How to Enter a Credit Memo in a Payable Invoice.

After you have returned product to a vendor or otherwise demonstrated that you are eligible for a refund, you will likely be issued a Credit Memo. Entering the Credit Memo will be a very similar process to what you used to enter the Invoice originally. Use the Credit Memo number the vendor issued as the Invoice Number to allow you to reconcile your records to theirs, and enter the amount of the Invoice (Credit Memo) as a negative amount.

This will create an Invoice to this vendor with a credit balance. This Credit Memo can then be used to offset a payment you will be making to the vendor later, or if the vendor issues you a refund check, you can use it to “pay off” this Credit Memo.