In SAP, a credit memo adjusts both the quantity and value of an original invoice, often used for full returns or significant overcharges, while a subsequent credit only adjusts the value of an existing invoice, leaving the original quantity unchanged. Subsequent credits are used for specific, partial adjustments, such as correcting an overcharged price for some items on an already-invoiced purchase order.
Credit memo
- Purpose: To credit a customer or vendor for a full return, complete overcharge, or other significant adjustments.
- Impact: Adjusts both the value and the quantity of the original transaction.
- Example: A customer returns all goods from a previous order. You would post a credit memo to reduce the amount owed and reflect the returned quantity.
Subsequent credit
- Purpose: To correct a price error on an invoice that has already been posted, where the quantity remains the same.
- Impact: Adjusts only the value, not the quantity.
- Example: A vendor accidentally invoices a higher price for several items than agreed upon in the purchase order. You would post a subsequent credit to reduce the value of the original invoice to the correct price without changing the quantity of the goods received.