo with a refund. 
Alternatively, you can perform the following task to enter a positive amount invoice to balance out the impact of the credit/debit memo. To clear a credit that will not be used:
1. Enter a Standard type invoice for the positive amount of the credit/debit memo. For example, if you entered a credit for -$10, enter a new invoice for $10. Other than the invoice amount and invoice number, enter all of the same basic invoice information you entered on the credit/debit memo.
You may want to enter a write off account on the distribution if you do not want the accounts on the credit or debit memo to bear the impact of the unrecovered credit.
2. If you matched the credit/debit memo to a purchase order, match the new invoice to the purchase order to correct the purchase order information.
3. Create a zero amount payment at payment time to net the new invoice with the credit/debit and clear both from your Invoice Aging.