Credit memo

Glossary

A credit memo records a credit adjustment that reduces an amount owed, helping teams keep resident ledgers and AP records accurate.

Definition

A credit memo is a record that applies a credit adjustment to a resident, customer, or vendor account. In multifamily operations, it can reduce an amount owed, offset a prior charge or invoice, or document a credit that will be applied to a future payment. It is different from a cash refund because it records a credit on the account rather than automatically sending money back.

Example

A resident is charged a full month of rent, but their move-in date changes and they are owed a prorated credit. The accounting team posts a credit memo to the resident ledger so the credit is visible and can be applied to the next rent payment.

Why It Matters?

Credit memos help operations leaders keep ledgers, move-out balances, and accounts payable records accurate. Clear handling of credit memos reduces manual corrections, prevents overpayment or underpayment, and helps teams confirm that charges, payments, fees, and credits are reflected correctly before key operational moments like move-in, move-out, or invoice processing.

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