A debit note or debit memorandum (or debit memo) is a commercial

document A document is a writing, written, drawing, drawn, presented, or memorialized representation of thought, often the manifestation of nonfiction, non-fictional, as well as fictional, content. The word originates from the Latin ', which denotes ...

, common in business to business (B2B) transactions, that either buyers or sellers may use regarding the amount due for a sale of goods or services. Debit note acts as the

Source document A source document is a document in which data collected for a clinical trial is first recorded. This data is usually later entered in the case report form. The International Conference on Harmonisation of Technical Requirements for Registration ...

to the Purchase returns journal. In other words it is an evidence for the occurrence of a reduction in expenses. The

seller Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. A period during which goods are sold for a reduced price may also be referred ...

might also issue a debit note instead of an

invoice An invoice, bill, tab, or bill of costs is a commercial document that includes an itemized list of goods or services furnished by a seller to a buyer relating to a sale transaction, that usually specifies the price and terms of sale, quanti ...

in order to adjust upwards the amount of an

already issued (as if the invoice is recorded in wrong value). Debit notes are generally used in business-to-business transactions. Such transactions often involve an extension of

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...

, meaning that a vendor would send a shipment of goods to a company before the goods have been paid for. Although real goods are changing hands, until an actual

is issued, real

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are: m ...

is not. Rather,

debits and credits Debits and credits in double-entry bookkeeping are entries made in account ledgers to record changes in value resulting from business transactions. A debit entry in an account represents a transfer of value ''to'' that account, and a cred ...

are being logged in an accounting system to keep track of inventories shipped and payment. When a price is included on a debit note, it is the price which the customer was actually charged for those goods.

References

{{Reflist Accounting source documents Debt