How to Create Credit and Debit Memos

Credit and Debit Memos from TempWorks Software on Vimeo.

Before you create a memo:

Locate the invoice. Begin by locating the actual invoice which needs a memo. Once there, simply navigate to the invoice detail page of the invoice. Remember that you may search for invoices using numerous criteria in the invoice register of pay/bill or the invoice history section of the individual customer record.

Log a message. As a general best practice, log a message on the invoice stating why you are editing the invoice while also including the (1.) invoice number in the body of the message. This message will be logged in the (4.) messages page of the (3.) extended invoice details of the invoice (located on the bottom of every invoice detail page) and also on the (2.) Customer record.

Wait before you save. Each time you edit and save an invoice, a memo (or dash invoice) is made. So for example, if I had invoice number 123456 and edited it one time, I would have two invoices--the original invoice 123456 as well as a memo 123456-1. Then, if I edited the invoice a second time I would have three invoices--the original 123456, and two memos' 123456-1 and 123456-2. To limit the number of memos' (dashed invoices) you create it is thus recommended to do all invoice edits at once.

Note: After each invoice edit, the original invoice is always immediately updated to display the new balance.

Scenarios that may call for a Credit Memo:

  1. The client was billed too many hours for an employee.

  2. The client was billed at a higher bill rate than originally agreed upon.

  3. The client was billed for an item they should not have been billed for based on their contract with you (holiday pay, mileage reimbursement, etc.).

Scenarios that may call for a Debit Memo:

  1. Hours were missed for an employee and subsequently your client was originally under-billed.

  2. You discover the client was mistakenly billed at lower bill rate than originally agreed upon.

Creating a Credit or Debit Memo:

Step 1. Select the icon to open the invoice for editing. Please note that staged invoices (those that have not completed payroll and invoicing in totality) are un-editable.

Step 2. Select the icon for the specific (5.) transaction you would like to edit. You will notice when you do this, the pencil icon becomes shadowed.

Step 3. Following our example, we will change the (6.) Overtime Hours from 3 to 1. Since we are decreasing the hours billed we are creating a Credit Memo. If we were increasing the amount of billed hours we would be creating a Debit Memo.

Once done with all of your invoice edits, select the save icon:

Our original invoice 45162 automatically hides the (7.) invalid/original transactions by de-selecting the invoice item box. By default, the actual invoice will only display the (8.) corrected/updated transactions. Users may override this default by selecting the pencil icon to edit the invoice and marking the box next to each transaction they wish to appear on the invoice. Note that this type of edit will not create an additional memo (dash invoice).

When reviewing the (9.) invoice total, we can see the balance has been updated from $2,831.25 (see previous page) to $2,781.25.

In the invoice register we now have invoice number 45162, our original invoice, and 45162-1, our credit memo:

Upon reviewing the credit memo details, users will find that the same functionality which was available to them on the original invoice, such as the ability to preview, print, and email is also available on the memo:

Other items you can edit within an invoice:

There may be times when the invoice total is correct but some other item, like the PO number or job title for instance, is incorrect. To correct this, follow steps 1 and 2 listed above and this time select the (10.) pencil icon within the individual transaction.

This action opens the "edit transaction" window, which allows users to change a myriad of details associated with the transaction--invoice text, hours, rates, and payroll info.

Once done making all changes, simply select the icon in the bottom right.

Note: When editing specific transaction details, please follow the same precautionary "Before you create a memo" steps outlined in the beginning of this document.

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