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APEntering DR and CR Memos

Debit memos and credit memos in Oracle Payables are used to reduce invoice amounts for discrepancies identified by either the customer or supplier. A debit memo is entered to decrease an amount and is initiated by the customer, while a credit memo increases an amount and is initiated by the supplier. There are two scenarios for entering a credit or debit memo - if the invoice was already paid, it will create a refund, and if unpaid, it will reduce the payment amount. The document provides steps for entering transactions for both scenarios.

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193 views3 pages

APEntering DR and CR Memos

Debit memos and credit memos in Oracle Payables are used to reduce invoice amounts for discrepancies identified by either the customer or supplier. A debit memo is entered to decrease an amount and is initiated by the customer, while a credit memo increases an amount and is initiated by the supplier. There are two scenarios for entering a credit or debit memo - if the invoice was already paid, it will create a refund, and if unpaid, it will reduce the payment amount. The document provides steps for entering transactions for both scenarios.

Uploaded by

sherif ramadan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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AP: Entering DR and CR Memos

Before getting into the transactions, lets see what are Debit Memos and Credit
Memos.

In Oracle both of them are used to reduce the invoice amount. This reduction can be
of any reason and from either side i.e. the organization using Oracle Payables
(Payer) or the Supplier (Payee) it is going to pay.

There is a concept that if an invoice amount needs to be increased then a CR memo


is entered and if it needs to be decreased then DR memo is entered. However this
concept doesn’t apply in Oracle Payables. Here in Payables the difference between
CR and DR memo is of initiation i.e. a Credit Memo is given by the supplier if it finds
any discrepancy the amount invoiced and debit memo is given by the customer if
they identify any discrepancy.

Debit Memo: A negative change in invoiced amount identified by customer and sent
to supplier.

Credit Memo: A negative change in invoiced amount identified by supplier and sent
to customer Moving on,

There are two possible scenarios in Payables for entering a CR or DR memo

1. The invoice is paid


2. The invoice is not paid

In first scenario where invoice was overcharged and has been paid to the supplier; a
CR/DR memo will create a Refund i.e. receiving amount in the bank.

In second scenario where the invoice is overcharged but open or not paid; a CR/DR
memo will reduce the payment amount.

Here are the steps for entering the invoice for Scenario 1
1. Create an invoice if you want to test this scenario, let’s say invoice number
INV-001 with amount 15000/-
2. Create CR/DR memo for same supplier in INV-001
3. Give it a number say INV-001DR1 with amount -3000/-
4. Scroll the invoice header section to the Match Action column and select
“Invoice” from the drop down.
5. Don’t give the Invoice Line or Distribution amount.
6. Click on Corrections button.
7. Enter invoice number to be corrected i.e. INV-001 and click Find.
8. Click on Select and enter the amount to be corrected say -2000 or the total
amount -3000.
9. Click Correct.
10. With this, the Invoice Line and Distributions will be copied to CR/DR memo
with the respective correction in Distribution lines.
11. Now perform the validation.
12. Create Accounting is optional.
13. Now pay the CR/DR memo; you can use the “Pay in Full” option or the
Payment window.
14. Select the bank account in which you are receiving the refund from customer.
15. Enter the check number, which is used by supplier to pay the refund amount.
16. Save the Transaction.
17. The accounting in this case will debit your bank account and Credit the
Liability.

Accounting Entry for Refund:

CR/DR Memo

Liability DR

Expense CR

CR/DR Memo payment

Bank DR
Liability CR

Here are the steps for entering the transaction in Scenario 2

1. The Invoice for this scenario will also be created already.


2. Enter the CR/DR memo with the reduction amount.
3. Go to payment window.
4. Select the Supplier and every other detail.
5. Select the bank account and document number you are paying from.
6. Click Enter/Adjust Invoice and select the Standard Invoice for which the
amount should be reduced in the first line and the CD/DR memo in the next
line. You will that the Total will be reduced which will your payment amount.
7. Save the transaction.

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