Collections - Credit Memos and Debit Memos

this document outlines the scenarios supported by nue for handling credit memos and debit memos customers use credit memos to reduce outstanding invoice amounts, typically issued for returns, discounts, or overpayments credit memos and debit memos can be created in nue through the following methods 1\ generate credit memos during the billing process, replacing negative invoices 2\ cash out / convert credits into credit memos 3\ generate credit memos when processing the refund against payments 4\ generate credit memos when writing off the invoice 5\ create credit memos over the invoice 6\ create standalone credit memos 7\ create debit memos for existing active invoices use case for generating credit memo credit memo source payment status billing process billing open cash out credits credit conversion open refund payment payment operation credit back write off the invoice payment operation written off create a standalone credit memo standalone open issue a credit memo over the invoice generatefromtransaction applied use case for generating debit memo payment status issue a debit memo over the invoice open once created and activated, credit memos and debit memos can be applied to active invoices to adjust the balance accordingly create standalone credit memos a standalone credit memo lets you give your customer a credit (for things like returns, disputes, or adjustments) that isn’t tied to a particular invoice this credit memo can be applied to any of the customer’s invoices at a later time how to create a standalone credit memo? go to the credit memo list page click the "new credit memo" button fill in these required fields transaction amount add at least one product (use "search products" to add) enter quantity (defaults to 1) and amount for each item tax amount can be set or auto calculated if enabled quick save lets you save a draft (still editable) save and activate to finalize; after activation, the credit memo monetary field can’t be changed, and it is available for use once activated, the standalone credit memo can be applied to any current or future invoice for the same customer if an invoice or the credit memo itself is canceled, the corresponding applied amounts are automatically unapplied issue credit memos over an invoice as a finance ops user, i am able to issue a credit memo over an invoice for disputes and other purposes, which in turn reduces the invoice balance and creates credit memo type payment applications when a finance ops user issues a credit memo over an invoice in nue, the following actions occur in one transaction in nue create a credit memo credit memo source is "generatefromtransaction", the credit memo items are generated based on the invoice items apply the credit memo to the invoice, and the credit memo items will apply to the corresponding invoice items create payment applications payment applications of the type “creditmemo” are created and associated with the invoice offset invoice balance the balance of the invoice is reduced by the amount of the payment transaction from the credit memo offset credit memo balance the balance of the credit memo is reduced by the applied transaction amount update payment status the payment status of the invoice is updated based on the total amount of active payment applications if the total amount of these payment applications equals the invoice amount, the invoice status is changed to paid if the total amount is less than the invoice amount, the status is changed to partially paid associate credit memo to invoice a credit memo application is created to associate the credit memo with the invoice it is applied to, ensuring accurate record keeping and reconciliation example for invoice #1 with a total amount of $100, containing three items, issue a credit memo ($10) over this invoice invoice ($100) credit memo($10) invoice balance ($100 > $90) invoice item #1 ($20) credit memo item #1 ($2) invoice item #1 balance ($20 > $18) invoice item #2 ($30) credit memo item #2 ($3) invoice item #2 balance ($30 > $27) invoice item #3 ($50) credit memo item #3 ($5) invoice item #3 balance ($50 > $45) apply credit memos as a finance ops user, i am able to apply a credit memo over an invoice for disputes and other purposes, which in turn reduces the invoice balance and creates credit memo type payment applications when a finance ops user applies credit memos to an invoice in nue or in the external payment system, the following actions occur in one transaction in nue create payment applications payment applications of the type “creditmemo” are created and associated with the invoice offset invoice balance the balance of the invoice is reduced by the amount of the payment transaction from the credit memo offset credit memo balance the balance of the credit memo is reduced by the applied transaction amount update payment status the payment status of the invoice is updated based on the total amount of active payment applications if the total amount of these payment applications equals the invoice amount, the invoice status is changed to paid if the total amount is less than the invoice amount, the status is changed to partially paid associate credit memo to invoice a credit memo application is created to associate the credit memo with the invoice it is applied to, ensuring accurate record keeping and reconciliation example for invoice #1 with a total amount of $100, payment #1 applies credit memo #1 for $30, and payment #2 applies credit memo #2 with an amount of $50 this partially offsets the invoice, changing its payment status to "partially paid" the following credit memo application will be created "credit memo application" a credit memo application refers to a payment application record with record type credit memo for simplicity, we’ll use “credit memo application” throughout this document payment application item invoice item id record type amount payment type payment id credit memo application pa 001 invoice item ii 001 credit memo $30 credit memo pa 001 id credit memo application pa 002 invoice item ii 001 credit memo $50 credit memo pa 002 id unapply credit memos as a finance ops user, i am able to unapply a credit memo from an invoice, which in turn increases the invoice balance, and creates credit memo type payment applications when credit memos are unapplied or partially unapplied from an invoice or debit memo, we will perform the following actions in a single atomic operation create credit memo applications (a k a , payment applications with record type credit memo) with transaction amounts equal to the unapplied amounts; increase the credit memo balance by the unapplied amount; increase the balance of the invoice by the unapplied amount, and update the payment status of the invoice partially paid if the invoice balance is smaller than the invoice amount; transferred if the invoice balance is equal to the invoice amount note it cannot unapply the credit memo from the invoice directly via nue collection ui when the credit memo source is "generatefromtransaction" example invoice inv 001 has an amount of $100 a credit memo of $20 was applied to the invoice which reduced its balance to $80 later, a finance ops user reverses the credit memo application from the invoice the following shows the details of the credit memo application payment application item invoice id record type amount payment type operation payment id credit memo application cma 001 invoice inv 001 credit memo $20 credit memo unapply external payment #1 id (original payment when applying the credit memo) after the credit memo is un applied, the invoice’s balance is back to $100, and its payment status is back to transferred reverse credit memos as a finance ops user, i am able to reverse a credit memo, i e , cancel applied credit memos, to correct errors occasionally, credit memos, even when they are already applied or partially applied to invoices / debit memos, need to be reversed due to billing errors or other mistakes reversing a credit memo is largely the same as un applying the credit memo followed by canceling the credit memo when a finance ops user cancels a credit memo that is already applied or partially applied, the following action occurs the credit memo is un applied from all invoices and debit memos credit memo applications with operation unapply are created for each reverse application the credit memo is canceled 📗 canceling credit back credit memos credit memos with type credit back are automatically created during the refund process and thus cannot be independently unapplied and canceled by itself when canceling an invoice, its associated credit back credit memos are automatically canceled as well example a finance operations user intends to cancel credit memo cm 001, which has an amount of $100 this credit memo was applied to two invoices $40 to inv 001 and $40 to inv 002 in this case, cm 001 will be un applied, which result in the following 2 credit memo applications payment application item invoice id record type amount payment type operation credit memo application cma 001 invoice inv 001 credit memo $40 credit memo unapply credit memo application cma 002 invoice inv 002 credit memo $60 credit memo unapply implementation guide webhooks the following webhooks docid z6xbd98qskku1fifbj5y events are raised when credit memos or debit memos are created, activated, canceled, applied and unapplied webhook event raised when credit memo created a credit memo is created, but not activated credit memo activated a credit memo is activated credit memo applied (coming soon) a credit memo is applied credit memo unapplied (coming soon) a credit memo is unapplied credit memo canceled a credit memo is canceled debit memo created (coming soon) a debit memo is created, but not activated debit memo activated (coming soon) a debit memo is activated debit memo canceled (coming soon) a debit memo is canceled apis you can use the following apis to manage credit memo transactions api description post /billing/credit memos\ apply apply a list of credit memos post /billing/credit memos\ unapply un apply a list of credit memos post /billing/credit memos\ activate activate credit memos post /billing/credit memos\ cancel cancel credit memos post /billing/credit memos create new standalone credit memos post /billing/debit memos\ activate activate debit memos post /billing/debit memos\ cancel cancel debit memos post /billing/debit memos create new standalone debit memos for detailed information, please refer to the api docs https //api docs nue io