AR Invoice Correction: To Create a Credit Memo and Apply a Refund to It

The following activity will walk you through the process of creating a credit memo and applying an open refund to it.

Story

Suppose that SweetLife Fruits & Jams overbilled one of the customers, Morning Cafe, and received a payment in the amount of $35. An AR clerk has already created a refund for the needed amount. Acting as a SweetLife accountant, you need to decrease the customer's balance by creating a credit memo and applying the $35 refund to it.

Configuration Overview

For the purposes of this activity, on the Accounts Receivable Preferences (AR101000) form, the Hold Documents on Entry check box has been selected in the Data Entry Settings section.

On the Customers (AR303000) form, the MORNINGCAF (Morning Cafe) customer has been defined.

On the Payments and Applications (AR302000) form, a $35 refund for the Morning Cafe customer has been created.

Process Overview

In this activity, on the Invoices and Memos (AR301000) form, you will create a credit memo and apply a refund to it on the Applications tab. You will then release the credit memo and its application.

System Preparation

To prepare the system, do the following:

1. Launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as an accountant by using the johnson username and the 123 password.
2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/30/2024. If a different date is displayed, click the Business Date menu button, and select 1/30/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. On the Company and Branch Selection menu, on the top pane of the MYOB Acumatica screen, select the SweetLife Head Office and Wholesale Center branch.

Step 1: Creating a Credit Memo

To create a credit memo, do the following:

1. On the Invoices and Memos (AR301000) form, add a new record.
   Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
2. In the Summary area, specify the following settings:
   • Type: Credit Memo
   • Customer: MORNINGCAF
   • Date: 1/30/2024 (the current business date, which is inserted by default)
   • Post Period: 01-2024
   • Description: Overbilled amount
3. On the Details tab, click Add Row, and specify the following settings for the added row:
   • Branch: HEADOFFICE (inserted by default)
   • Transaction Descr.: Overbilled amount
   • Ext. Price: 35
4. On the form toolbar, click Save.

Step 2: Applying a Refund to the Credit Memo

To apply a refund to the credit memo you created in the previous step, do the following:

1. While you are still on the Invoices and Memos (AR301000) form with the credit memo opened, open the Applications tab.
2. On the table toolbar, click Add Row, and specify the following settings for the added row:
   • Doc. Type: Refund
   • Reference Nbr.: The number of the refund for Morning Cafe in the amount of $35
   • Amount Paid: 35.00
     Tip: If you are working in a production environment, you can specify any amount less than the amount of the refund to partially apply the selected refund to the credit memo.
3. On the form toolbar, click Save.

The following screenshot illustrates an unreleased credit memo to which a refund has been applied in full.

Step 3: Releasing the Credit Memo and Its Application

To release the credit memo and its application, do the following:

1. While you are still on the Invoices and Memos (AR301000) form with the credit memo opened, on the form toolbar, click Remove Hold.
2. On the form toolbar, click Release.

   On the Applications tab, notice that the status of the refund has changed to Closed because its amount has been applied to the credit memo in full.