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Difference between Credit memo and subsequent debits/credits

12 Feb 2006 1:56 pm || 0

Subsequent Debits/Credits are used in cases where the quantity is in the original invoice is to remain the same. For eg.

PO 10 - $10
Gr 10 - $10
LIV 10 - $11 (Logistics Invoice Verification)

The vendor invoice is more than that in the Purchase Order. In order to correct, the Vendor may send in another invoice for
the Increased amount or a credit memo for the increased amount.

If you approve of the price increase, post the subsequent invoice received as a Subsequent Debit/Credit Invoice.

If it is a credit memo that has been received, then post the credit memo as Subsequent Debit/Credit.

This would retain the quantity but reduce the amount.

Subsequent Debit/Credit is for the case when the credit is not for the full amount eg. if the Vendor decided to credit
only the $1 overcharged.

Credit memo is for the credit of the full amount and value.