ProLaw^® Credit Memo Confusion? Here's How to Handle Vendor Refunds

Have you ever received a credit from a vendor and felt a little lost trying to record it in ProLaw^®? The process can be a bit confusing, especially since a "credit memo" from the vendor actually results in a debit entry in your firm's check journal. This is because the money is coming back into your firm, effectively reducing your payables.

The Debit Check Entry Method

This is the most common and straightforward approach, assuming the vendor is giving your firm a credit on a future invoice.

1. Access the Quick Find in Journals: Make sure the type is set to Checks.
2. Make the Debit Column Visible: You'll need to make sure the Debit column is visible so you can enter the credit amount.
3. Create the Check Entry: Add a new check entry for the vendor. Post the refund amount as a debit.
4. Handle the Offsetting Account: Credit the appropriate account to balance the entry.
   • To Credit the Client: Credit the client hard costs advanced account.
   • To Credit the Firm: Credit a firm expense account that doesn't require an attached transaction.

When you print the next check for this vendor, ProLaw^® will automatically reduce the total amount by this credit memo.

What If the Vendor Sends a Paper Check?

Option 1: Record It as a Debit Check — You can still use the debit check method. Assign a check number to the entry. Note that this will affect your bank reconciliation; the debit check will clear as a check, not a deposit.

Option 2: Enter It as Unapplied Cash — If your firm prefers to avoid the reconciliation complexities of a debit check, enter the vendor check as unapplied cash. This allows you to give the credit back to the client matter without the bank reconciliation issue.