Revenue, walking backwards
Nobody budgets for credit memos, and every one is a small confession: the bill was wrong or the delivery was. May confessed five times for 84,300.00, three pricing and two service, and the trend of those reasons is worth more than the total.
◆ May, the creditsfive memos, two reasons, 84,300.00.
| Reason | Memos |
|---|---|
| Pricing or billing error | 3 |
| Service credit, delivery issue | 2 |
| Credit memos, May, totalling 84,300.00 | 5 |
Every memo points at its original invoice on the billing fact, so the credit rate by customer and by reason is a standing query. Three billing errors in one month is the invoice process asking for the same rule-based checking the payables side already runs. Sample values are illustrative, never client data.
◆ The owned answercredits as negative lines with lineage.
Credit memos land as negative invoice lines with reason codes and original-invoice keys on the customer star. The monthly partition, the by-customer rate, and the reason trend all come off that lineage, and the roll-forward absorbs them without a side ledger.
- AR
- Accounts receivable, the money customers owe.
- credit memo
- A negative invoice: revenue given back, with a reason.
- reason code
- Pricing error or service credit; the diagnosis field.
- lineage
- The credit’s pointer to its original invoice.
- credit rate
- Credits over billing, by customer or reason, trended.