Companies sometimes fail to pay an invoice when they are due
Companies or buyers sometimes fail to pay an invoice when they are due, so the seller issues a debit memo. The function of the debit memo is like an invoice and serves as a demand for payment of the balance owed plus fees for late payment.
Some trading transactions involve a vendor-managed warehouse where buyers have prior arrangements with sellers to withdraw merchandize on a regular basis. In these cases, the buyer issues a self-billing invoice whenever he takes out goods based which is called his consumption levels.