Oracle AP and Purchasing : Debit Memo


I seen “Debit Memo” is one of the generic word which get confused many a time by developer and functional people as well. here trying to make it simpler.

What is a Debit Memo Invoice?

A: Negative amount invoice which is created and sent to a supplier to notify the Supplier of a credit you are recording.

When should a Debit Memo be created?

A: To correct over billing errors, we create a Debit Memo by doing a Return To Supplier transaction for the extra quantity that got invoiced.

How does Create Debit Memo from RTS Functionality Work?

A: Steps to Create a Debit Memo via RTS:
1. Create a PO with supplier and supplier site.
2. Receive the goods using Enter Receipts Form.
3. Create an Invoice. If Pay on Receipt is used to create then Invoice then set “Pay on” as Receipt and “Invoice Summary Level” as Receipt in Supplier sites window under purchasing tab.
4. Do a Return To Supplier (RTS) transaction for some of the goods using Returns form.
5. Make sure the check Box ‘Create Debit Memo’ is checked in the Return line while doing the RTS transaction.
6. This will automatically create a Debit Memo invoice in AP.

Depending on how the RCV: Processing Mode Profile option, Receiving Transaction Processor will be kicked off as soon as Receipt/Return transaction is saved.
If profile option RCV: Processing Mode = Batch, then user has to go and manually launch Receiving Transaction Processor concurrent request.
If profile option RCV: Processing Mode = Immediate, then Receiving Transaction Processor concurrent request will be launched and runs in the background. In this case control comes back to user and he can do his operations.
If profile option RCV: Processing Mode = Online, then Receiving Transaction Processor concurrent request will be launched. In this case control will not come back to user until processor completes processing.

 What setup is required to create a Debit Memo?

A: Navigate: Supply Base -> Suppliers -> Query on supplier -> Sites -> Query on site -> Purchasing tab -> Check the box for Create Debit Memo from RTS Transaction. Make sure the check Box ‘Create Debit Memo’ is checked in the Return line while doing the RTS Transaction.

Under what Conditions a Debit Memo can be created?

A: Automatic Debit Memo will be created only when billed quantity of Purchase Order is greater than or equal to Returned Quantity. Return To Supplier reduces the PO billed quantity by the returned quantity but in any case PO billed quantity will never go below zero.

About these ads

2 responses to “Oracle AP and Purchasing : Debit Memo

  1. hi thanks for the above information…
    How to create Invoice automatically in payables without receiving the material after approving the purchase order?

    • This can be done through a custom program which will populate the details from a PO into interface table and then seeded Import program can be used to import the invoices into AP base tables.

      Additionally, in PO make sure to have the PO close tolaerance for such POs to be set to 100 % so that once the invoice is created/validated in AP the PO status will automatically be rolled up as “Approved, Closed”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s