Common questions around NetSuite Credit Memo issues

Owned by Roger Fang
Last updated: Jan 05, 2023 by Dave Shaffer

Pipe17 NetSuite ERP connector supports Credit Memo automation when it sees store credit as the payment method or one of the payment methods in the original order. This piece of automation has a certain level of complexity as it’s downstream of the order creation/update flow and there are some prerequisites to make it work. Here are some common questions around this automation.

Do we create Credit Memo in NetSuite ?

No. What we do is to look up existing Credit Memos created for that customer in NetSuite, then we apply the Credit Memo to the Invoice of the order, after that the Credit Memo will be applied/consumed and the invoice will get paid.

When do we apply Credit Memo ?

There are couple of steps that we need to take before applying Credit Memo:

  1. We have an order pulled from the marketplace to Pipe17, with store credit as its payment (or one of its payments);

  2. Send the order through to NetSuite by creating a Sales Order there;

  3. Fulfill the order in NetSuite either by Pipe17 or by the customer manually;

  4. Once it's fulfilled or partially fulfilled, invoice the order - Note this generally takes 15mins at max as we periodically check fulfilled orders in NetSuite then create invoices for them;

  5. Once the invoice is created, we have another automation that runs every 15mins for applying Credit Memo to that invoice, if we have Credit Memo(s) pre-created in NetSuite for that customer (the customer inherits from the original order and it will be passed to the sales order, item fulfillment and invoice in NetSuite). The automation will pick the first credit memo it finds and use that. If that credit memo is insufficient for the store credit amount, a second credit memo will be applied, if available. And so on.

When will Credit Memo Application Failure exceptions occur?

Whenever Credit Memo fails to get applied, we will fire an exception labeled as Credit Memo Application Failure that falls into Financials Error category.

There are different use cases that have different causes:

Credit Memo for the customer cannot be found in NetSuite

The error message “No credit memo found in NetSuite for customer“, will be generated when the customer from the order/invoice doesn’t have any Credit Memo issued in NetSuite. You can validate this in NetSuite manually by going to the customer detail page > sales > transactions > select Credit Memo.

An order that has Credit Memo Application Failure exception in Pipe17
The customer has no Credit Memo issued in NetSuite

 

The customer doesn’t have sufficient Credit Memo that can be applied

If we can find Credit Memo issued under the customer in NetSuite, however if it’s insufficient to pay the invoice we will not be able to apply the credit memo either. The error message in the exception detail would be “Credit Memos failed to apply, due to the customer credits are not sufficient in NetSuite“. If you go to the NetSuite customer page, per above, you will see Credit Memo transactions show up there but the amount is not sufficient to cover the invoice of that order.

Credit Memo is in a closed period

There is another case which is relatively rare - when you see error message in the exception detail claiming “Credit Memo failed to apply, due to lack of permission to update the record, please check if it is in a closed period.“ This actually means the Credit Memo can be found in NetSuite, and may sufficient amount to be applied, but we are not able to apply it due to the transaction is in a closed period that doesn’t allow any further edits/updates. In this case, the credit memo cannot be applied either via the NetSuite UI or the API.

If a Credit Memo is applicable, meaning it’s in a open period, it will be editable via NetSuite UI as you can see in the following screenshot:

Whereas if a Credit Memo is in a closed period then the Edit button will disappear and invisible on NetSuite UI, and only the Refund action will appear. Below is an example where the Credit Memo is not applicable due to it’s in a closed period, in that case we will not be able to apply it or update it via API or UI. In this case, the NetSuite API will return an error indicating we don’t have the permission to update the record. A special Pipe17 error message has been created for this issue - “Credit Memo failed to apply, due to lack of permission to update the record, please check if it is in a closed period.“