ProLaw Credit Memo Confusion? Here’s How to Handle Vendor Refunds

Have you ever received a credit from a vendor and felt a little lost trying to record it in ProLaw? The process can be a bit confusing, especially since a “credit memo” from the vendor actually results in a debit entry in your firm’s check journal. This is because the money is coming back into your firm, effectively reducing your payables.

Let’s break down the process step-by-step.

The Debit Check Entry Method

This is the most common and straightforward approach, assuming the vendor is giving your firm a credit on a future invoice rather than sending a separate check.

1. Access the Quick Find in Journals: In the Journals module, make sure the type is set to Checks.
2. Make the Debit Column Visible: By default, the debit column may be hidden, as most checks post a credit to the checking account. You’ll need to make sure the Debit column is visible so you can enter the credit amount.
3. Create the Check Entry: Add a new check entry for the vendor. Instead of entering the amount as a credit, post the refund amount as a debit.
4. Handle the Offsetting Account: Now, you need to credit the appropriate account to balance the entry.
   • To Credit the Client: If you want to give the credit back to the client matter, you’ll credit the client hard costs advanced account. This will require a corresponding credit entry in the Transactions module.
   • To Credit the Firm: If the credit is for a hard cost that was previously “no-billed,” you can credit a firm expense account that doesn’t require an attached transaction.

When you print the next check for this vendor, ProLaw will automatically reduce the total amount by this credit memo (debit check), as long as the check isn’t on hold.

What If the Vendor Sends a Paper Check?

If the vendor sends a physical check instead of a credit, you have a couple of options.

Option 1: Record It as a Debit Check You can still use the debit check method described above. In this case, you’ll assign a check number to the entry. This makes it clear that the entry was a check, not a deposit.

Important Note on Reconciliation: This will affect your bank reconciliation. The debit check will clear the bank in ProLaw as a check, not a deposit. It’s often easiest to deposit this check separately from other checks to ensure the amounts balance correctly during reconciliation.

Option 2: Enter It as Unapplied Cash If your firm prefers to avoid the reconciliation complexities of a debit check, you can enter the vendor check as unapplied cash. This allows you to give the credit back to the client matter without the bank reconciliation issue.

By understanding these options, you can confidently handle vendor credits in ProLaw and ensure your firm’s financials stay accurate.

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