DEFINITION

• Credit & debit memos in SAP enable adjustments to sales and purchasing invoice amounts.

• These documents are used to correct or modify initial invoices because of issues such as incorrect pricing, goods returns, or extra charges.

Credit Memo / Credit Note

A credit memo is issued when a customer has an overpayment or the invoice amount needs to be corrected. This might happen when:

• The original invoice was overcharged.

• The customer returned the goods.

• Discounts or rebates need to be applied.

• Customer pays less: It decreases the customer’s payable balance or increases the vendor’s receivable balance.

Debit Memo / Debit Note

A debit memo is issued to a customer when further payment is required. This could be due to:

• The original invoice amount was undercharged.

• Further goods or services were delivered beyond the original billing.

• Shipping or additional fees were omitted from the original invoice.

• Customer pays more: It increases the customer’s payable balance or reduces the vendor's receivable balance.

SCENARIO

Credit Memo / Credit Note

A customer was billed ₹1,000 for 10 units, but they sent back 2 defective units. The seller issues a credit memo for ₹200 to rectify the overbilling.

Debit Memo / Debit Note

A sale of ₹5,000 was made, but ₹500 for delivery charges was not included. To make up for this, a debit memo is sent to the customer, asking for the extra ₹500.

TRANSACTION CODE

• Sales (SD)

  • Credit Memo Request (VA01)

  • Billing (VF01)

• Purchasing (MM)

  • Vendor credit memo (FB65 / MIRO)

  • Vendor debit memo (FB60 / MIRO)

Distinctions Between Debit Memo and Credit Memo: