Debit Memo Module

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14.11.1 New (Enter A Debit Memo)

A debit memo is issued to a vendor to cover returned goods, pricing errors, freight charges, etc. It is basically a negative receiver (a receiver with a negative quantity).

Selecting "New" allows you to enter a debit memo. pc/MRP will prompt you to select the area receiving the parts. Select the inventory area the parts are being issued from (usually stores). Next, pc/MRP will ask "Should this Debit Memo reference a specific Purchase Order?". Select "Yes" if you can tie it to a specific PO. Enter the quantity you are returning as a negative quantity. By referring the debit memo to a specific PO, the quantity rejected field in that PO is automatically increased (Requires version 6.80 or higher). Select "No", if the debit memo is not from a specific PO. If the part has a part number, enter the part number and the quantity returned as a negative quantity. If the part has no part number, leave the part number as "NA" and quantity as a -1 and the dollar amount you wish to be credited as a positive amount.

The method we recommend to process debit memos follows:

As you can see, the above method works well if there are unpaid receivers that you can take a credit (actually debit) against.

The following methods are not as easy and are provided for special situations that do not fit into the above method:

You can tie a debit Memo to a specific receiver by editing the debit memo and changing its receiver number to the receiver number you want it to become part of. We do not recommend using this method, especially if you have already entered an I and or E type accounting transaction against the receiver (your AP dollar amounts will not cancel out). It is possible to do this if no accounting transactions (I or E) have been entered against the original receiver. In this case you would simply enter a normal I, and later an E type transaction, against the original receiver. Since the debit memo is attached to the receiver the I and E type transactions will be correct. The E type transaction will print out a check for the difference. Once again, this method should only be used if the original receiver has no previous I or E transaction registered against it at the time you tie the debit memo to the receiver. You will have to manually close the receiver after you entered the E type transaction by editing the receiver and putting a "Y" in the complete field for each of the of the line items including the debit line item(s).

If you have not received payment on the debit memo and wish to take a credit against a specific receiver, enter the debit memo, accept the next available receiver number, PO number "NONE" and line item number "00DM". If you wish to refer the debit memo to a specific PO then enter that PO number. By referring the debit memo to a specific PO the quantity rejected field in that PO is automatically increased. (Requires version 6.80 or higher.) Once you have finished entering the debit memo go back and edit the debit memo. Change the receiver number to the receiver number you wish to attach the debit memo to. Enter the original PO number and leave the line item as "00DM". Once you are finished you can reprint the receiver and the debit memo will be attached as part of the receiver.

If you have not entered an I type transaction for this receiver, do so now to debit purchases and credit accounts payable. When you are ready to pay the vendor enter an E type transaction to debit accounts payable and credit checking.

Once the debit memo has been entered the quantity of the part number listed on the debit memo will be increased.

If you have already entered an I type transaction for the original amount on this receiver do not modify the original I transaction. When you are ready to pay for the receiver, enter an E type transaction. The E type transaction will debit accounts payable and credit the checking account for the reduced amount. After the first debit for the reduced amount, debit accounts payable for the difference. After the first credit to the checking account for the reduced amount, credit purchasing for the difference.

If you do not wish to edit the debit memo and attach it to a receiver you could leave it as is, process it through accounting as you would a receiver and answer "NO" when it asks if you wish to print a check. When you do decide to issue a check to a vendor select the "Print Checks" option from the accounting menu, select "One check for multiple invoices, singe vendor". Enter multiple "E" transaction numbers containing the receivers and credit memo you wish to pay off the balance on.

If you have not paid for the original receiver, but have entered both the receiver and an I type accounting transaction into the GL (debiting 4110, purchases and crediting 2010, accts payable)

Enter a debit memo as described on the previous page.
Enter an I type accounting transaction to register the debit memo, line item DM.

debit 2010, accts pay, enter debit amount as a + amt
credit 4110, purchases, enter debit amount as a + amt

If the debit memo >= to the total value of the original receiver

close the original receiver by editing each line item and placing a Y in the CMP field
if the debit memo is not attached to the receiver
close the debit memo by placing a Y in the CMP field

If you have paid the vendor for the full amount of the items received and the payment has been entered into the general ledger, and you are requesting a credit in the form of a check to be paid at a later date.

Enter a debit memo as described on the previous page.
Enter an I type accounting transaction to register the debit memo, line item DM.

debit 2010, accts pay, enter debit amount as a + amt
credit 4110, purchases, enter debit amount as a + amt

When you receive a check for the debit memo amount enter an E type transaction for the debit memo, line item DM

enter a positive amount for the amount paid
debit 1020, checking acct, enter debit amt as a + amt
credit 2010, accts pay, enter debit amount as a + amt

If you have paid the vendor for the full amount of the items received and the payment has been entered into the general ledger, and you are requesting a credit in the form of a creditor a future order.

Enter a debit memo as described on the previous page.
Enter an I type accounting transaction to register the debit memo, line item DM.

debit 2010, accts pay, enter debit amount as a + amt
credit 4110, purchases, enter debit amount as a + amt

When you send a check to the same vendor for another item and it is short by the amount of the debit. Enter the transaction as though the full amount was paid, but in addition:

Enter an E type transaction for the original debit memo, line item DM

Enter a positive amount for the debit amt issued
debit 1020, checking acct, enter debit amt as a + amt
credit 2010, accts pay, enter debit amount as a + amt