![]() ![]() The memo is issued as a way to reduce the amount owed by the customer. Write the amount under the sales tax amount and label the line "Total. Start Free Written by CFI Team What is a Credit Memorandum A credit memorandum often shortened to credit memo is given to a customer by a seller that provides goods and/or services. Write the amount under the subtotal and label the line "Sales Tax."Īdd the sales tax to the subtotal. Label the line "Subtotal."Ĭalculate the sales tax for the credited items by multiplying the subtotal by your state's sales tax amount. This might occur, for example, if an invoice was too high or if part of the quantity covered by the invoice was returned. They are used to correct the purchase order history if the quantity invoiced was too high. Label each column with its appropriate name.Īdd all of the prices in the fifth column and write the total at the bottom of the memo. The format of a credit memo is similar to that of a standard invoice and should include all of the details required by both the seller and the buyer. As in the case of invoices, credit memos reference purchase orders or goods receipts. Multiply the item's price by the quantity to calculate the line total for the fifth column. Write the quantity of each credited item in the first column, your item identification number in the second column describe the item and the reason for the credit in the third column and the price of the item in the fourth column. The memo's number is a unique number assigned by you.ĭivide the center of the page into five columns. ![]() Include the date that you are issuing the memo, the credit memo's number, the original invoice number and the payment terms on the left side of the page or in the spaces provided by the template. Include any number or code that you use to identify the customer within your company. ![]() Use the appropriate blanks if using a template. Type your customer's information on the right side of the page if you are making your own memo. ![]()
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