Debit Memos

This FAQ will go over how to create debit memos, which are used when returning items to a vendor.

Returned Item Getting Added back Into Stock

If an item is being returned, and is getting taken out of stock, a debit memo will need to be created.

Creating a Debit Memo

To create a debit memo, first go Accounts Payable and open a new purchase invoice. Enter the vendor that the item is being returned to and the change the purchase invoice type to “Debit Memo”.

Once an item is added to the invoice, enter it onto the debit memo with the same cost and quantity as the original purchase, but with negative pieces to record the return.

Repeat this process for each item getting returned. If the buying more items from the vendor, change the invoice type back to “Purchase Invoice” and enter the newly purchased items onto the purchase invoice. When finished, post the purchase invoice record the credit from the vendor. The credit can be recorded as needed; more information on that process can be found here: How to Deposit a Check or Reimbursement from a Vendor

Returned Item Not being Taken Out Of Stock

If an item is being returned but is not being taken out of stock, such as when the product was damaged during delivery but will be sold at a discount, go to Accounts Payable and create a Purchase Invoice. Enter the vendor that the item is being returned to and the change the purchase invoice type to “Debit Memo”.

Then add the miscellaneous item to the purchase invoice. Set “Pcs Shipped” to the amount being returned and then change the cost to the cost of the item getting returned. Be sure it is the same cost from the purchase invoice it was purchased on. That purchase invoice can be found by using the debit memo form in the first example, and then switching to a purchase invoice.

Repeat this process for each item getting returned. If the buying more items from the vendor, change the invoice type back to “Purchase Invoice” and enter the newly purchased items onto the purchase invoice. When finished, post the purchase invoice record the credit from the vendor. The credit can be recorded as needed; more information on that process can be found here: How to Deposit a Check or Reimbursement from a Vendor