About AP adjustments

There are two types of AP adjustments:

  • Credit memo: increases the amount that you owe the vendor.

    For example, you thought you received a discount of 20%. You shorted payment of the bill by 20% and adjusted the balance of the remaining amount owed. The vendor says you short paid by too much. You still owe them $1,000. Because you are not going to get another bill from them, you enter a credit memo for the $1,000. When posted, the credit memo appears in the Pay bills list so you can pay them.

  • Debit memo: decreases the amount that you owe the vendor. This type of adjustment is sometimes called a vendor credit.

    For example, if the vendor credits you for a return, you can create a debit memo to decrease the overall amount you owe by the amount of the return.

You can create either type of adjustment from the AP Adjustments page.

Debit memo adjustment

When you create a debit memo adjustment, it appears on the Pay bills page as a vendor credit that you can then apply to a bill on the Pay bills page.

A debit memo adjustment becomes a vendor credit that you can apply to a bill on the Pay bills page to decrease what you owe to a vendor.

A vendor credit is different from a credit memo adjustment, which becomes a bill you pay on the Pay bills page, to increase the amount you owe a vendor.

Create an AP adjustment

For the Type, select Debit Memo.

Post the adjustment

The debit memo adjustment becomes a vendor credit.

Apply the vendor credit on the Pay bills page

Choose to either:

  • Automatically apply the vendor credit. On the Pay bills page, select the bill and select Apply credits.
  • Manually apply the vendor credit. On the Pay bills page, select the bill and select Line details.

Process the bill for payment

  • Create a payment request for the payment on the Pay bills page.
  • Take the payment through your normal Accounts Payable workflow (for example, approving the payment and printing a check).

Example

Say you receive a bill for $1000 for catering for an event and you pay the bill in full. Later, you discover that not all the services were provided and you contact the vendor. The vendor agrees to credit your account for $100. You would create a debit memo to decrease the amount you owe to the vendor by $100.

  Accounts Payable (credit account)
Debit Credit
  $1000, bill posted on May 1
Bill paid $1000 on May 2  
Debit memo posted $100 on May 8  
  Balance due: ($100)

Credit memo adjustment

When you create a credit memo adjustment, Intacct treats it as a payment because you’re increasing the amount you owe to a vendor. After you post the credit memo adjustment, it appears as a bill on the Pay bills page. Process the transaction as you would any other payment.

Create an AP adjustment

For Type, select Credit Memo.

Post the adjustment

Intacct treats credit memo adjustment as a payment to the vendor.

Process the credit memo adjustment as a payment to the vendor

  • View the credit memo adjustment on the Pay bills page.
  • Process the payment through your normal Accounts Payable workflow (for example, creating a payment request, approving the payment and printing a check).

Example

Say you accidentally underpaid a vendor or incurred a late charge for $50. You would create a credit memo to increase the amount you owe the vendor by $50. You would then pay the credit memo when you go to pay bills.

Accounts Payable (credit account)
Debit Credit
  $50 posted on May 1
Balance due: $50