This procedure is used to offset the open positive accounts payable invoices for a particular vendor against the open credit memo's for the vendor. This procedure may be used to remove incorrect invoices from a vendor account or to adjust the balance of a vendor invoice before it is paid. Note: This procedure is optional as the operator can also close both the invoice and the credit memo by including them both on a single check This will cause the check to include the net amount of the invoices and the check transaction will close both invoices).
• Select the AP Vendor Lookup program from the menu and FIND the vendor whose credit memo's are to be applied.
• Determine which invoice and credit memo are to be applied. Write down the register numbers or the invoice numbers of the invoice and credit memo to be applied.
• Select the AP Credit Memo Application program from the AP Utilities menu. Key in the register or invoice number of the credit memo to be applied in the appropriate field and FIND the credit memo. Once the correct credit memo is displayed, press the ENTER key to move to the middle section of the screen, Key in the register or invoice number of the invoice that the credit is being applied to and FIND the invoice. Once the correct invoice is displayed, select the invoice by pressing the ENTER key. At this point, the cursor will move to the "Amount of Invoice to Apply" field, and the amount will default to the total amount of the credit memo. If the credit memo amount is more than the amount of the invoice, the operator should change the amount to apply so that it is not larger than the positive invoice (applying a credit memo amount greater than the invoice will cause the invoice to have a negative balance). The program will also allow the operator to apply only a portion of a credit memo to a specific invoice or multiple invoices.
• Once the operator has entered the amount of the credit that will be applied to the invoice, the operator presses the SAVE key to actually apply the credit. At this point, the system will post the invoice amounts as paid and display the journal entry number which was used to apply the credit. If the credit memo completely pays the invoice, the closed invoice should be filed in the closed AP file with a notation that it was paid with a credit. If the invoice is still open it should remain in the open AP file until completely closed.