Debit Note:When a firm returns some goods to its
suppliers,it prepares a debit note and sends it along wih
Credit Note: Credit note nothing but Credit Memo. It is a
document used to adjust or rectify errors made in a sales
invoice, which has already been processed and sent to a
memo is a short note designating something to be
done,According to ORACLE PAYABLES,
CREDIT MEMO-issued by the supplier.suppose there are errors
in the invoice sent to the customer or there is aproblem
with the shipment then this memo will be issued to decrease
the amount specified int he original invoice sent to the
customer.here,the supplier balance will reduce.
DEBIT MEMO-ISSUED BY THE CUSTOMER,if there is a defect in
the goods,then along with the goods customer will send a
debit memo to supplier,so here the supplier balance will
Thus in both cases the supplier balances will reduce.
let me give an example.if the invoice amount is 1000$,if
supplier raises 100$ credit memo,then it is understood that
due to some errors in invoice,he is sending a credit
memo ,actual invoice amount is 900$.so the supplier total
balances will come from 1000$ to 900$.
Now,let us take the example of debit memo,if there are any
defect with goods supplied,say,for 100$ worth,then customer
will send debit memo of 100$ to supplier.so in this case
also the supplier balances come down from 1000$ to 900$.
Debit memo is a document which is prepared by the customer
to his suppliers to reduce in the amount due to over
casting or damage of the goods or services. It allows
negative balances only.
Credit memo is a document which is prepared by supplier and
sent it to customer to reduce his due due to overcasting in
the original invoice. It allows negative balances only.
The main difference between Debit Memo and Credit Memo is
the origin of the document. If it is prepared by customer
send it to supplier it is called as Debit memo and Supplier
will accept it after confirmation. Supplier will not
prepare Credit memo againt debit memo. And the document is
prepared by supplier it is called as credit memo and
customer will accept it but do not prepare debit memo
against supplier credit memo.
Debit Memo and Credit Memo functionality is same in Oracle
Payables i.e it reduces the vendor balances
but Debit memo issues by Company asking vendor to reduce
outstanding balance of the company where as credit memo
issued by Vendor or Supplier.
In Oracle payables, both debit memo and credit memo are one
and the same and are used to reduce the supplier's
liability for the goods returned to him. The former will be
prepared by us and the later will be prepared by the
supplier and sent to us.
Debit and credit memo both are negative in AP , both it
reduces the purchaserís liability and vendorís/suppliers
The reasons for raising debit memo by
. Over billing.(Good Returns )
. Duplicate billing.
. Wrong invoicing.
. Over tax.
. Over freight.
:Above case we can issue debit memo or we can take Credit
memo from Supplier ,
Supplier Debit Memo we will treate like standard invoice
The question is, "Will a Debit Note reduce Inventory during
Posting". In JDE World application it will not because the
post program do not inteface with Inventory. The answer is -
a credit sales order will reduce inventory, create a
credit invoice in AR, the reimburement program will create
a Debit note in AP.
can u make payment across two legal entity ? ex:- one primary ledger, two legal entity and one legal entity have "A" operating unit and another legal entity have "B" Operating unit .. i posted invoice in "A" OU, can i make payment through "B" OU ? if Yes what is mandatory setups ?