Dictionary / Debit Memorandum
What does Debit Memorandum mean in accounting?
Quick definition
Accounts payable & receivableA document, other than an invoice, showing the reason and authority for creating a debit. This term guides how bookkeepers record, classify, and explain related transactions in routine financial reporting.
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Examples
Bank service notice, not a bill
You run a letterpress shop. On February 12, your bank emails a debit memorandum for a $41 monthly service charge; it is not an invoice, and the bank already took the cash. In the QuickBooks Online or Xero bank feed, match that $41 withdrawal to Bank charges so the debit hits expense and checking drops. Do not enter a vendor bill to the bank, which would also raise accounts payable for a fee already pulled from cash. File the bank notice as the authority for the posting.
You write the memo for damaged stock
You run a stained-glass shop. You already entered a came supplier's October 7 bill for $1,680 of came and solder when three lengths arrive bent on October 9, a $96 short. The supplier has not mailed a credit memorandum, so you issue a debit memorandum to them for $96 and enter a vendor credit in QuickBooks Online, coded to inventory or job materials, so accounts payable drops $96. That paper is your authority to create the debit to the payable; do not send the supplier a customer invoice, and do not leave the full bill on AP. File the debit memo with the receiving report.
Why it matters
A debit memorandum is the notice, not an invoice, that states why a debit is allowed and who authorized it. You will not issue or receive one every close; bank and card-processor notices can land most months if you pay account fees or take cards, while a claim you send a supplier shows up only after a short or damaged shipment. The debit is the posting that follows; a credit memorandum is the opposite paper, the seller granting a credit. Treat the withdrawal as a new bill, skip the claim paper, or wait for a credit notice that never comes, and checking, accounts payable, or the P&L will not match what actually moved; file the notice, then post the debit it authorizes.
Further reading
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What is Debit Memorandum in bookkeeping?
A document, other than an invoice, showing the reason and authority for creating a debit.
When should I use Debit Memorandum?
Use Debit Memorandum when the transaction facts match its definition and you need the ledger and financial statements to reflect the correct account and period.
What is a common mistake with Debit Memorandum?
Debit Memorandum is used for debit memorandum entries, while Daybook covers a related but distinct bookkeeping purpose. Review both terms before posting unusual transactions. A common mistake is applying it by label only instead of checking the underlying transaction details.