Overview
Credit Memos settle disputes between a buyer and a seller, such as services not received or price changes.
Credit Memos
Credit memos are issued to customers as a way to reduce the amount owed on an invoice or cancel future charges. There are three main types of credit memos: invoice-based credit memos, which are applied directly to line items on a specific invoice; general credit memos, which are applied to plan instances; and cancellation credit memos, which cancel future charges for a service.
Types of Credit Memos
There are 4 types of credit memos in Aria:
- Invoice-Based: An Invoice-based credit memo is applied to line items of a specified, qualifying invoice. A credit can be applied, up to the total of the line item. Note that you cannot create an invoice-based credit memo on an invoice with usage that is taxed per-record.
- General: A General credit memo can be issued as a token of good will. In contrast to an invoice-based credit memo, this is an on-account credit memo, and is not associated with an invoice.
- Cancellation: A Cancellation credit memo can be issued to credit a customer for the difference in time for which a service was paid for and when it was cancelled. In contrast to an invoice-based credit memo, this is an on-account credit memo, and is not associated with an invoice.
- Price Change: A Price Change credit memo can be issued to credit the difference between the amount that a customer paid for a service at the original price, and the new price of the item, based on the effective date of the new pricing. In contrast to an invoice-based credit memo, this is an on-account credit memo, and is not associated with an invoice.
The credits resulting from a credit memo application have an immediate impact on the account’s balance; and the account holder receives an email notification in the format of a credit memo.
You can create a credit memo either via the Aria UI or the API create_cm_m.
Credit Memo Templates
To send credit memo notification emails to customers, you must work with your Aria Implementation team. After you agree on the content of the credit memo notifications with the Aria Implementation team, the Aria Support team develops the template and makes it available in your Aria instance. You can have one or more credit memo templates to support various use cases such as the branding of multiple products or localization.
Credit Memos are also available in a standardized XML format for utilization by your chosen document partner, and Aria includes credit memo information (along with statement information) in XML Master Files.
Credit Memo APIs
- get_invoice_cm_details_m—Retrieves credit memo information related to a specified invoice
- create_cm_m—Creates a credit memo to adjust the line item charges on the specified invoice
- apply_cm_m—Applies credit memo line credits to invoice gross line amounts
- unapply_cm_m—Unapplies credit memo line credits from a specified invoice gross line
- update_cm_m—Saves additional or modified details in the specified credit memo
- get_cm_details_m—Returns information about the specified credit memo
- get_cm_list_m—Returns information on all credit memos associated to an account
Notes:
- Credit Memos in Aria are not the same as Credit Notes in Aria.
Credit Notes in Aria exist to comply with EU laws to track VAT tax deltas for invoices that have been voided and result in a customer credit. In this scenario, Aria customers receive a statement-like notification of a credit. Aria retains a numbering system for statements and credit notes as an accounting best practice to comply with these EU laws. - You cannot create an invoice-based credit memo on an invoice with usage that is taxed per-record.
Learn More
- Credit Memo Numbering
- The article outlines how Credit Memos in Aria can be customized with a numbering sequence through backend configuration by Aria Customer Support, defining a custom string and starting number, and UI settings that allow users to specify whether the string is a prefix or suffix, the sequence length with zero-padding, and the sequence source.
- Invoice-Based Credit Memos
- Invoice-based credit memos allow for precise application of credits to specific line items within qualifying invoices, overriding existing payments and credits up to the line item's total.