Credit memo
Also called credit note
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is credit memo?
A credit memo is a document that reduces what a customer owes, issued to correct an invoice or to credit a return, a pricing error or a short shipment. It is applied against the customer’s open invoices or its next payment.
Credit memo example
Fifty units were billed at $14 instead of the $12 contract price, so the CSR issues a $100 credit memo that the customer deducts from its next payment.
Related terms
- Return merchandise authorization (RMA)A return merchandise authorization (RMA) is the approval and tracking number a distributor issues before a customer sends a product back.
- InvoiceAn invoice is the seller’s bill for goods or services delivered, listing the items, quantities, prices, freight, tax, payment terms and amount due.
- Accounts receivable (AR)Accounts receivable (AR) is the money customers owe a company for goods already delivered and invoiced but not yet paid for.
- Price overrideA price override is a manual change to the price the ERP calculated for an order line, made to match a competitor, keep a promise or save a sale.
