ANS-0700 · SALES ORDER PROCESSING
How to Effectively Use Credit Memos and Manage Item Returns in NetSuite
Properly configuring item pricing, inventory restock options, and item selection on NetSuite credit memos ensures accurate financial tracking and inventory management.
Short answer
When issuing NetSuite credit memos, ensure the item price matches the refund amount. For items not returning to inventory, uncheck the 're-stock' box. Best practice is to use the original sales order item to facilitate accurate tracking of individual returns and manage associated accounts effectively.
Scenario
Organizations often need to issue credit memos for customer returns or adjustments. A common challenge involves determining the correct item pricing, managing inventory implications, and selecting the appropriate items to ensure accurate financial reporting and inventory control within NetSuite.
Solution
To effectively use credit memos and manage item returns in NetSuite, consider the following guidelines:
Item Pricing for Credit Memos:
The price of the item on a credit memo should reflect the exact refund amount. If the refund amount differs from the original item value, users can either adjust the item value directly on the return or add a "discount" type item to track the difference in a separate account.
Inventory Restock and Accounting for Returns:
If items are not intended to return to inventory, the 're-stock' checkbox on the item line should be unchecked. This action impacts the scrap account. To track the expense of returns in a distinct account, consider using a non-inventory item specifically configured with unique accounts for returns.
Best Practice for Item Selection:
It is best practice to use the same item on the credit memo as was originally listed on the sales order. This approach enables more effective tracking of individual item returns.
Expert NetSuite Support
Need help with this NetSuite issue?
Sales Order Processing consulting and configuration support