Credit Memo Template: Free Download, Create, Edit, Fill and Print

Tips for Filling the Template

A credit memo is a negative invoice used when there is a difference in the customer's original order or billed amount that may cause the customer to be in deep debt. Making a Credit Memo should be real easy when someone has the knowledge on how to do so here is a list of steps to be done when making a credit memo:

1. First off, make sure to indicate the words “CREDIT MEMO” at the upper right side of the page to avoid identifying it as an invoice. After doing so, you can place the credit date just below it and underneath is a unique number assigned for the credit memo.

2. On the upper left side of the page, you are able to place your company logo and its slogan, if there is any. Below is the job and job description. In other cases, underneath the company logo is the business name and contact information of the sender of the credit memo. And opposite to that is to whom you are sending the credit memo. Included are the customer’s business name, address and contact information.

3. After indicating whom it is to be sent to, on the next portion, indicate the sales person, if there is any, the invoice number, order number and especially the payment term.

4. Next is, the detailed information must be enlisted in a table. Make a table to list down the quantity of each credited item in the first column, the item number in the second column, description of the item in the third column, unit price in the fourth column, and lastly the line total which is by multiplying the item’s prize with the quantity. Label the columns with an appropriate name.

5. Afterwards, calculate the total from the last column and write the total in at the bottom of the memo with a name ‘sub-total’. Then multiply the sub total with the sales tax and name the line ‘sales tax’. Lastly, add the sub total and sales tax then put it into the line you will label as ‘total’.

6. This step is optional. You can put comments or notes to the customer at the end of the credit memo.

What is Credit Memo

A credit memo is an abbreviation of the term “credit memorandum”, a document issued by the seller of goods or services to the buyer for different reasons such as the buyer returned goods to the seller, or there is a pricing dispute, or marketing allowance. It may also be issued because, or for some other reason the buyer will not pay the seller the full amount of the invoice. It may also be known as a financial document which is issued officially by businesses during every notable transaction. It usually includes details of exactly why the amount stated on the memo has been issued, which can be used further to collect information about credit memos to determine why the seller is issuing them. The seller records the credit memo as a reduction of its accounts receivable balance, while the buyer records it as a reduction in its accounts payable balance.

Credit Memo Basic Format

A credit memo can be divided into three parts, the header, body, and footer. The words, “CREDIT MEMO” are always written at the top of the paper. The header contains the letterhead which has the company logo, business name, address, telephone & e-mail and web address if available. The business registration and Goods & Services Tax number must also be included, as per in some other countries. There is also a running serial number that is maintained and should only have one number per credit note issued.Payment terms are indicated after the credit note date. Indicated also is the customer’s reference number, if there is any, the own reference number and for the last part of the header, the client name and address is written. As for the body, a description is present and clearly indicates important information to why the credit note is created. There is a listing of the quantities, products ordered or shipped, its description, the price, etc. At the bottom part, a total of all credits issued and the adjustments required for sales tax and shipping. You may also add comments or notes to the customer at the bottom of the credit memo.

More tips about Credit Memo

1. Remember that no two credit memos can have same running serial numbers. Each of it must have only one that is specifically released for every transaction; this is to maintain tracking of records.

2. You can include all the payment methods like credit card, cash on delivery or any other method also mention the date of payment and conditions for late payment and it must provide information on the condition and status of a customer relationship.

3. Make sure that the customer won’t have confusions on what the total amount is. Customizing a credit memo can be ideal but make sure that it would sacrifice the readability and credibility of the memo. One may opt out to use some color schemes for every related contents and a highlighting color for the totality.

4. A single Credit Memo must not be re-used or re-issued for every transaction must be unique from one another.