Credit Memos and Add-ons

Why would I use one of these?

These options allow recording any changes to a customer order in the event that a customer changes his or her mind about certain items from the original order.  This gives documentation by date of any changes to the order , which can be done in the form of an Add-On (positives) or a Credit Memo (negatives). 

Credit Memos

How Credit Memos Work

The system will automatically transfer all of the pertinent information from the original customer order to the credit memo and assign it to the same order number.  Enter the credit amount as a negative figure.  This will reduce the grand total of the original customer order by the amount of the credit memo and will reflect the adjustment when it is re-run through job costing.  If any merchandise was returned, remember to un-assign and delete any lines that may have been affected before rerunning the order through job costing.  Deleting those lines will return the merchandise to inventory available.   The only advantage in creating a credit memo as opposed to just editing the original order is that a credit memo will give you documentation by date of any changes to the order.  There is no limit to the number of credit memos allowed.  Credit memos will affect the commission and sales tax on the original order.  Also, if the amount of the credit is entered in the Material field, the lines must be adjusted accordingly if Balance Lines to Header is used.

Credit Memos - Closed Month

If a credit memo has to be issued against an order originally written in a month for which the General Ledger is now closed, the credit memo must be written as a separate stand-alone order.  It will have to be assigned its own order number and entered as an original order.  If issuing the number instead of using a computer-generated number, you may wish to preface the number of the original order with "CM" and use it for the credit memo number.  This would identify it as a standalone credit memo and would immediately tell you what this negative record references.

Add-Ons

If after an order has been written up and already entered into the system, and you would like to add to it (i.e. ,the customer decided to include the utility room), creating an "Add-on" will allow you to attach this addition to the original order so that it will be job costed together.

The purpose of an add on is to show the customer an additional charge on an invoice.  Doing the add on makes that second page print out.  An example would be the installer went to do the job and there was furniture to move that they were not told about, so an add-on would be created.

This selection will import all of the pertinent information from the original order to the add-on, now identified by the same invoice number.  You will merely have to post the date of the add-on and the additional amount. Any additional inventory used will have to be listed as a new line on the original order.

If the original order has already been job costed, it must be un-job costed before an add-on can be attached , and then re-job costed.  If the original order was written in a month for which the General Ledger has now been closed, it cannot have an add-on.  A separate invoice for this billing must be entered , and job costed by itself. You may add it to a billing group to associate it with the original order.

The advantage in creating an add-on, as opposed to just editing the original order, is that an add-on gives documentation by date of any changes to the order.  If the amount of the Add-On is entered in the Material field and Balance Lines with Header is used, the lines must be adjusted accordingly.

Adding a Credit Memo or Add-on

This screen allows adding, changing, or deleting a credit memo or add-on that is associated with an open customer order.  The listing displays all entries for the customer order broken down by material, services, misc. charges, sales tax, misc. tax and order total.  If the entry total ends up being a negative, the record is considered a Credit Memo and will display as a minus sign -.  If the entry total ends being positive, the record is considered an Add-on and will display as a plus + sign.

To add an Add-On or Credit Memo:

From Order Entry

Go to File>Customer Orders

Open Existing Order

Click the AO/CM button at the bottom of the screen 

Notes about Add Ons and Credit Memo

For every Add On or Credit Memo there needs to be a new line added.

If you add an add-on or credit memo with monies in the Misc Charge field then that money stays on that header the original does not get populated with that amount. 

When you print the invoice you will get an invoice + an add-on invoice.

If you put money in the material fields it has to add up back to what the lines read. 

To keep it simple, we have always told the clients that all headers that have money in the material field, has to add up to the dollar amount on the lines. So if your lines add up to $1000.00 then the sum of each header (original + add-on + credit memo + overage) has to add up to $1000.00 as well. If you enter a dollar amount in the Material field on an add-on, credit memo and you do not have any lines, then the original header will get a negative number in the material field.

Also see Processing Add-on or Credit Memo