The return could be due to the product being damaged.Īlternatively, the store might have made an error, and you have ended up overpaying by accident. When is a Credit Memo Issued?Ĭredit memos are usually issued in Canada on bank statements after someone completes a return in a store. On the other hand, large businesses will usually give a direct refund instead of a credit memo. They are often used by smaller businesses that do not want to give direct refunds. You can then use this credit to make another purchase at the same store. You might assume this is the name given for a refund, but credit memos are a bit different.Ī credit memo, or credit memorandum, provides details about the amount the store is refunding you in store credit. Then, a few weeks later, you receive a credit memo. This creates a return authorization from a cash sale or invoice that automatically shows the items from the original sale and is linked to the original sale.Let’s say you buy something in a store in Canada and then return it for some reason. This creates a return authorization that is not linked to a sale. NetSuite offers two ways to issue a return authorization.Įntering a Standalone Return Authorization. To begin the customer return process, issue the authorization.

This way, you can monitor accurate data to know which steps are completed and what to expect next.įor example, when the warehouse manager gets the item from the customer and marks the return authorization received, the accounting department sees the return authorization in their queue to be credited. For more information on this type of customer credit memo, read Customer Credit Memos.Īs you enter information to process the return, the return authorization keeps track of the status of return while accounting and inventory records are updated. Whether Advanced Receiving is enabled or not, you can always enter standalone credit memos that record credit on a customer account that can be applied toward their account balance. If you do not use the Advanced Receiving feature, you can create a refund directly from an authorization without creating a credit memo first. Next, from the credit, a refund is created, also in the authorized amount.įor more information, read Receiving a Purchase Orders With Advanced Receiving. If you have enabled the Advanced Receiving feature, you must credit a return before you can refund a return.įirst, a credit is created from the return authorization in the authorized amount. Whether the Advanced Receiving feature is enabled. Your setting for the Refund in Advance of Return preference. Standard Return Authorization - Cash – A return using this form generates a refund for the returned item.Ī cash form return authorization cannot later be processed as a credit memo. The credit memo can later either be applied to an account balance or refunded to the customer. Standard Return Authorization - Credit – A return using this form generates a credit memo for the returned item. Standard forms available include the following: Which return authorization form is selected in the Custom Form field on the authorization. Whether the return process results in a credit or a refund is dependent on three things: The form you choose when you enter an authorization guides whether the return is processed as a refund or a credit, along with other account settings, as described below.

Credit memo vs refund