A credit memo is a document notifying a client that his balance has been reduced. If the client has a credit with you, you can apply this credit to an invoice. This payment record will reduce the outstanding balance on invoices. The Credit Memo feature allows you to create, view and prints credit memos, modify credit payment details, etc. Credit is given to clients in favor or exchange for any task or activity. Credit memos can either be created here only or viewed after a Credit payment type has been recorded for a client against an invoice in the Payment screen. The changes made in here get reflected in the previous payments recorded in the Payment screen.