What is a debit memorandum?

Debit memorandum is an accounting tool that is used for several purposes. It serves as a vehicle for financial institutions such as banks, to inform their customers about changes in their balances as a result of an internally generated transaction that may not be included in more common fees for types that are increasing to the accounts of such customers. The equipment also uses companies as a means of remedying imbalances in fees previously issued for the transaction.

Sometimes companies make mistakes by charging their customers an amount that can be lower than the actual price for a service or product. If this happens, the company may decide to solve such an error using a debit memorandum. In this case, the Debit Memorandum will include only the difference between the amount charged and the actual amount that will be issued to the customer as an account. Society issuing such a debit memorandum has also failed to take somifactors that affect the price of the commodity when it issued the original invoice, so it is nto reflect and attribute the actual amount to the customer for the transfer of the payment.

Another Debit Memorandum request is a fee that is credited with an account holder's account in addition to the usual fees. For example, the bank could be a debit set of account holders as a repressive penalty for issuing referenced checks. In this case, the bank will issue a debit memorandum to the affected customer, informs him about the deductions, the nature of the deduction and the current balance of the deposit account. Sometimes the bank can issue a debit memorandum when you secure some money from your customer's account as a service fee for maintenance of your account.

At other times, the reason for the company's gpute could be due to the fact that this tool can be caused by an error by accountants. In this type of case, the accounting will replace the error using the Debit Memorandum. Usually such errors in reconciliation will overestimate the total account balance, noBO This can be caused by some errors in billing customers for services and goods that have increased the total balance.