A/R Finance & Factoring Terms GLossary

A Credit Memo, in terms of goods or services, is issued by a seller in order to reduce the amount that a customer owes from an earlier sales invoice. A credit memo may be issued based on a buyer returning goods, taking an allowance, a price dispute, or other reasons where the buyer is no longer obligated to pay the full original amount of the Invoice. Credit memos should always be disclosed to your factoring company immediately.