Credit memo refund is a new feature in R12 that allows to create a invoice in AP from AR for the credit available for the customer in AR. To do this there is no need to create supplier record for the customer in AR manually.
Eg:
Completed Credit memo in AR
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Click on Action (in the toolbar) -> application
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Click on Refund Attributes button
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Enter the payment method , payment term and pay group
Click Apply.
Save
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AP invoice created
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the invoice created in AP is of type Payment Request and the supplier number and supplier sit name will not be populated for this invoice.
Accounting Entries
------------------------
AR Credit memo Accounting Entries
Revenue a/c------------Dr
To Receivables a/c----Cr
Accounting Entries in AR for Refund
Receivables a/c-------Dr
To Refund a/c---------Cr
AP Invoice Accounting Entries
Item Expense (Refund) a/c---------- Dr
To Liability a/c------------------------- Cr
Revenue a/c------------Dr
To Receivables a/c----Cr
Accounting Entries in AR for Refund
Receivables a/c-------Dr
To Refund a/c---------Cr
AP Invoice Accounting Entries
Item Expense (Refund) a/c---------- Dr
To Liability a/c------------------------- Cr
Where the credit/refund details will store in the back end.
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