What is a debit memo?

Billing customers isn’t always a smooth process, and things can change after the job is complete. Learn how to use a debit memo to adjust invoices after they’re sent.

Invoice too low? Use a debit memo.

Imagine you write an invoice and send it to a customer, only to realize that you forgot to include a few materials or hours of labor. Now the invoice is wrong, and you need to request more money. You can’t just send another invoice, so what do you do? Plain and simple — send a debit memo.

Debit memos, also called debit notes, are corrections to invoices. If you accidentally submit an invoice that’s too low, you can send a debit memo to correct it and increase the invoice after it’s sent. The customer can then use the memo to adjust their books, as well.

What is a force pay debit memo?

A “force pay” is a specific class of transactions that financial institutions use to enforce payment before an account is debited. This type of debit memo meaning is a code in the accounting system that forces a purchase to clear before any further steps can be taken.

A popular example of this debit memorandum is found at local gas stations or fast food chains. For a Force Pay memo debit fund authorization, customers are expected to pay and ensure that the debit memo goes through before any goods or services are released.

This helps businesses ensure that they are paid fairly, reducing possibilities for fraud or theft.

When to use a debit memo.

You can use a debit memo any time you need to increase the amount on an invoice that’s already been sent. Here are just a few reasons why you might need one:

• Customer charged upfront, but the project ended up costing more than anticipated
• Billing mistakes
• Increases in material or labor costs
• Project changes that incurred more costs

Many businesses require authorization to send or accept debit memos. After all, you’re asking for more money. To make the process easier, use an e-signature software like Adobe Acrobat Sign. That way, everyone involved can sign memos electronically, without needing to deal with printers, scanners, and fax machines.

Learn more about how Acrobat Sign can help you simplify sending and receiving invoices and debit memos.