Purpose
Aspire allows you to create credit memos that represent credits your company wishes to provide to your customers.
Requirements
✅ Add Credit Memo must be added to your user role. When assigned you can initiate creation of credit memos from the Quick Menu, to a Division, to an Expense, or to an Invoice.
Places to Create Credit Memos
You are able to create Credit Memos following locations:
By clicking on a line item that has a payment type of Credit Memo on the Payments Search List screen
Choosing the New Credit Memo option available in the Quick Menu.
New Credit Memo option is available by hovering over the New icon on the Payments screen in Invoicing.
From the Invoice details screen, select the Add Credit Memo option in the Actions menu, and fill out the Select Info for New Credit Memo screen, and save.
When creating a new credit memo using options 2 or 3, above, before Aspire displays the Credit Memo screen, it shows the Select Payment Account screen as shown at right. This allows you to set who is responsible for payments on the account – either a company or a contact – allowing Aspire to narrow down or fill in the billing contact on the Credit Memo screen and to display the list of invoices for which the company or contact has billing responsibility.
Creating a Credit Memo
Select the Quick Menu icon in the blue side menu and then choose New Credit Memo from the option list.
A dialog window will appear and prompt you to enter a company or contact to whom the credit will apply. Select the company, or contact, and click Apply.
To determine whether to choose a company or a contact, consider who has long term responsibility for payment on the account.
Consider the following:
For property owners (especially residential) if it is your practice to set up companies in Aspire associated with residential properties, select the appropriate residential company.
If you do not set up companies in Aspire for residential properties, then specify the individual contact.
If the financial contact works for a larger company (like a commercial company) then it is recommended to tie the credit memo to a company, because the contact may leave the company and someone else might take their place.
You are then taken to the Payments tab, in the Invoicing module to finish Credit Memo creation.
📌 If you choose to not use the quick menu, you can access the Payments tab by navigating directly to the Payments tab in the Invoicing module.
The Credit Memo screen will be displayed.
Understanding the Credit Memo Fields
Here’s a table to help you understand the fields you can use on the Credit Memo screen! Required fields are denoted with an asterisk:
Screen Element | Description |
|---|---|
Billing Contact* | The billing contact is responsible for determining the eventual application of the credit memo. |
Billing Company | The company associated with the billing contact. |
Credit Date* | The date on which the credit should be applied to the account. |
Branch* | Your company's branch with which the credit memo is associated. |
Billing Address Line 1 and Line 2 | Billing address information associated with the customer’s responsible billing party. Aspire automatically fills these fields with the address of the selected billing contact. You can change these values. |
Billing City | |
Billing State/Zip* | |
Credit as Expense Checkbox | Read the sections on this checkbox! |
Property/Opportunity* | Allows you to choose the property or opportunity to which the credit will be applied. This field requires a value. |
Division or Expense* | This field changes depending on whether the Credit as Expense checkbox is checked. If the Credit as Expense checkbox is not checked, the field accepts the company division to which the credit should be applied. If the Credit as Expense checkbox is checked the field label changes to Expense and allows you to select a payment category as defined on the Admin List Payment Category screen. |
Tax Jurisdiction | When credit memos are initially created, Aspire automatically ties them to a tax jurisdiction based on the associated opportunity or property – if the tax jurisdiction on the opportunity overrides that of the property, the opportunity tax jurisdiction takes precedence. This field allows you to change the tax jurisdiction for the credit memo after it has been created. |
Sale Amount | Allows you to enter the amount of the sale that should be credited to the customer excluding any sales tax. Keeping the sale amount separate from sales tax allows accurate month-end financial reporting. |
Taxable Amount | Allows you to enter the portion of the Sale Amount that was taxable. Supports accurate month-end reporting. |
Tax Amount | Allows you to enter the sales tax amount that should be credited to the customer. The default value of the tax amount field is automatically calculated based on the tax jurisdiction of the selected property and the value entered for the Taxable Amount field. You can overwrite the calculated value but Aspire prevents them from changing the value by more than 5% of the calculated value. The value saved in this field affects the sales tax amounts reflected on the Revenue tab of the End of Month Report. Keeping the sales tax separate from the sale amount allows accurate month-end financial reporting. |
Total Amount | The sum of the sale amount and tax amount is automatically calculated by Aspire. The default value is automatically calculated and populated into this field based on the tax jurisdiction of the selected property and the value entered for the Taxable Amount field |
Invoice Section | This section displays allocations of the credit to invoices. You can allocate the credit to invoices on the Payment screen. |
Notes | Allows you to record an internal note. For example, to explain the reason for the credit. |
More Actions Menu | This menu has two options:
|
Deciding When to Use the Credit as Expense Checkbox
There are two types of credit memos you can apply. Options when making your credit memo differ when the Credit as Expense checkbox is checked or left unchecked.
The following list describes situations in which you might want to use the Credit as Expense checkbox:
If you want to show a trade with the customer for advertising expenses when you do not want the debit to revenue, but rather to your advertising expense account.
If you want to show accounts receivable credits from a prior system (you could record the credit to display something like Credit Memo - A/R Old System)
If you need discounts to show on the profit and loss separately.
If you want to provide damage discounts to your customers.
📌 Note: When you check the Credit as Expense box, the field in the Credit Amount section changes from Division to accept an Expense Payment Category.
🧠 Options available in the drop-down for the Expense field are set up in Administration ▶️ Lists ▶️Payment Categories.
You can create your own categories here, but some common examples might include Bad Debt, Barter, Balance A/R or Advertising.
You can select New to create your own Payment Category if necessary.
The Payment Category detail screen appears for you to enter in the following information:
Enter the Payment Category Name.
Choose the Sort Order of the category, which organizes the payment categories by numerical order.
Add the Account Number. This is an optional note field that if entered, is visible on the End of Month export.
When you add the Account Number in this field, this can assist you when you are making your EOM Journal Entry.
It can help tell you where to code the entry so you do not have to look up the Account Number every time!
After your Payment Category has been saved, when creating Credit Memos and using the Credit as Expense check box the new categories will be included in your list of options!
Checked: Creating a Credit Memo as an Expense
If the box is checked, the Credit Memo is applied as an expense. This option allows you to separate the credit from your divisions on the End of Month Report.
Check the Credit as Expense checkbox.
Set the Billing Contact.
The Billing Address fields will fill in automatically if the billing contact has an address in their contact record.
Select the Credit Date from the calendar picker.
Enter the branch in the Branch drop down.
Select the Property/Opportunity to which the credit memo should be applied.
Select the expense type that applies to the credit.
Enter the sale amount to be credited.
If applicable, enter the tax amount to be credited. This is for the Tax Entity Report which shows the gross amount to be credited from taxable sales.
If applicable, enter the taxable amount on which the tax amount is based. The taxable amount may be different from the sales amount.
You should only specify the portion of the sale amount that is subject to sales tax.
Enter any notes you want recorded on the credit memo.
Click Save.
Unchecked: Creating a Credit Memo to a Division
If the box is unchecked, the Credit Memo is applied as revenue to one of your company divisions (like Maintenance, Enhancement, Irrigation, etc.)
Make sure the Credit as Expense checkbox remains unchecked.
Set the Billing Contact.
The Billing Address fields will fill in automatically if the billing contact has an address in their contact record.
Select the Credit Date from the calendar picker.
Enter the branch in the Branch drop down.
Select the Property/Opportunity to which the credit memo should be applied.
The Division field will automatically be selected for the chosen opportunity. You can choose a division if you need to make changes to this field.
Enter the sale amount to be credited.
Enter the tax amount to be credited. This is optional and for the Tax Entity Report which shows the gross amount to be credited from taxable sales.
If applicable, enter the taxable amount on which the tax amount is based. The taxable amount may be different from the sales amount.
You should only specify the portion of the sale amount that is subject to sales tax.
Enter any notes you want recorded on the credit memo.
Click Save.
Now that your Credit Memo has been added to Aspire, you can use it in the future or immediately apply it to an invoice!
Applying a Credit Memo to an Invoice
A credit memo can be applied to an invoice from the Payment screen when applying other payments.
An example of when to apply a credit memo would be: Work has been done for your customer. An invoice was disputed and you have agreed to provide a credit to the disputed invoice. You have created the credit memo and want to apply it to the invoice so your customer remains happy and that the credit memo amount is removed from their invoice before they make their payment.
To apply the credit, select New Payment from the Quick Menu.
The Select Payment Account screen appears.
Select the company and then click Apply.
Aspire then displays the Payment screen.
Enter the following information:
Regarding- Select the relevant Property or Opportunity to help you search for outstanding invoices if not displayed below in the Invoices section of the Payment screen.
Branch – Since you are applying the credit memo to a specific invoice, you do not need to specify the branch.
In cases where specific invoice was not yet available (like if a client wanted to make a down-payment) this field allows you to tie the payment to your appropriate branch.
Payment Method – Specify Check.
Payment Date – Enter the date you want the Credit Memo applied to the invoice.
Reference Number – Commonly used to enter the check number for checks, enter your desired reference in this field to help you identify the credit memo application.
Payments Section
Payment – Since you are applying a credit and not a payment, leave the payment amount zero ($0).
Invoices Checkbox – Since you are applying the credit to an invoice, check the checkbox in front of the invoice that you want to receive the credit memo.
⚠️ When this checkbox is selected, Aspire automatically zeros out Payment field, since you are applying the amount of a credit memo and not a payment.
Credits Section
Credits Checkbox – Since you are going to apply the credit memo to the invoice, select the checkbox next to the credit memo you want to apply.
If there were multiple open credit memos for the company making the payment, they would be displayed in this section.
Payment – Enter the amount from the credit memo being applied to the invoice.
Credit Amount Column – This amount represents the total amount the credit memo can allocate to an invoice. If you save the payment, Aspire will keep track of that credit if you choose not to use the full amount and allow you to apply it to another invoice at a later time.
In the payment summary column, once you have assigned the credit memo amount to your invoice, the payment total should reflect zero. You can Save to finish the application of the Credit Memo to the Invoice. Then, when your customer reviews the invoice, the credit memo is recorded and they would only have to pay the difference!
Credit Memo Video
In the below video, we will be talking about creating and applying credit memos.
Sections
0:00 Intro
0:25 What Are Credit Memos?
1:20 Creating a Credit Memo
4:07 Using Credit as Expense
5:16 Creating Credit Memos Without an Invoice
6:54 Review