However, credit notes are typically commercial documents used between businesses. For example, a vendor would issue a credit note to a customer to document the reason for and amount of credit. The buyer can then use that credit memo to update their accounting books to reflect the reduction in liability to pay the seller and a decrease in expenses. For returned items, the buyer updates their purchase return account, whereas the seller updates their sales return account to show the decrease in revenue.
There are several reasons that a seller might issue a credit note. If a buyer receives damaged or deficient goods, a credit may be issued for future purchases and to document the return of the goods. A credit note may also be used when a buyer is purchasing services rather than goods if the service does not meet customer expectations.
A memo is typically thought of as a written document, in a letter format, used for business communications. While a credit memo or note can be written in paragraph form, it is often formatted like an invoice. Regardless of the layout of a credit note, the following information is generally included:. A credit note may also reference the original invoice and include a separate serial number for record-keeping.
Similar to invoices and receipts, credit memos also tend to include details like customer contact information and ID numbers. A debit memo , also called a debit note , is used to document and update accounting records and signifies an amount owed.
A buyer may send a debit memo to a seller in order to request a credit memo for goods that will be returned.
In business-to-business B2B transactions, goods are often purchased on credit, which means that the buyer receives products from the supplier before making a payment.
These transactions are accounted for by adding and subtracting credits and debits until an invoice is sent for the actual payment owed. In this sense, debit and credit notes are part of the record-keeping process for tracking shipments and payments. Sellers can also issue debit notes to request additional payment if a buyer was mistakenly undercharged on a previous invoice.
They can also be used to remind a buyer of debt obligations if they still owe an outstanding amount. Some businesses use debit memos as shipping receipts to show what goods the buyer is receiving.
Again, this is not an invoice, even if the memo shows the amount that the buyer will be billed. In some cases, debit notes are also used to indicate commission or interest owed. The memo provides a way of documenting B2B transactions that are outside of the normal revenue stream — for instance, between a parent company and a subsidiary, or a third-party business that has been commissioned by another company to provide services to a client.
Depending on how a debit note is being used, it may be written like a memo, a receipt, or even a simple postcard reminding you about debts owed. If a buyer is submitting the debit note for returned goods, it may show the anticipated credit amount along with the reason for the return and a list of returned items. Debit notes for invoice corrections or payment reminders typically include information about the upcoming invoice or amounts currently due.
Debit notes also generally include a date for the note, tracking numbers, contact info, and approval signatures. Unlike credit notes, which show negative amounts, debit notes show positive amounts to indicate money owed. Not all companies use credit or debit notes, but if one business requires it to meet internal regulations, they can request that the company send the necessary info for their records. Businesses can choose from software tools or templates to manage credit and debit memos, depending on the size and scope of their operations.
A debit memo may look like an invoice, but the two are distinct. It takes about three weeks to get your credit reports in these formats. If you are deaf or hard of hearing, access the AnnualCreditReport.
If you are visually impaired, you can ask for your free annual credit reports in Braille, large print, or audio formats. You can order free reports at the same time, or you can stagger your requests throughout the year.
Some financial advisors say staggering your requests during a month period may be a good way to keep an eye on the accuracy and completeness of the information in your reports. Because each credit bureau gets its information from different sources, the information in your report from one credit bureau may not reflect all, or the same, information in your reports from the other two credit bureaus.
But before you buy, always check to see if you can get a copy for free from AnnualCreditReport. To buy a copy of your report, contact the national credit bureaus:. Federal law says who can get your credit report. A current or prospective employer can get a copy of your credit report — but only if you agree to it in writing.
These sites pretend to be associated with AnnualCreditReport. If you visit one of these imposter sites, you might wind up on other sites that want to sell you something or collect — and then sell or misuse — your personal information. If you get an email, see a pop-up ad, or get a phone call from someone claiming to be from AnnualCreditReport.
Report Scams. If you see a scam, fraud, or bad business practices, tell the FTC. Go to ReportFraud. Federal Trade Commission Consumer Information. Search form Search. Free Credit Reports. One option on our list even walks you through how to choose a debt-payoff method by comparing the snowball method to the avalanche method and other strategies.
With a template, you get a ready-made spreadsheet with the right formulas to do all of the calculating for you. All you need to do is download the template and plug in a few numbers—the spreadsheet will do all the math. Some of the options listed also present schemes for dealing with your loans, a multiple credit card payoff calculator, and recommendations for paying down other debt.
This spreadsheet includes additional information about those strategies with more resources for reducing debt. After you enter your information, select the different methods to see how each would work for paying off your debt. This spreadsheet includes a printable payment schedule for easy reference. Need help repairing your credit? Download the Credit Repair Edition of the debt reduction spreadsheet to first pay down each credit card to specific levels determined by your FICO score.
Once that goal is reached, the spreadsheet shows you how to start paying off all credit card balances. Start by entering your creditors, current balance, interest rates, and monthly payments to see your current total debt, average interest rate, and average monthly interest paid. The spreadsheet will also show you the total number of monthly payments on your debt accounts. You will need to have an idea of how much money you will set aside each month toward paying off credit cards and other debt to activate the debt snowball features of the spreadsheet.
Simply enter the amount you have planned for paying down the debt, and the spreadsheet will tell you what portion of that amount should be applied to the bill with the highest interest rate. DebtTracker is not quite as elegant as the other spreadsheets on this list, but it has great features to sort and view your debt that are definitely useful.
The worksheets come populated with some data so you can see how they work, and the download page includes a tutorial. You will need to enable macros in Excel to use the DebtTracker spreadsheet, which is also explained in the tutorial. Enter all of your debts, including multiple credit cards, mortgage, and various types of loans, into the spreadsheet to start. Then you can change the view by sorting debts by type, interest rate, minimum payment , and other options.
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