Credit Memo Information and Processing

Credit Memo Information and Processing

Credit memos input in banner set up a payable in the system against the vendor. The FOAPAL that you use to input the credit memo receives a credit immediately, but the institution has yet to collect the monies. The credit memo will sit on the system as an open invoice against the vendor until there have been enough payment(s) to offset the credit memo. Banner also treats each address sequence for a vendor as a different vendor.

For instance, it will not apply a payment input to address sequence one, against an open credit memo that is input to sequence two. Before you input a credit memo against a vendor, review vendor history to make sure they will have sufficient activity to liquidate the credit. Also select an address sequence that will be used for other payments. Some companies have a long standing practice of using a different remittance address for their credit memos, than they do for their regular invoices. If you determine that the vendor isn't regularly used, we would prefer that you ask for a refund check instead of using a credit memo.

Periodically Accounts Payable will review the open credit memos in Banner. We may contact the originating user to discuss your future activity with the vendor or get a copy of the credit memo for contact information. If the determination is made that a credit memo will not be collected, it will be canceled, which will reverse the original entry. If you have any further questions call Accounts Payable at 6-3143.

Processing

To create a credit memo, all you need to do is click the check box selecting Credit Memo:  in the Invoice/Credit Memo Header block. See FAAINVE Direct Pay Invoices instructions located on the Banner Guide.

Important: You must select this option prior to "Entering Text" or leaving the first page. Then complete the document as you would an invoice.  It will automatically subtract the amount(s) you enter, so you don’t have to make them negative.

Before entering a large dollar credit memo, please contact A/P at 6-3143.  Large credit memos may hold up payments from other departments.  A/P will let you know how to process it.