| Re: Credit Memo and Credit Note A credit note is a monetary instrument issued by a seller that allows a buyer to purchase an item or service from that seller on a future date. Credit notes may be issued by a seller as a goodwill gesture to a buyer who wishes to return previously purchased merchandise (instead of cash repayment) in circumstances where the original sales agreement did not include an explicit refund policy for returned items. In such circumstances, a credit note of value equal to the price of the returned item is usually issued allowing the buyer to exchange his purchase for other items available with the sale.
A credit note is a monetary instrument issued by the business that allows a buyer to purchase goods or services from the business on a future date. It is used by the customer who wishes to return previously purchased merchandise and to purchase some goods or services on a future date.
A Credit Note or Credit Memo is a document used to adjust or rectify errors made in a sales invoice which has already been processed and sent to a customer. If you have already sent an invoice to a customer but now need to provide a credit for that invoice, you would send them a Credit Note or Credit Memo. You can think of a credit note as a "negative invoice."
A Credit Note can also be raised for returned goods. After the sale, if the customer is not happy with the goods for various reasons like damage, expired he would return the goods. This transaction has to be reversed for accounting purposes and a special type called credit note can be used.
A Credit Memo (short for "credit memorandum") is a commercial document issued by a seller to a buyer, listing the products, quantities and agreed prices for products or services the seller provided the buyer, but the buyer did not receive or returned. It may be issued in the case of damaged goods, errors or allowances. In respect of the previously issued invoice, a Credit Memo will reduce or eliminate the amount the buyer has to pay.
The Credit Memo usually contains: PO #, Date, Billing Address, Shipping Address, Terms of Payment, List of products with quantities and prices. Usually it references the original Invoice and sometimes states the reason for issue.
Credit Memos are often called Credit Notes or just Credits.
The seller usually issues a Credit Memo for the same or lower amount than the invoice, and then repays the money to the buyer or sets it off against a balance due from other transactions.
The term may also refer to the document provided by a bank to a depositor to indicate the depositor's balance is being increased because of an event other than a deposit, such as the collection by the bank of the depositor's note receivable.
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Last edited by wils24; 01-26-2009 at 02:01 PM..
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