Feature - Automatically Reapply Credit Memo to Charge-Back Debit Memo

Feature - Automatically Reapply Credit Memo to Charge-Back Debit Memo

Release Date: 3/23/22
Revised: 3/29/22

Version: 8.5 and Above

This feature will reapply an existing open credit memo to a debit memo the system just created during cash receipt posting. This will reduce the user’s database entry burden involved in performing the reapply.  

Traditionally, when a user performs a cash receipt posting, if the user enters an apply-to number (charge-back number) that does not exist with a negative amount, the system considers this to be a charge-back. The system will convert the negative apply-to amount to a debit memo during cash receipt posting.  The debit memo document number will be the check number, and the apply-to will be the charge-back number.  The intent is to have the system wait for a credit memo to be created and apply that to this debit memo in the future. Otherwise, this debit memo will be outstanding on the AR Aging Report. Most of the big box stores typically will charge-back right away even though the items have not yet been returned. Many of them treat charge-backs as profit-making opportunities and tend to abuse them. Therefore, our traditional assumption is that customers will charge-back before the credit memo is created, and the above function is an important mechanism to prevent them from abusing charge-backs.

On the other hand, you may ask your customers not to charge-back unless they receive your credit memo.  In that case, your customer will supply the credit memo number as the charge-back number.  If we follow through with the above logic, the user will need to reapply the outstanding credit memo after the debit memo (charge-back) is posted in the cash receipt. There exists an opportunity for our system to automatically perform the reapply procedure and save users the time involved in doing this themselves, which is the basis of this enhancement.  In this case, the user would enter the apply-to as the credit memo number. Since the credit memo in AR will have an apply-to of zero (open), the cash receipt process will assume that the apply-to does not exist. Hence, the user can enter the negative amount to create the charge-back.

Then, during the posting of the cash receipt, the application will attempt to look up the charge-back apply-to number in Invoice History. If the document is found in Invoice History and it is a credit memo, then the application will look up the credit memo in the AR Open Item file (by using the primary key of AR Open Item).  If it is found with an apply-to of zero (open) and it is not allocated, then the application will reapply that credit memo amount. This saves the user from needing to re-apply the credit memo.

 If the credit memo amount is greater than the debit memo amount, the application will only reapply the debit memo amount, and the balance will be left as an open credit. If the credit memo amount is less than or equal to the debit memo, then the application will reapply the entire credit memo amount.   

If the reapply occurs during Cash Receipts Posting, a note is printed on the journal similar to the following:

*** Note Credit Memo 510193 Was Automatically Applied To Debit Memo 005532     ***

If the credit memo amount does not match the debit memo amount, a warning is printed on the journal similar to the following:

*** Warning: Credit Memo and Debit Memo Amounts Do Not Match.                 ***



Since this feature is based on changes in Cash Receipt Posting, it will apply to both manual cash receipt and detail cash receipt CSV import. This feature is also related to the following KB article: https://support.netcellent.com/portal/en/kb/articles/feature-support-for-discount-amount-and-reference-in-cash-receipts-detail-interface


Programs Modified: ARCSHJNL
CLS

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