Hello, trying to understand EXACTLY how credit memos work. Say I have a vendor invoice I need to pay but because of issues my vendor has to give me a credit memo to reduce the amount I owe them. So now, how does this work? Does my vendor send me a credit memo document (piece of paper) with a number on it ? I have to enter that on my side of the transaction but a "credit" on the payables side increases my liability so do I then create a debit memo? If I have to create a credit memo in my system, now I have two numbers - my vendors and mine so what number do I use when I apply the credit memo to my payable. I'm very confused as to how this works. I need step by step detailed explanation to understand how this works.
- posted 10 years ago