Credit Memo Template

By | March 22, 2016

Business owners face an abundance of uncertainties on a daily basis. At one point in time, everything could be going swell, but an unexpected phone call could immediately flip things upside down. These individuals need to be well prepared to deal with these events, before they can arise. This is where a credit memo template could prove to be immensely beneficial. What precisely is a credit memo and how is it any different from a statement? You’ll be able to find out below!

Statements Vs. Credit Memos

First and foremost, it is vital to realize that statements and credit memos are not one in the same. Credit memos are actually invoices and are utilized to list products and services, which were purchasing in a singular transaction. A statement is actually a compilation of several different credit memos or invoices. Although they both can effectively show the customer how much they’re spending and have spent, the credit memo is helpful in some precise circumstances, which will be explored in greater detail below.

What Is A Credit Memo?

The credit memo, which is also referred to as a credit memorandum or note, is a commercial document that is primarily provided by the seller to the buyer of a transaction. The credit memo may be in the same value as the original invoice or it may be slightly lower depending on the specific scenario in question. At the same time, banks commonly utilize these documents, when making depositors aware of changes made to their balances.

What Does It Contain?

What needs to be provided on a credit memo truly depends on the scenario in question. A bank would obviously list different information than a retail establishment. Below, you will discover some of the precise details that may be found on this document.

  • A list of purchased goods and services, as well as prices for each
  • Date of transaction
  • Billing and shipping addresses
  • Payment terms
  • References to the buyer’s original invoice
  • Any issues, which brought about the need for the memo

Again, these details may or may not be provided. The specifics will depend on the seller or bank in question.

When To Use A Credit Memo

Now, it is time to learn about the innumerable uses of a credit memo. The business primarily sends out this document, when a mistake is made on their end. Below, you will discover some of the events, which call for the utilization of a credit memo template.

  • The customer was overbilled – If the customer is overbilled, the credit note will be delivered to reflect the changes and show that the customer received the appropriate refunded amount.
  • Insufficient Quantity – If the customer calls and complains about ordering 10 units, while only receiving 9, the business will use a credit memo to confirm and rectify the mistake. In this type of scenario, the business would confirm the shortfall of the single unit and would use the document to either confirm the shipment of another or the repayment of the cost.
  • Rejected Or Damaged Goods – In some cases, products can be damaged during shipping or they may be faulty. If this happens, the client may reject the item and have it resent to the dealer. In this case, the dealer would be wise to issue a credit memo to correct the change in their inventory, while also ensuring that the customer receives replacements or repayment for their losses.


All in all, there is truly an abundance of effective uses for the credit memo. Utilizing a template is wise and can help to ensure that all required information is provided to both sides of the transaction.


Credit Memo Template