Debit Memos

IAR Reconciliation will add debit memos to GlobalWare when you run the discrepancy report and select the option to create memos.

If a debit memo is not in the BOS file, you can add it manually on the Invoice screen.  If you do, add the debit memo to the original invoice, using the current date as the invoice date. Adding the debit to the original invoice ensures the debit memo invoice item contains all the original data. Using the current date ensures the current ARC report includes the debit memo. The ARC Report automatically puts all debit memos on the cash sales tape regardless of the form of payment in the invoice item.

The document type controls the type of debit memo to process. There are two different types of debit memos that you might receive from an airline or other provider: DCM (Commission Adjustment) and DAR (Accounts Receivable Adjustment).

DCM (Commission Adjustment)

A DCM (commission adjustment) is the most common type of debit memo. The agency either took too much commission (or ARC made a mistake) or the airline refunded the ticket to the traveler without the knowledge of the agency. For DCMs, the form of payment must be Plastic in order for the adjustment to not affect the client's accounts receivable items. The commission amount in the Invoice Item Cost area of the Invoice screen must be specified as a negative amount. If the debit memo is for a refund by the airline and you want to print this fact on the Corporate Report to the client, you also should specify the fare amounts and comments in the Savings Comment field. If you do not want the debit memo to appear on the account’s corporate report, change the Report To ID to something else (for example, AGENCY) and only specify the negative commission on the amount line in the commission field.

DAR (Accounts Receivable Adjustment)

A DAR (accounts receivable adjustment) is another type of debit memo. Examples of when a provider might issue a DAR:

• Booking violation penalties – A debit memo is issued because a booking violation occurred.
• Fare adjustments – A debit memo is issued because an agent billed a customer for a fare that expired, and the airline charged the agency the new fare's additional amount . In this situation, the agent should have charged the customer the new fare (not the expired fare).

For DARs, the form of payment must be Cash. The amounts in the Invoice Item Cost area of the Invoice screen must be specified as positive amounts. You can enter the total cost, including tax, of the debit in the Base field. Or, you can break down the amounts and place the base amount in the Base field and the tax amounts in the tax fields. Either way, GlobalWare calculates the total amount. Rarely, if ever, should there be a commission on this type of debit memo. If you want to collect this amount from the client, it is automatically an accounts receivable item. If you want the agency to absorb the cost of this debit memo as an "Agent Error," you should make a minus adjustment in Adjust Accounts. A minus adjustment decreases accounts receivable. Offset this to the general ledger account for Agent Errors. (For more information about adjusting invoices and accounts, see Adjust Accounts Overview.)