Credit memos, subsequent debits and credits, and reversals

After the original invoice, suppliers keep sending paper: credit notes for returned goods, extra charges for freight that was forgotten, price corrections after a negotiation. SAP S/4HANA offers four transaction types in MIRO and Create Supplier Invoice: invoice, credit memo, subsequent debit and subsequent credit. Choosing the right one decides whether the PO's invoiced quantity changes, and that decides GR/IR.

Quantity or value?

The test is simple. Does the document change the quantity that has been invoiced, or only the value? A credit memo reduces the invoiced quantity and value; it is the mirror image of an invoice. A subsequent debit or credit changes only the value; the invoiced quantity stays the same, and the amount is spread over the quantity already invoiced.

Credit memos and returns

In course sap-mm-203, inspection rejected 30 rotors and the warehouse posted a return delivery (movement type 122). That reduced stock and the received quantity, and GR/IR now shows that Contoso was invoiced for 30 more than it kept. Lakeside sends credit note LC-C-1907 for $1,260. AP posts it as a credit memo against PO 4500000123 for 30 units. The invoiced quantity drops from 500 to 470, matching the 470 received, and GR/IR for the item is balanced again.

If the credit is for a reason that does not involve quantity, a credit memo is wrong. Posting a $250 price correction as a credit memo for, say, 6 units would reduce the invoiced quantity below the received quantity, so the PO would expect another invoice for 6 rotors that will never come, and GR/IR would show a phantom balance.

Subsequent debits and credits

A subsequent debit or credit applies to items already invoiced. SAP proposes the invoiced quantity, and you enter only the amount. With a standard-price material like the rotor, the amount posts to price difference. With a moving average price, it is posted to stock as far as the quantity is still in stock. Contoso's buyers negotiate retroactive price reductions with Lakeside each quarter, so subsequent credits are routine.

Reversing an invoice

If the invoice itself was entered wrongly (wrong PO, wrong amount, wrong supplier), it should be cancelled with MR8M (Cancel Invoice Document), not neutralized with a credit memo. The reversal creates a document that references the original, reverses the journal entry and restores the PO's open quantity. A reversed invoice cannot be reversed again, and an invoice that has already been paid needs the payment reversed or handled in finance first. Remember that reversed invoices still exist in the system; a corrected invoice with the same reference can trigger the duplicate check.