This article explains, with examples, how related transactions such as Return Authorization, Credit Memo, and Cash Refund affect the Sales Order amount and the General Ledger (GL) in NetSuite.
Example Scenario: Sales Order and Related Transactions
Original Sales Order
- Sales Order Amount: $1,000
- Accounts Affected:
- Accounts Receivable (AR): Debited by $1,000.
- Sales Revenue: Credited by $1,000.
Transaction 1: Return Authorization
- A customer returns $200 worth of items.
- Impact on Sales Order:
- No change to the sales order amount, as Return Authorizations (RAs) are non-posting.
- Impact on GL:
- None at this stage.
Transaction 2: Credit Memo
- After receiving the return, a Credit Memo is issued for $200.
- Impact on Sales Order:
- The sales order is partially reversed, reducing the net recognized revenue to $800.
- Impact on GL:
- Accounts Affected:
- Accounts Receivable (AR): Credited by $200.
- Sales Revenue: Debited by $200.
- If the returned item is restocked:
- Inventory: Debited by the item cost (e.g., $50).
- COGS (Cost of Goods Sold): Credited by $50.
Transaction 3: Cash Refund
- The customer requests a refund for the remaining $200 balance instead of using it as credit.
- Impact on Sales Order:
- The sales order revenue reduces to $800. The refund finalizes the transaction.
- Impact on GL:
- Accounts Affected:
- Cash: Credited by $200.
- Accounts Receivable (AR): Debited by $200.