List returns, pricing corrections, service issues, duplicate invoices, and other approved reasons. Require a customer, invoice, amount, date, and owner.
Add credit memo controls to accounts receivable support
Create a reviewable workflow for credit memo requests, source evidence, approval, posting, and customer balance reconciliation.
Published · 8 minute read
The short answer
- Tie each memo to a reason and source.
- Keep approval separate from entry preparation.
- Review the customer balance after posting.
Define acceptable reasons
Match the evidence
Compare the request with the invoice, contract, customer communication, and approval. The IRS recordkeeping guidance explains the value of records supporting income and expenses.
Prepare and route
The bookkeeper can draft the memo, check duplicate risk, and route it. The authorized reviewer decides whether the reason and amount meet policy.
Reconcile the outcome
Use the refund reconciliation workflow and cash application guide to check the customer balance and any refund or unapplied cash.
Review aged credits
Inspect old credits, repeated reasons, and memos posted near close. Keep an exception open until the customer balance and source trail agree.
Questions owners ask
Who should approve a credit memo?
An owner, sales leader, or finance reviewer with authority under the policy should approve it.
What does support check?
Check customer, invoice, amount, reason, tax treatment, approval, posting, and resulting balance.