In our previous blog, we learned about the return authorization form, which initiates the customer return process. Managing returns, however, goes beyond any single form. Let’s take a look at how return management in NetSuite works.
Return Preferences
Before you dive into processing customer returns, you would need to set up your company’s return preferences. The return preferences are all located under Setup > Accounting > Preferences > Accounting Preferences in the Returns section of the Order Management tab. Some of these preferences have to do with vendor returns, but four of these preferences deal directly with how your company handles customer returns.
Default Return Authorization Status
First, you can choose the default return authorization status—either Pending Approval or Pending Fulfillment. In other words, when a return authorization form is created, does it require approval (Pending Approval) first, or can the return go into effect right away (Pending Fulfillment)?
Refund in Advance of Return
A second preference is Refund in Advance of Return. This preference enables you to issue either a cash or credit refund before an item has been fully returned. If this feature has not been enabled, then NetSuite will not allow you to issue the refund before the items have been marked as returned.
Restock or Write-Off Returned Items
These two preferences determine what happens to the returned items once they get back to you. If you want the items to be restocked back into the inventory when they arrive, you would enable the feature Restock Returned Items. But if the items should not be restocked into the inventory for resale, then you need to write off the items as a loss. Under the preference Write-Off Account for Returns, you would choose the account where the items are written off as a loss.
The Return Workflow
Accurately tracking customer returns is vital to ensuring that both the customer and the business are satisfied with the entire process. Consequently, understanding the return workflow is essential.
Create the Return Authorization Form
The first step of return management is creating a return authorization form. This form includes information like the customer returning the item, the specific items being returned, and the price of the items. The return authorization form is also what determines whether the return will result in a cash refund or a credit memo, depending on the type of return authorization form that is created. For more details on the return authorization form, see our previous blog.
Approve the Return Authorization
Once the return authorization form has been created, the next step is to get it approved. To approve a return, you would navigate to Transactions > Customers > Approve Return Authorizations. On this page, you can either search for the exact return using the return number, or you can set filters based on the date of the return you want to approve.
After setting the filters you need, you would select the return (or returns) you want to approve and then click Submit.
Alternatively, you can approve returns directly from the return authorization forms themselves. To access these forms, navigate to Transactions > Customers > Issue Return Authorizations > List. On this page, click View next to the return authorization you want to approve. Then, on the form itself, you would click the Approve Return button.
As we keep going through the return process, keep in mind that you will typically be able to move any return authorization form from one stage to the next directly on the form itself. The form will know where it is in the process and will have a button that will move it to the next stage.
Receive the Return
Once the return has been approved, the customer will send in the item and you would need to officially mark it in NetSuite as being received. To do this, navigate to Transactions > Customers > Receive Returned Order. As with approving the return, you would simply select the return or returns you want to mark as received and click Submit.
You can also receive returns directly from the return authorization form itself. Simply navigate to the form and click the Receive button.
Issue a Customer Credit Memo
The next step is to issue a customer credit memo for the return. A credit memo decreases the amount that a customer owes the business. It is also the first step to refunding the customer, whether the final refund will be a credit or a cash refund. To issue a customer credit memo, navigate to Transactions > Customers > Issue Credit Memos. On this page, you would fill in all the relevant information about the customer, the posting period this credit memo would apply to, the location associated with the credit, and the items being credited. After you save this credit memo, your inventory will be affected accordingly.
Refund an Authorized Customer Return
Next, you would need to refund the customer return. Navigate to Transactions > Customers > Refund Returns. On this page, you will see the list of authorized customer returns that are ready to be refunded. You can search for the exact transaction you want to refund by the customer and/or the return number of the transaction. Then, select the transactions you want to refund under the Credit/Refund column. The Return Type column will tell you whether the transaction will refund as a cash or a credit refund. Once you are satisfied that the information about the transaction is all accurate, click submit.
Close Line Items on a Customer Return Authorization
The final step of return management in NetSuite is to close line items on the customer return authorization. To do this, you would open the return authorization form that has items which have been fully returned and refunded (Transactions > Customers > Issue Return Authorizations > List). Once you have selected the form you want, you can either close a single line item or all the line items. To close all the line items, simply select the button Closed. If you just want to close a single line item, edit the authorization form, select the line you want to close, and select the Closed box. Then save the form.
Conclusion
Return management in NetSuite ensures that returns run smoothly and accurately, with every step of the process being documented. If this post helped you understand NetSuite better, join the SuiteRep newsletter below to receive future posts directly in your inbox once a week!