Create a service credit memo from a posted service invoice

A service invoice has been posted with the wrong hours or the wrong price, and the customer must have a credit memo. For sales and purchase documents you can copy a posted invoice into the credit memo. What applies to service credit memos? Here is what Microsoft Learn describes, what we have not been able to confirm, and how to get through it safely. It is a routine that should be easy to follow.

What Learn describes

The page Create service invoices or credit memos describes the service credit memo as a document you typically use when the customer returns an item. You can also use it to compensate the customer or to correct an invoice that was a mistake. The procedure is: open Service Credit Memos, create a new one, fill in the fields, and write the lines with the items that have been returned or the compensation the customer is to receive.

The posting date and document date are by default the work date. You can test the document with the test report and post several service credit memos at a time with a batch job.

Copy from a posted invoice

For sales and purchase documents there are the actions Copy Document and Get Posted Document Lines to Reverse. Learn describes them for sales and purchasing. For service credit memos we have not found the same description. We therefore cannot say that the service credit memo in standard can be filled in from a posted service invoice.

Check for yourselves whether your credit memo has a copy action, and try it on a copy of the data.

What to do when you write the lines yourselves

Open the posted service invoice and copy the lines to Excel, so that you have the customer, items, resources, quantities and prices.
Create the credit memo for the same customer, and write the lines with the same type, number, unit and posting groups.
Use the same dimensions as the invoice, so that the accounts are zeroed on the right parts.
Check the service order, contract and item entries afterwards, so that they match the invoice.
Run the test report, and then post.

Watch out with items and contracts

If there are items on the invoice, check whether they are to go back into stock, and at what cost. For sales and purchases, the copy and reversal functions make sure the cost is reversed exactly. With a hand-written credit memo, it is up to you to check the item entries.

If the invoice was created from a service contract, check how the contract is affected. Microsoft describes a special way of deleting contract invoices, and it cannot be used if the contract was changed after invoicing.

Documentation for the auditor

A hand-written credit memo is harder to check than a copy. Therefore keep a reference to the original invoice in the credit memo's description, and write the reason. Use a fixed wording, so that credit memos can be searched for later. For larger amounts, a colleague can check the lines against the invoice before posting. It takes a few minutes and prevents errors that would otherwise only be discovered when reconciling the customers.

Example

A service invoice has three lines: two hours, a spare part and travel. The customer is to be credited for the travel and one hour. The credit memo is created for the same customer with two lines, and quantities and prices are copied from the invoice. The dimensions and posting groups are set the same. After posting, you can reconcile the customer ledger entries so that the credit memo is applied against the invoice, and the customer only sees the amount to be paid.

The idea on our list

The idea of copying documents to service credit memos has 234 votes at Microsoft. At Addverk we collect ideas for small apps that could close gaps like this. They are ideas we are considering, not something you can download or buy today. The list of 30 ideas is on the Coming up page, and you can see which of them look like what you are missing yourselves.