Sales Credit Memo

Use this page to create sales credit memos.

For a full description and more information on this page, see the Microsoft Dynamics 365 Business Central documentation .

Credit Memo Adjustments

When a credit memo is applied to a deferral schedule, the adjustments are different based on the type of deferral schedule.

• Straight line

  A credit memo is applied to a straight line deferral schedule using the following settings: 

  • Adjustment method is trueup
  • Credit memo amount is based on the amount of the originating transaction. If the original amount is greater than the remaining unapplied amount, the credit memo amount is reduced to the unapplied amount.
  • Recalculation date is based on the date you specify. This date cannot be later than the unrecognized period.
  • End date is the date you specify.

  A credit memo is applied to a straight line deferral schedule that originate from an ARCB billing schedule use the following settings: 

  • Adjustment method is trueup
  • Credit memo amount is based on the calculated refund amount.

    Deferral schedules that start after the termination date are adjusted by the full amount. The remaining amount goes to the deferral schedule that contains the termination date.

  • Recalculation date is based on the deferral adjustment method selected: 
    • When adjusting the entire schedule, the recalculation date is the start date of the deferral schedule.
    • When adjusting the unrecognized period, the recalculation date is the start date of the next unrecognized period.
  • End date is based on the Prorate Daily setting: 
    • When selected, the end date is the termination date.
    • When cleared, the end date is the last date of the termination month.

  When an ARCB billing schedule is terminated, all billing schedules that end on or after the termination date are adjusted. When this situation occurs, multiple ARED deferral schedules may also need to be adjusted. Each ARED deferral schedule is treated independently.

• Event-based

  When a credit memo is applied to an event-based deferral schedule, a new event-based line with a negative amount is added to the deferral schedule, where: 

  • Credit memo amount is based on the amount of the originating transaction. If the original amount is greater than the remaining unapplied amount, the credit memo amount is reduced to the unapplied amount.
  • End date is the date you specify.

Applying Multiple Credit Memos

One credit memo can be applied to multiple deferral schedule, and multiple credit memos can be applied to a single deferral schedule. However, the sum amount of the credit memos cannot exceed the credit amount nor can it exceed the amount of the deferral schedule.

For example, a deferral schedule for 3,000.00 is created. This following credit memos are created:

• Credit Memo 1 = 1,000.00
• Credit Memo 2 = 150.00

If needed, more credit memos can be created, until the sum of all the credit memos equals 3,000.00.

Create Credit Memo

To create a credit memo from the Sales Credit Memos list, follow these steps:

1. From the Sales Credit Memos list, select New to create a credit memo.
2. In the Sales Credit Memo page, select the customer.
3. In the Home tab, select Prepare > Get Posted Document Lines to Reverse.
4. In the Posted Sales Document Lines page, select a line, and select OK.
5. Back on the Sales Credit Memo page, the Lines area is updated with the selected item.
6. If the item has a deferral schedule attached to it, select SBS Options > Advanced Deferral to open the SBS ARED Transaction (Sales Credit Memo) page and review the details of the deferral schedule.
7. After you finish review the deferral schedule details, close the page and return to the Sales Credit Memo page.
8. Post the credit memo.

When Use Acc. Amortization for Deferred COGS is Yes on the SBS ARED Advanced Revenue & Expense Deferrals Setup, and the credit memo is posted, the COGS, discount, and sales accounts are replaced with the deferral revenue, discount, and COGS accumulated amortization accounts. Also, the deferral schedules for the revenue, discount, and COGS amounts are created.

For credit memos created from a billing schedule, the deferral schedule is attached to the billing schedule. The deferral schedule information is transferred to the credit memo. Upon posting the credit memo, a deferral schedule for the credit memo is created.

To create a credit memo from the Posted Sales Invoice list, follow these steps: 

1. From the Posted Sales Invoices list, select the invoice you want.
2. In the Lines area, select the item for which you want to create a credit memo.
3. Select the Actions tab, and select Correct > Create Corrective Credit Memo.
4. The posted transaction is converted to a credit transaction and the Sales Credit Memo page appears with the transaction.
5. If the item has a deferral schedule attached to it, select SBS Options > Advanced Deferral to open the SBS ARED Transaction (Sales Credit Memo) page and review the details of the deferral schedule.
6. After you finish review the deferral schedule details, select OK to close the page and return to the Sales Credit Memo page.
7. Select Post.

When a credit memo is created, the end date for the deferral schedule is automatically updated based on the amount of the credit memo compared with the unrecognized amount: 

• If the credit memo is greater than or equal to the unrecognized amount, the deferral end date is updated to the end date of the next unrecognized period.

In this case, the deferral schedule is shortened, and the end date of the deferral schedule reflects the change.

• If the credit memo is less than the unrecognized amount, the deferral end date remains the same as the end date of the last unrecognized period of the deferral schedule.

In this case, the deferral schedule still has deferral periods that can be used to recognized items.

Unapply a Credit Memo

To unapply a credit memo, follow these steps: 

1. In the Navigation, select Home, and then select Customers.
2. Select the Actions tab, and select History > Ledger Entries.
3. In the Customer Ledger Entries list, select the credit memo you want to unapply.
4. In the Home tab, select Functions > Unapply Entries.
5. In the Unapply Customer Entries list, select Process > Unapply.
6. When you are asked to confirm the action, select Yes.

Add or Remove Item for a Revenue Split

To add or remove a item for revenue splitting, follow these steps: 

1. Use the Microsoft Dynamics 365 Business Central instructions to add a sales order .
2. In the Lines, add a parent item, complete all necessary cells for the line (e.g., Quantity), and select the Revenue Split check box.
   When you select on to the next line, the list is updated with the child items from the revenue split template.
   The item number for child items are slightly indented directly below the parent item.
3. To add a child item:
   1. Select the parent item, and select SBS Options > Add Revenue Split Child.
   2. Select the item you want to add and select OK.
4. To remove a child item:
   1. Select and right-click a line and select Delete Line.
   2. When you are asked to confirm the action, select Yes.

When you post the credit memo on this page, you can choose to suppress (or hide) the child items from the invoice using any of the following options: 

• On the Home tab, select Posting > Post and Send...

When you add an item that is a part of a revenue split, keep the following information in mind: 

• When the item you add is a parent in a revenue split template, the sales order list is automatically updated with the child items.
• You can add or remove child items.
• The quantity, unit, site, and warehouse values for child items are based on the parent item.
  You cannot change these values for the child items. Any changes must be made for the parent item.
• The sum of the net amount of the child items is equal to the Parent amount.
• If the SSP origin of the child item is the percent of parent standard or invoice price, the unit price shows a zero amount. However, the net amount shows the calculated value. If you change the unit price, the net amount is recalculated.
• If the MEA type for the sales order is single, the corresponding MERA transaction line is created when the parent and child lines are added.
• For a revenue split that has the Allocation method set to Variable amount:
  • The net amount of the parent item appears in the Parent amount column.
    This value can be edited. However, the unit price, net amount, and discount cannot be edited and show a zero (0) amount.
  • The unit price for child items shows a zero (0) value.
    You can edit the unit price or net amount, but cannot edit the discount.
  • If the invoice for the sales order has not been created, you can add or remove child items.
• For a revenue split that has the Allocation method set to Percentage:
  • The net amount of the parent item appears in the Parent amount column.
    This value can be edited. However, the unit price, net amount, and discount cannot be edited and show a zero (0) amount.
  • The net amount for child items is calculated as follows: Percentage * Parent amount.
• For a revenue split that has the Allocation method set to Equal amount:
  • The net amount of the parent item appears in the Parent amount column.
    This value can be edited. However, the unit price, net amount, and discount cannot be edited and show a zero (0) amount.
  • The net amount of the child items is calculated by dividing the Parent amount equally among all child items.
  • When child items are removed or added, the net amount and unit prices are recalculated so that all child lines have equal amounts.
  • If the Parent amount cannot be divided perfectly equal, the net amount and unit price of the last child item may be slighter more or less than the other child items.

Fields

This page contains the following fields: 

Field	Description
Header
User Defined Fields	Only the user-defined fields that are specified on the SBS ARCB Billing Schedule Setup page appear. If you do not see the user-defined fields, select Show More in the heading of the FastTab. The user-defined fields for billing schedules are independent and unrelated to the user-defined fields for deferral schedules.
Lines
Revenue split	Indicates that a line uses revenue splitting: On: Indicates that the item uses the revenue split feature. When selected, the list is automatically updated with all child items for the revenue split template. This check box can be selected only for the parent item in a revenue split. For parent items that have a revenue split template already set up, this check box is automatically selected when it is added to a sales invoice, sales credit memo, or billing schedule. To use revenue splitting for a sales order, the check box must be manually selected. Off: Indicates that the item is a standard item that does not use revenue split.
Parent amount	Displays the new amount of the parent item. When this cell has a value, the unit price for the parent item cannot have a value.

Actions

This page contains the following actions: 

Action	Description
Lines - SBS Options
Advanced Deferral	Opens the SBS ARED Transaction (Sales Credit Memo) page where you can view the deferral schedule for the selected line.
Add Revenue Split Child	Opens a dialog where you can select a child item to add to the sales document. Available only for parent items of a revenue split.
Contract Information	Opens a dialog list where you can review the billing schedule or deferral schedule contract information for the selected line item. This action is available when the credit memo created from terminating a billing schedule or returning an item for a deferral schedule. The action is not available when the credit memo is posted without any related billing schedule or deferral schedule.

See also

Credit Memo: Examples