CREDIT MEMO

Purpose and Benefits

Purpose
 A credit memo is a document issued by the seller of goods or services to the buyer, reducing the
amount that the buyer owes to the seller under the terms of an earlier invoice . The credit memo
usually includes details of exactly why the amount stated on the memo has been issued, which can be
used later to aggregate information about credit memos to determine why the seller is issuing them.

Benefits
 System integrated credit memo processing

Key Process Flows

 Create and approve PO
 Post GR
 Post Invoice
 Return delivery
 Credit memo
 SAP Application Required

Required
 SAP S/4 HANA

Company roles involved in process flow

 Accounts Receivable
 Accounts payable
 Warehouse clerk
 QM
 Detailed Process Description

Detailed Process Description

The process starts with the creation of a PO wherein all the

process such as the GR , IV and invoice posting takes place .
Now for any reason the material is damaged or broken the
purchaser will notify the vendor upon whose confirmation the
material is been delivered to him and a corresponding Credit
memo is created where in the vendor will pay the credits for
the damaged materials .
 Process Flow Diagram
Incoming
Event

Creating a
credit memo Vendor
Invoice

Confirma
tion to
Vendor

accept payments
the
material

Intimate the
vendor about
Buyer

Create po damaged
material
Warehou
se clerk

Post good
receipt

Reject
manageme
Quality

Damaged
nt

material
Accounts
Payable

Invoice
verification
Receivable
Accounts

Credit memo
 Legend
Symbol Description Usage Symbol Description Usage Comments
Comments

Band: Identifies a user role, such as Accounts Role band To next / From last Diagram: Leads Flow chart continues on the next /
to the next / previous page of the previous page
Payable Clerk or Sales Representative. This band contains tasks Diagram
<Function

can also identify an organization unit or group, common to that Diagram

rather than a specific role. role. Connection
>

The other process flow symbols in this table go into

these rows. You have as many rows as required to
cover all of the roles in the scenario.
Hardcopy / Document: Identifies a Does not correspond to a task
printed document, report, or form step in a document; instead, it is
Hardcopy / used to reflect a document
External Events: Contains events that start or end the Document generated by a task step; this
scenario, or influence the course of events in the shape does not have any
External
to SAP

scenario. outgoing flow lines

Financial Actuals: Indicates a Does not correspond to a task

Flow line (solid): Line indicates the normal sequence Connects two financial posting document step in a document; instead, it is
tasks in a Financial used to reflect a document
of steps and direction of flow in the scenario. scenario generated by a task step; this
Flow line (dashed): Line indicates flow to process or a
Actuals shape does not have any
infrequently-used or conditional tasks in a scenario. non-step event outgoing flow lines
Line can also lead to documents involved in the
process flow.

Business Activity / Event: Identifies an action that Does not Budget Planning: Indicates a Does not correspond to a task
either leads into or out of the scenario, or an correspond to budget planning document step in a document; instead, it is
outside Process that happens during the scenario a task step in used to reflect a document
Business Budget generated by a task step; this
Activity / the document
Planning shape does not have any
Event outgoing flow lines

Unit Process: Identifies a task that is covered in a Corresponds to

step-by-step manner in the scenario a task step in Manual Process: Covers a task Does not generally correspond to
the document that is manually done a task step in a document;
Unit Process Manual instead, it is used to reflect a task
that is manually performed, such
Proces as unloading a truck in the
s warehouse, which affects the
process flow.
Process Reference: If the scenario references Corresponds to
another scenario in total, put the scenario number a task step in
Process and name here. the document
Existing Version / Data: This block Does not generally correspond to
Reference covers data that feeds in from an a task step in a document;
Existing external process instead, this shape reflects data
Version / coming from an external source;
this step does not have any
Sub-Process Reference: If the scenario references Corresponds to Data incoming flow lines
another scenario in part, put the scenario number, a task step in
Sub- name, and the step numbers from that scenario here the document
Process
Reference System Pass / Fail Decision: This Does not generally correspond to
block covers an automatic a task step in the document;
System decision made by the software instead it is used to reflect an
Pass/F automatic decision by the system
Process Decision: Identifies a decision / branching Does not ail that is made after a step has been
point, signifying a choice to be made by the end usually executed.
user. Lines represent different choices emerging correspond to Decisio
Proces from different parts of the diamond. a task step in n
s the document;
Decisio Reflects a
n choice to be
made after step
execution