DMR (Debit Memo Request) Process Workflow

1. Purpose & Scope

This best practice defines the standard process for handling DMRs (Debit Memo Requests) — the return of damaged or defective items to a supplier, the resulting credit memo, and the offset of that credit against the original purchase order in Epicor.

It applies to any organization unit that creates purchase orders, inspects incoming goods, or processes supplier credits, and is intended to be adopted as a repeatable standard across ERP Rescue engagements.

2. Roles & Responsibilities

Role	Responsibility
Quality Control	Flags defective or damaged parts during inspection; enters the DMR request into Epicor, which triggers the downstream credit memo process.
Purchasing	Owns DMR creation and follow-up end-to-end: initiates the DMR, returns items to the supplier, and secures the credit memo. Serves as the escalation point when a credit memo arrives without a linked DMR.
Accounts Payable / Accounting	Last step in the process. Processes credit memos once purchasing and quality control actions are complete — not responsible for DMR creation, approval, or follow-up. Flags unlinked credit memos for purchasing to resolve.
ERP Process Owner	Point of contact for accounting-side questions and procedure clarifications; provides ongoing support after rollout.

3. Process Workflow

The diagram below shows the standard flow from defect identification through audit-trail completion, plus the exception path for credit memos that arrive without a linked DMR.

3.1 Standard Path

Step	Action	Owner	Detail
1	Flag defective part	Quality Control	Damage or defect identified at incoming inspection or in stock.
2	Enter DMR in Epicor	Quality Control	Creates the DMR request record, which triggers the downstream credit process.
3	Initiate & track DMR	Purchasing	Owns DMR creation, returns the item to the supplier, and follows up until resolved.
4	Secure credit memo	Purchasing	Obtains the supplier's credit memo, ensuring it references the original PO.
5	Process credit memo	Accounts Payable	In Epicor, selects "Get Debit Memo" (not "Get Receipt"), replacing the miscellaneous line with the fetched DMR line.
6	Audit trail complete	Accounting	Credit is linked to the PO; inventory and books reconcile correctly.

3.2 Exception Path: Credit Memo Without a Linked DMR

Many ERP systems (including Epicor) cannot debit individual part numbers directly, so unlinked credits default to miscellaneous processing — weakening the audit trail and complicating inventory accounting. When this happens:

1. Accounts Payable identifies the credit memo has no associated DMR and flags the gap.
2. AP contacts the purchasing agent to verify why and request the missing documentation.
3. Purchasing either supplies the correct DMR reference, or the situation is resolved as a documented exception (e.g., a pricing correction with no DMR).
4. AP processes the corrected/clarified entry, preserving the audit trail.

4. System Best Practices (Epicor)

• Do not rely on automated alerts for new DMRs unless explicitly configured — by default, monitoring is manual and depends on purchasing and quality control follow-through.
• Weigh notification automation against workload: adding alerts can improve visibility but may increase the processing team's workload if not scoped carefully.
• Validate DMR status reports in a Pilot/test environment before relying on them in production.
• Use "Get Debit Memo," not "Get Receipt," when applying supplier credits to a PO.
• Configure DMR credit lines to display linked purchase orders, simplifying matching during processing.
• Expect and budget time for rough edges during pilot testing; prioritize process clarity over technical perfection ahead of go-live.

5. Implementation & Rollout Guidance

Milestone	Guidance
Go-live timing	Align go-live with the start of a fiscal period (e.g., new fiscal year) to avoid conflicts with year-end closing activities.
Early adoption	Expect low initial volume; prioritize flagged incoming-inspection defects and visible damages first.
Supplier/part prioritization	Identify key suppliers or part categories to prioritize for DMR flagging with input from purchasing leadership.
Week 1 post-launch	Expect initial DMR activity to appear within about a week of go-live; monitor closely during this window.
Ongoing	Use non-conformance processing within the ERP to centralize defect tracking, replacing offline handling of damaged items.

6. Tools & Support

• Maintain a current End User Procedure (EUP) covering both supplier-issued credit memos and internally created debit memos for short payments. Update it as new questions arise.
• Use a Pilot/test environment to validate DMR status reports and confirm process readiness before go-live.
• Designate an ERP Process Owner as the point of contact for accounting questions and procedure clarifications; encourage early questions to prevent compounding errors.

7. Implementation Checklist