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When your customer makes a payment to your company and includes in their payment a credit memo that you issued to them, make sure that the original invoice that the credit memo refers to has been paid first. If it has not, contact the customer’s AP department immediately. Ask them if they have the invoice which the credit memo referred to and if not forward it to them. Ask the customer if they will have it paid as soon as possible since they have taken the credit first.
Nearly all companies instruct their AP personnel to note available credits issued by customers and take all of them that are received in the daily mail, email or those reflected as remaining on the vendors’ incoming statements. These AP clerks normally do not wait the same 45 days to take the credit memos like they wait 45 days to pay their invoices. Since they take credits more quickly, they theoretically could get a credit, take it in a payment to the vendor and still have the original invoice outstanding on their AP aging.
