Credit Memo
Invoice TypesAnother name for a credit note — a document a seller issues to reduce or cancel an amount a buyer owes.
Detailed Explanation
Examples
- A SaaS company issues a credit memo for a duplicate monthly charge
- A wholesaler issues a credit memo for damaged goods returned by the retailer
Quick Q&A
What is Credit Memo?
Another name for a credit note — a document a seller issues to reduce or cancel an amount a buyer owes.
What does "Credit Memo" mean?
Credit memo (sometimes written as 'credit memorandum') is the same instrument as a credit note: it lowers the buyer's outstanding balance after a return, a pricing correction, a service issue, or a duplicate charge. The credit memo references the original invoice number, lists the credited line items, and shows the new balance. In the US the term 'credit memo' is more common, while 'credit note' is standard in the UK and most international trade. Either document can be applied against future invoices or refunded.
When is Credit Memo used?
A SaaS company issues a credit memo for a duplicate monthly charge ; A wholesaler issues a credit memo for damaged goods returned by the retailer