About AP adjustments

There are two types of AP adjustments:

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

    For example, you thought you received a discount of 20%. You shorted payment of the AP supplier invoice by 20% and adjusted the balance of the remaining amount owed. The supplier says you short paid by too much. You still owe them R1,000. Because you are not going to get another AP supplier invoice from them, you enter a credit memo for the R1,000. When posted, the credit memo appears in the Pay AP supplier invoices list so you can pay them.

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

    For example, if the supplier 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 AP supplier invoices page as a supplier credit that you can then apply to a AP supplier invoice on the Pay AP supplier invoices page.

A debit memo adjustment becomes a supplier credit that you can apply to an AP supplier invoice on the Pay AP supplier invoices page to decrease what you owe to a supplier.

A supplier credit is different from a credit memo adjustment, which becomes an AP supplier invoice you pay on the Pay AP supplier invoices page, to increase the amount you owe a supplier.

Create an AP adjustment

For the Type, select Debit Memo.

Post the adjustment

The debit memo adjustment becomes a supplier credit.

Apply the supplier credit on the Pay AP supplier invoices page

Choose to either:

  • Automatically apply the supplier credit. On the Pay AP supplier invoices page, select the AP supplier invoice and select Apply credits.
  • Manually apply the supplier credit. On the Pay AP supplier invoices page, select the AP supplier invoice and select Line details.

Process the AP supplier invoice for payment

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

Example

Say you receive an AP supplier invoice for R1000 for catering for an event and you pay the AP supplier invoice in full. Later, you discover that not all the services were provided and you contact the supplier. The supplier agrees to credit your account for R100. You would create a debit memo to decrease the amount you owe to the supplier by R100.

  Accounts Payable (credit account)
Debit Credit
  R1000, AP supplier invoice posted on May 1
AP supplier invoice paid R1000 on May 2  
Debit memo posted R100 on May 8  
  Balance due: (R100)

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 supplier. After you post the credit memo adjustment, it appears as a AP supplier invoice on the Pay AP supplier invoices 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 supplier.

Process the credit memo adjustment as a payment to the supplier

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

Example

Say you accidentally underpaid a supplier or incurred a late charge for R50. You would create a credit memo to increase the amount you owe the supplier by R50. You would then pay the credit memo when you go to pay AP supplier invoices.

Accounts Payable (credit account)
Debit Credit
  R50 posted on May 1
Balance due: R50