Wednesday, December 5, 2018

Apply Credit Memo to a Cash Sale

Credit Memo can only be applied to Open Invoices under the same Accounts Receivable account. By standard process, a Cash Sale does not impact Accounts Receivable, thus, a credit cannot be applied into.


There will be times when a customer has an outstanding credit memo and they would like to offset this and see the credits being applied to the Cash Sale.


To accomplish this, we can create an item that will serve as a credit against the Cash Sale transaction.


1. Create a Payment type of an Item.

1.1 Navigate to Lists > Accounting > Items > New.

1.2 Select Payment.

1.3 Enter an item name and fill out other mandatory fields.

1.4 In the Accounting tab > select Account button > choose Accounts Receivable account in the dropdown list.

1.5 Click on the Save button.


2. Create the credit memo as we normally would.


3. In the Cash Sale transaction, after all items were entered (or derived from its related Sales Order) select the item created from Step 1 and enter the corresponding credits to be applied. Make sure to add a negative sign before the amount to mark this as a reduction to the total balance.


4. Associate the credit memo against the cash sale.

4.1 Navigate to Transactions > Customers > Accept Customer Payments.

4.2 Select the Customer Name.

4.3 Check the Apply box for both the Cash Sale, in the Invoices subtab, and the Credit Memo, in the Credits subtab.

4.4 Click on Save.


Currently, there is no way to apply Credit Memos directly into a Cash Sale record. An enhancement request has been filed to address such limitation.

We can search for Enhancement # 88777 - Issue Credit Memos > Ability to apply a Credit Memo directly to a Sales Order or Cash Sale and vote for it.

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