You can generate a direct Credit Memo for an Invoice, where each Credit Memo Line Item will have a reference to the source Invoice Line Item.  Please note that a Credit Memo Line Item will always have a one-to-one relationship with the Invoice Line Item.

You can create a Credit Memo manually against an Invoice from the Invoice Detail page. You must add a Create Memo Email Template on the Account, confirm the Pre-requisites before going further.

To Create a Direct Credit Memo

  1. Click Create Credit Memo located at the top of the page.
  2. Select either one of the Credit Type. 
    1. Full Credit: Select this value to set the entire available credit amount of all the invoice line items as the credit amount. 
    2. Line Level Credit: Select this value to enter an individual credit memo amount against individual invoice line items. If you select this value, you can use the filter to narrow down the list of invoice line items. You can filter the listed invoice line items by Product Type, Line Type, Price Type and Charge Type.
  3. The Invoice Line Items corresponding to the Invoice are populated along with their available Credit Amount. 

    The fields displayed on the create credit memo page are configurable through a system property. To configure the display fields, go to Setup → Custom Settings → Billing System Properties. Enter the API names of the field that you want to display in the Display Credit Memo Fields setting.

  4. Select Invoice Line Item(s) and enter the Credit Amount to offset against the Total Amount.
    Please note that you cannot specify a Credit Amount that exceeds the Available Credit Amount for a single Invoice Line Item. Also, the individual credit amount from invoice line items is aggregated to display the Total Credit Amount

  5. Click Next. You can now provide processing options for your credit memo. 
  6. Select Auto-Approve if you want to create credit memos in the approved status.
  7. Select Auto-Apply Credit to Invoice to auto-apply the created credit memo to the invoice. Auto-Apply option is only visible if you select Auto-Approve. For more information on auto-applying credit memos, refer to Auto Apply Credit Memo.
  8. Select Credit Memo Attachment Template.
  9. Select Credit Memo Email Template, Reason Code and then click Finish.

A credit memo is created with credit memo line items that hold information of the source invoice line items.

Approving the credit memo updates the Total Due Amount of the invoice by deducting the credit memo amount from the Total Due Amount and creates a Destination Related A/R Transaction on the related invoice. 

Credit Memos for Unpaid/ Partially Paid Invoices

Approving a credit memo creates a destination-related A/R transaction record on the related invoice. For unpaid or partially paid, you have the option to not apply it to an invoice. This is useful in a scenario where your customer cancels the subscription mid-plan or when the subscription is canceled before the customer had paid for it. 

When you approve an unpaid or partially paid invoice, clear the Auto Apply Credit to Invoice checkbox. A destination-related A/R Transaction will not be created on the related invoice.

Note

If you forgot to add a Credit Memo template at the Account level, the moment you click Create Credit Memo, you will see a warning 'Could not find suitable credit memo template.' This indicates that Credit Memo is created but the document is not because of the unavailability of a template. Go to the related Account, add a Credit Memo template and then click Redirect to Credit Memo. This action will take you to the Credit Memo detail page from where you can regenerate the Credit Memo by clicking Regenerate Attachment.