Creating Credit Memos

Objectives

After completing this lesson, you will be able to:

  • Create credit memos and adjust the amount owed by a customer due to errors, returns, or discounts in sales transactions.

Credit Memos

Most payment requests, or invoices, represent amounts due to a supplier. SAP Ariba Buying and Invoicing also provides support for payment requests associated with credits back to the buying organization. ​

Credit memos are invoices with the amount due as a negative number and represent amounts that suppliers owe to buyers. Every credit memo generates an invoice reconciliation document that requires approval, depending on your company's approval rules. You typically create credit memos in your site when you receive paper credit memos from suppliers and need to enter them for invoice reconciliation and payment.

  • Header-level credit memos: These credit memos are not itemized. Your administrator can configure your SAP Business Network account to receive header-level credit memos from suppliers on SAP Business Network. You can also create a header-level credit memo manually in your system and associate it with an order or contract.
  • ​​Line-level credit memos: These credit memos show line-item details. To receive line-level credit memos from suppliers on SAP Business Network, your administrator needs to contact SAP Ariba Support. You can also create line-level credit memos manually in your system from the referenced invoice by flipping the invoice into a credit memo.​

Submitting a header-level credit memo creates a header-level credit memo invoice reconciliation (IR) document and launches its approval flow. By default, the Invoice Agent group is added to the approval flow to approve the header-level credit memo. If there is any discrepancy between the line-item and header amounts in the credit memo, an Invoice Has Math Errors exception is raised and the credit memo is automatically rejected.​

When the IR document associated with the credit memo is approved, your payment to the supplier is adjusted by the amount specified in the credit memo.

When you enter a line-level credit memo from an invoice, all invoice lines and tax, shipping, and special handling charges (header- and line-level) are included in the credit memo with negative amounts. If the original invoice included any discount lines, they're included in the line-level credit memo with positive amounts.​​

You can not add additional credit lines or invoice lines (lines with positive amounts that aren't discounts, and that represent items for which your organization owes the supplier) to line-item credit memos.​Line-item level credit memos follow a similar path as header-level credit memos and submitting one creates a line-level credit memo invoice reconciliation (IR) document and launches its approval flow. However, line-level credit memos do not raise any invoice exceptions. When the line-level credit memo is approved, any purchase order or contract accumulators are updated with the line-item credit amounts. If the purchase order or contract was closed, the status remains closed, but the accumulators are updated and the payment to the supplier will be adjusted accordingly.

Creating a Credit Memo​

Play the video below to learn how to create a credit memo in your SAP Ariba Buying and Invoicing application. 

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