Applying credit memos or returns to sales invoices at month end can cause duplicate efforts.  If a user forgets to apply the credit memo, an invoice will populate on the aging report even though the true balance is $0.  In addition, applying credit memos or returns is an extra step that is sometimes unnecessary.   

To reduce efforts, users can apply a credit memo, return, or overpayment at the same time a user enters a cash receipt. To do so, enter the cash receipt details by going to Sales >> Transactions >> Cash Receipts. After you enter the cash receipt details (such as customer, date, payment type and amount), select “Apply” to open the Apply Sales Documents window.

From this window, mark the invoice to which you wish to apply this cash receipt.  Now, don’t hit OK yet as tempting as it is! Look at the details of your applied payment and invoice. Look at the example below:

1.) The total payment ($836.93) is applied to invoice INVS3008.

2.) The “Unapplied Amount” in the header is equal to zero, reflecting the payment is fully applied.

3.) On the invoice details the “Amount Remaining” is equal to $100, the apply amount is $836.93, and the original document amount is $938.93.

apply credit memo

Here is the trick – before you close the Apply Sales Documents window click the lookup icon next to “Document No” in the header of the Apply Sales Documents window. Don’t worry, you will not lose the information you just entered. Once you select the lookup icon, a list of unapplied credit memos, returns, and/or payments will populate as you see in the screenshot below. Double-click the document you wish to apply to the open invoice (in the example below you will notice the credit memo selected is in the amount of $100).

apply credit memo_2

You will now be taken back to the Apply Sales Documents window.  From here mark the invoice you are applying the open credit memo to. Continuing with the same example, you will see the credit memo is applied to the same invoice in which the cash receipt was applied. But now that the credit memo has been applied, the amount remaining on the invoice is zero dollars.  Nice – now you do not need to worry about this invoice showing up on your aging report. Better yet, you won’t request payment from the customer on an invoice that has in fact been paid!

apply credit memo_3

Once your credit memo has been applied, press OK from the Apply Sales Documents window and then save or post your cash receipt. This tip just marked one month-end process off the to-do list, prevented a false payment request from a customer, and allowed two transactions to be entered into one transaction window – genius! Need additional help with your Dynamics GP solution? Feel free to let us know by submitting the contact form below!