NetSuite Return Authorizations

NetSuite for Administrators

The NetSuite Return Authorizations feature enables companies to manage customer returns. Let’s take a quick look at this feature and how it works.

Overview of NetSuite Return Authorizations

First, in order to use this feature, you would need to enable Return Authorizations, which is located under the Basic Features section of the Transactions tab in Enable Features. A return authorization form—also called a Return Materials Authorization form, or RMA form—is a transaction that does not post to the General ledger and contains the details of an expected customer return. These details include things like the customer making the return, the exact items being returned, and the quantities and prices of those items.

Setting Return Preferences

Before using Return Authorizations, you need to set your return preferences. These can be set in the Returns section of the Order Management tab in Accounting Preferences (Setup > Accounting > Preferences > Accounting Preferences).
NetSuite Return Preferences
eitherSome of the preferences you can set up here include setting your default return authorization status (Pending Approval or Pending Receipt); whether or not the refund will be sent out before the return has been completed; and whether or not you will be restocking returned items. If you will not or cannot restock returned items, then returned items will need to be written off as a loss. The Write-Off Account for Returns dropdown field allows you to select the default write-off account for these items.

Types of Returns in NetSuite

There are two types of returns, or two ways to handle a return: by issuing a credit or a cash refund. Whether or not a return will result in a credit to the customer or a cash refund is dependent on the type of RMA form you use.

Credit Refunds in NetSuite

To give your customers a credit when they make the return, you will need to use the Standard Return Authorization – Credit form. Using this form to process the return will result in a Credit Memo. Your customers can either use their Credit Memos to decrease the amount they owe you, or they can put the credit memo toward future invoices.
If you use the Advanced Receiving feature, all your returns will initially be processed as credit memos rather than a refund. You’ll still be able to create a cash refund, however, from the credit memo.

Cash Refunds in NetSuite

For a return to result in a refund, you’ll need to use the Standard Return Authorization – Cash form. And though credit memos can later be processed as a cash refund, cash refunds cannot be turned into credit memos.

How to Create a Return Authorization

How would you create a return authorization? You have a couple options. RMA forms can be created either from an existing transaction record or from scratch.

RMA Forms from Existing Transaction

You can create an RMA form from existing sales orders, cash sales, or invoices. On any one of those transactions (as long as the transaction has already received payment), you’ll see an Authorize Return button.
NetSuite Invoice Return Authorization Button

Selecting this button will take you to a Return Authorization form with the status of To Be Generated. At the top of the form, you’ll need to choose the correct form for either a cash or credit refund, depending on the type of return you need. You’ll notice that all the relevant details from the original transaction have auto-populated the RMA form.

NetSuite To Be Generated Return Authorization Form

Under the Items subtab, you’ll see all the items that were on the original transaction. If all of these items are being returned, you can just save the record as it is. If, however, the customer is returning only some of the items on this transaction, you can remove any irrelevant items from this list.

NetSuite Return Authorization Items Selection

RMA Forms from Scratch

Your other option, of course, is to create the RMA form from scratch. A standalone RMA form like this is not going to be connected to any sales transaction. You’ll need to navigate to Transactions > Customers > Issue Return Authorizations. On this transaction, you’ll need to fill out the necessary information, including the customer that this refund will be going to. Then, in the Items subtab, you’ll add any items that are being returned, along with relevant quantity, rate, or amount information.
NetSuite Standalone Return Authorization

Conclusion

The NetSuite Return Authorizations feature allows you to easily process customer returns. If you enjoyed this blog, be sure to subscribe below to our newsletter to keep learning more about key NetSuite features like this one.