Handling a Pay Request Credit

Question:

A vendor has issued us a credit. Is there a way to process a Credit Memo through a Spitfire Pay Request document? We are integrated with an accounting system.

Answer:

The short answer is yes. The longer answer on which steps you should take depends on why the vendor has issued a credit: A) Because you paid for something that you didn’t receive yet, so the vendor returned some money; B) Because a line item was discounted or no longer needed; or C) Because you were given a permanent deduction and no longer owe a certain amount on that subcontract. The instructions for each of these scenarios are as follows.

Scenario A:

If the credit is a temporary credit on one or more existing lines (for example, there was a mistake so you don’t really owe the full amount yet, but you will at a later time), follow these steps:

1. Create a new Pay Request as you do usually.
   1. Indicate a negative amount or quantity on the line or lines that get the credit.
      
   2. Approve and invoice the Pay Request as usual.

Scenario B:

If the credit is a permanent credit for one or more existing lines (for example, a particular item was discounted or no longer needed), follow these steps:

1. Create a new Pay Request as usual.
   1. Add negative amounts on the applicable line(s).
   2. Approve and invoice the Pay Request as usual.
2. Create a CCO for that Commitment
   1. Use the Get Existing option to get the lines that were credited.
      
   2. Put in the negative amount or quantity for each line.
      
   3. Approve the CCO as usual so that the Commitment will reflect the new totals.

Scenario C:

If the credit is a permanent credit overall or you don’t need to track it on each line (for example, you were given a discount on the total), follow these instructions:

1. Create a CCO for the Commitment.
   1. Use the “Add” icon to add a new Item and put in the full negative amount there.
      
   2. Approve the CCO as usual so that the Commitment will reflect the new totals.
2. Then, create the next Pay Request as usual.  You will see that the negative line is there with 100% already.
   1. Approve and invoice the Pay Request as usual.

Your Accounting System

In all of these scenarios, when you process/invoice the Pay Request, it will create the credit memo in your accounting system.