Definition

Credit memo: A sales document created on the basis of a customer complaint. This reduces receivables in Financial Accounting.

Debit memo: A sales document created on the basis of a customer complaint. This increases receivables in Financial Accounting.

Use

You may need to create credit memos for various reasons (for example, because of defective goods or because you have overcharged a customer). Similarly, you may need to create a debit memo, if, for example, you have not charged the customer enough.