How to pay credit memo in Oracle Payables

How to pay credit memo in Oracle Payables

 

 

To know , how we can pay the Credit memo in Oracle Payables , first we should understand , What is credit memo and what its impact in the Accounting or In Liability. We creates credit Memos , when we need to take refund from the Supplier against using his Services or against his Purchase Goods.

But why we need to take refund from the Supplier , Look there could many reasons when we take refunds from the Supplier. Suppose , we have received Purchase goods from the Supplier but we found few of them is damage and my supplier will give the invoice for all the Purchase Goods , but why I should pay for this damage goods for this , We can create Credit Memo and do refund from the Suppliers for the damage Goods.

 

Now we are coming on, how we can pay Credit Memo in Oracle payables

There are Two way , by which we can pay Credit Memo in Oracle , but these ways depend upon the business scenario. I will explain both these two ways with the business scenario.

1^st Method: -

If You have any Standard Invoice for the Supplier which is not yet paid and you also want to take refund from this supplier then you create the Credit Memo for this Supplier, and then create the payment to the Supplier against this Standard invoice but by netting credit Memo too from this Invoice , so that you will do the payment to supplier after deducting your refund from the supplier and by this Way you will pay Credit memo and Standard Memo together.

 

For Example: you have Standard Invoice for the Amount of $100 and you want to take refund for $20 so you will create credit memo invoice for $20 and then Create an Payment for this Supplier for $80 and then select the Standard Invoice of $100 and Credit Memo of -$20 in the Adjust Invoices and by this Way you will pay Credit memo and Standard Memo together.

 

2^nd Method: -

If you want to take refund from supplier, but you don’t have any standard Un-Paid invoice for this supplier, so that you can adjust credit Memo created for the Refund against this Standard Invoice. For this kind of scenario where you want to take refunds from the Supplier but you don’t have any supplier Standard Un-Paid Invoice to Adjust the credit Memo created for the refund then in this case , We will take actual refund from the Supplier by creating the Payment of Type ‘Refund’ as below.