Policy Steward: 
Director of Vendor Payment Strategies
Format Updated: 
University Policy & Standards Converted: 
Revision Date: 
Thursday, November 11, 2010

This information replaces FIS 406-06 Credit Memos


Credit memos are issued by the vendor to adjust a previous invoice; to refund an overpayment or adjust for returned merchandise.      

The credit memo must be matched with the original invoice to determine whether the credit should be processed.  When a credit is due for a previously paid invoice, process the credit memo in the same manner as an invoice.  Click on the Null Credit Memo field, otherwise a check will result instead of a credit being taken.  A cross-reference to the original invoice must be noted in the text section on the BANNER invoice form.  If a credit memo involves a previously discounted invoice, the credit memo should be reduced to reflect the original amount paid.

Equipment credits must have the word “credit” in the commodity description.

The credit memo will be posted to the unit’s operating ledger immediately (the offsetting entry resides on the fund balance sheet as a reduction of accounts payable liability, until new invoices from the same vendor satisfy the credit memo.)

If the vendor has not assigned a number to the credit memo, use the original invoice number with the letters CM, otherwise the BANNER system will consider it a duplicate invoice.

Many vendors submit credit memos to balance their accounts receivable, and the credit memo is for information only and should be retained in unit files. A refund check should be requested from the vendor for credit memos not applied to a vendor payment within a year.