Key takeaways
- A debit memo increases an amount owed or deducts from an account. Who issues it determines what it means.
- Banks issue debit memos for fees, returned cheques and corrections. They reduce your bank balance.
- Buyers issue vendor debit memos for returns, short shipments and pricing errors. They ask the supplier to credit the account.
- Sellers issue them to add a charge missing from an invoice.
Free PDF and Excel: Vendor debit memo template and tracker. Get it below
Three kinds of debit memo
A debit memo is a notice that debits an account: it reduces a bank balance, reduces what a buyer owes a supplier, or increases what a customer owes a seller.
In US accounting you will meet it three ways. A bank debit memo appears on your statement for a fee or a returned item. A buyer's debit memo goes to a supplier to record a return or short delivery, and the supplier answers with a credit memo. A seller's debit memo adds a charge the original invoice missed. The international equivalent of the seller and buyer forms is the debit note.
A manufacturer receives 90 of 100 ordered valves. The invoice is for 100. Accounts payable issues debit memo DM-0112 for 10 valves at 45.00, a total of 450.00, and sends it to the supplier.
The supplier checks its shipping record, agrees, and issues a credit memo for 450.00. AP applies the credit to the open invoice and pays 4,050.00.
Fields
| Field | What goes in it | Why it matters |
|---|---|---|
| Memo number and date | Sequential number and date. | Tracks open requests. |
| Vendor | Name and account number. | Matches the vendor master. |
| Reference | Invoice and PO numbers. | Links the claim to evidence. |
| Reason | Short shipment, damaged goods, price difference, duplicate billing. | Speeds acceptance. |
| Amount | Value claimed, with calculation. | Must reconcile to the PO and receipt. |
| Evidence | Receiving report, photos, price list. | Without it, claims are rejected. |
Free PDF and Excel
Vendor debit memo template and tracker
A debit memo layout for short shipments and returns, and a tracker that shows which are still awaiting a supplier credit.
- Debit memo layout
- Evidence checklist
- Open memo tracker
- Excel tracker with days outstanding
Typical accounting
| Who | Entry |
|---|---|
| Bank (on the customer's books) | Debit the expense, credit cash for the fee |
| Buyer, vendor debit memo | Debit accounts payable, credit inventory or expense |
| Seller, customer debit memo | Debit accounts receivable, credit revenue |
Mistakes
- Posting a bank debit memo as a supplier payment.
- Sending a debit memo with no evidence.
- Deducting the memo from payment before the supplier accepts it.
- Using debit memos to settle disputes that need a conversation first.
- Not tracking open memos until the supplier statement arrives.
- PO and invoice are referenced.
- Receiving evidence is attached.
- Amount is calculated and checked.
- Supplier is told the reason.
- The memo is tracked until a credit is received.
Last checked: 19 October 2026. General US accounting practice. Bank terms vary by institution.
Frequently asked questions
What is a debit memo in banking?
A notice from a bank that it has deducted an amount from your account, such as a fee or a returned cheque.
What is a vendor debit memo?
A buyer's notice to a supplier that the buyer is debiting the supplier account for a return, shortage or price difference.
Is a debit memo the same as a debit note?
They do the same job. Debit memo is the more common US name.
Can I deduct a debit memo from my payment?
Only if your terms allow it. Otherwise pay the invoice and ask the supplier for a credit memo.
What is the opposite of a debit memo?
A credit memo.