A subsequent debit/credit exists when an additional invoice or credit memo is received for a transaction that has already been invoiced.
When you post an invoice or a credit memo as a subsequent debit/credit, you should note the following:
- The system records every subsequent debit/credit in the purchase order history.
- By posting a subsequent debit/credit, the system updates the ordering transaction on a value basis but not on a quantity basis. The quantity invoiced therefore does not change, but the total value invoiced does.
- The maximum quantity you can subsequently debit or credit is the quantity that has already been invoiced. It is not possible to post a subsequent debit before an invoice. The system does not check the quantity delivered. A subsequent debit/credit cannot be blocked due to quantity variance.
- If you are entering invoices or credit memos containing both standard items and subsequent debits/credits, you have the following options:
- If the invoice consists mainly of subsequent debit/credit items, you choose the transaction Subsequent debit and deselect the field Subsequent debit/credit for the items that are not subsequent debits.
- If the invoice consists mainly of standard items, you choose the transaction Invoice and select the field Subsequent debit/credit for the items that are subsequently debited.
- If you want the system to carry out a price check for a subsequent debit, it compares the value invoiced to date plus the value of the subsequent debit with the expected value based on the purchase order. The system takes tolerance limits into account when carrying out the price check. If a price variance exceeds one of the upper tolerance limits, the subsequent debit is blocked for payment.
The term credit memo always refers to a credit memo from the vendor. Therefore, posting a credit memo always leads to a debit posting on the vendor account.
As in the case of invoices, credit memos refer to purchase orders or goods receipts. They are used to correct the purchase order history if the quantity invoiced was too high, for example, if an invoice was too high or if part of the quantity was returned.
When you post a credit memo, the total quantity in the purchase order history is reduced by the credit memo quantity.
If you do not want the total quantity invoiced to be reduced, you must post the credit memo as a subsequent credit.
So the basic difference between these two is that in Credit Memo Quantity correction takes place where as in subsequent credit, quantity remains the same.
But each of these processes have their respective checks. Credit Memo becomes very helpful if you can not reverse the GR because you can not reverse the IR due the reason that it is already paid to the vendor. Products are not returned to the vendor through return PO and Credit Memo becomes a necessity.
If an invoice is reversed, the reversal document becomes a credit memo.