# What is a debit memo? > A debit memo adds a charge to an account or records a deduction a buyer is taking. Who sends one, when, and how it differs from a credit memo. Source: https://learn.ynteractive.com/content/glossary/debit-memo · Updated 2026-10-08 · Free from Stepthrough (https://learn.ynteractive.com) [Business](https://learn.ynteractive.com/content/glossary#topic-business) · [AI glossary](https://learn.ynteractive.com/content/glossary) Quick answer A debit memo is a document that records an adjustment outside the normal invoice. A seller sends one to bill a customer for an amount left off an invoice, such as an undercharge or extra freight. A buyer may send one to a vendor to record a return or shortage it is deducting. Banks also issue them for fees. Last updated October 8, 2026 Updated October 8, 2026 · By [Robert Breen](https://learn.ynteractive.com/content/about) ## Why it matters for a small business Small billing corrections need a paper trail. If an invoice went out $60 too low, reissuing it confuses everyone who already saw the first version. A debit memo that names the original invoice number and the reason bills the difference cleanly, and your [accounts receivable](https://learn.ynteractive.com/content/glossary/accounts-receivable) report shows both documents side by side. On the buying side, some [accounts payable](https://learn.ynteractive.com/content/glossary/accounts-payable) teams issue a debit memo when goods arrive damaged or short, then pay the invoice minus that amount. That only works smoothly when the vendor agrees, because until the vendor issues a matching [credit memo](https://learn.ynteractive.com/content/glossary/credit-memo), its books still show the full balance as owed. A bank debit memo is different again: it is a fee or charge on your statement, and it turns up when you reconcile the account. ## In a real lesson: Build an AI Vendor Follow-Up Agent in n8n Stepthrough has no lesson that writes debit memos. The closest is the [AI Vendor Follow-Up Agent lesson](https://learn.ynteractive.com/content/ai-vendor-follow-up-agent-n8n), built for Ridgeline Supply Co., a made-up warehouse and distribution business. One of the orders you hand the agent is "Northwind Wrap, PO 4492, 12 rolls short," which is exactly the kind of problem a buyer's debit memo can settle. The agent's system prompt tells it to name the PO number and what was ordered, state the problem in one sentence and ask one clear question: "a ship date, a tracking number, or a fix." It also says "Do not threaten to cancel orders or invent penalties." That is the right order of events. Ask the vendor first. If the vendor agrees to a reduction, Ridgeline's AP team can record a debit memo for the 12 rolls, or wait for the vendor's credit memo, and pay the rest. The decision and the memo stay with people. [Try this lesson free](https://learn.ynteractive.com/modules/n8n-ai-agent-operations) or [read the step-by-step guide](https://learn.ynteractive.com/content/ai-vendor-follow-up-agent-n8n). ## Common confusions ### Debit memo vs credit memo A credit memo lowers what the customer owes. A seller's debit memo raises it. A buyer's debit memo is the buyer's own record of a reduction it is claiming, which the vendor usually answers with a credit memo. ### Debit memo vs invoice An [invoice](https://learn.ynteractive.com/content/glossary/invoice) bills a sale. A debit memo adjusts a bill that already exists and should always point back to it. ## Tips - Put the original invoice or PO number and a one-line reason on every memo. - Agree on a shortage or return with the vendor before deducting it from a payment. - Review bank debit memos each month so unexpected fees get questioned quickly. ## Related terms [Credit memo](https://learn.ynteractive.com/content/glossary/credit-memo) · [Accounts payable](https://learn.ynteractive.com/content/glossary/accounts-payable) · [Purchase order](https://learn.ynteractive.com/content/glossary/purchase-order) · [Three-way match](https://learn.ynteractive.com/content/glossary/three-way-match) · [Invoice](https://learn.ynteractive.com/content/glossary/invoice) · [Bank reconciliation](https://learn.ynteractive.com/content/glossary/bank-reconciliation) ## More Business terms [Declarations page](https://learn.ynteractive.com/content/glossary/declarations-page) · [Deductible](https://learn.ynteractive.com/content/glossary/deductible) · [Deductible vs copay](https://learn.ynteractive.com/content/glossary/deductible-vs-copay) · [Default judgment](https://learn.ynteractive.com/content/glossary/default-judgment) ## Where you use it: free lessons - [Build an AI Vendor Follow-Up Agent in n8n](https://learn.ynteractive.com/content/ai-vendor-follow-up-agent-n8n) (n8n, 12 min) ## More free tutorials [AI for Finance](https://learn.ynteractive.com/content/industry/finance) ## Frequently asked questions **Who issues a debit memo, the buyer or the seller?** Either. A seller issues one to add a charge to a customer's account, for example after an undercharge. A buyer issues one to a vendor to record a deduction for a return or shortage. Read the reason line to know which kind you have. **What is a debit memo on a bank statement?** It is a charge the bank took from your account outside a normal check or card payment, such as a service fee, a returned deposit or a wire fee. Match each one during your monthly bank reconciliation. **Is a debit memo the same as a debit note?** Yes, in most places the two names mean the same document. Some companies and countries prefer one term over the other, but both record an adjustment that raises a balance or claims a deduction. [All AI glossary terms, A to Z](https://learn.ynteractive.com/content/glossary) · [Free prompt templates](https://learn.ynteractive.com/content/prompts)