How to Create a Credit Memo in NetSuite

Open the Bill Credit entry form

From the NetSuite home dashboard, go to the top navigation menu and select Vendors. Hover over Accounts Payable, then click Enter Vendor Credits from the dropdown menu.

Enter the vendor credit's core details

In the Reference No. field, enter the credit's reference number (for example, 123456CR). In the Vendor dropdown, select the vendor (for example, ABC Inc.). In the Amount field, enter the credit amount (for example, 5,000.00).

In the Subsidiary dropdown, select the appropriate subsidiary (for example, US 1). Only one subsidiary may appear here if the vendor was created for a single subsidiary or if you only have access to that subsidiary.

Select the location

In the Location dropdown, select the appropriate location for this transaction, such as Store #100, New York.

Add a memo explaining the credit

In the Memo field, enter a short explanation for the credit, such as Project was cancelled.

Confirm the remaining header fields

Before moving to the expense details, confirm the following fields are set correctly:

• Date matches the date of the credit (for example, 7/30/2017)
• Account is set to 2000 Accounts Payable
• Posting Period matches the date entered (for example, Jul 2017)
• Currency is USD
• Exchange Rate is 1.00
• Form is set to Primary Vendor Bill Credit
• Requestor displays your name

Use the credit memo to offset a bill that has not yet been paid. This removes the outstanding bill amount from NetSuite's records once applied.

Enter the expense account details

In the Expenses section, confirm the Account field defaults to 2000 Accounts Payable, the Posting Period matches the credit date, and Currency and Exchange Rate are correct.

In the Account field under Expenses, enter or select the account that matches the original bill (for example, 6180 Professional Fees). Enter the Amount (for example, 5,000.00) and repeat the same Memo used earlier.

Configure the Auto Apply option

Locate the Auto Apply checkbox in the Expenses section. By default, this box may be checked — if so, NetSuite automatically applies the credit memo to the vendor's oldest outstanding bills.

If you want to choose which invoices receive the credit manually, uncheck Auto Apply.

Save the vendor credit

Once all fields are complete and confirmed, click Save at the bottom of the form.

Verify that the bill credit was created

After saving, a confirmation message appears indicating the transaction was successfully saved. The Bill Credit summary displays the reference number, vendor, amount, subsidiary, location, memo, account, posting period, currency, and exchange rate you entered.

This bill credit is now ready to be used to clear open invoices for the vendor.

Review the vendor's open balance

Scroll down on the vendor summary page to review the open balance. For example, after applying a $5,000.00 credit against a $5,000.00 bill and a $1,000.00 bill, the open balance updates to $1,000.00.

You can verify this by reviewing the Subsidiaries section, which shows the vendor's balance, and by cross-checking outstanding bills against the APA agent report or the vendor's transaction history.

Start the payment application

On the vendor summary page, click Make Payment to begin applying the vendor credit to the vendor's open bills.

Apply the credit to fully offset one bill

On the Bill Payment screen, under the Apply tab, you'll see the bill credit and the vendor's open bills listed together. To fully offset a bill:

• Check the box next to the Bill Credit and the matching bill.
• Confirm the payment amount for the bill credit is negative (for example, -5,000.00) and the payment amount for the bill is positive and equal (for example, 5,000.00).

This clears the matching bill in full using the vendor credit.

Alternative: split the credit across multiple bills

If you want to use one vendor credit to clear a smaller bill and partially clear a larger one:

• Check the boxes next to the Bill Credit, the smaller bill, and the larger bill.
• Set the payment amount for the smaller bill to its full amount (for example, 1,000.00).
• Set the payment amount for the larger bill to the remaining credit (for example, 4,000.00).
• Confirm the bill credit's payment amount still reflects the full credit (for example, -5,000.00).

This fully clears the smaller bill and applies the remaining credit to the larger bill, leaving any uncovered balance open.

Finalize and save the payment application

Review the Apply tab one more time to confirm the payment amounts for each transaction, including the bill credit and every selected bill. The screen also offers Mark All, Unmark All, and Customize options to help you select transactions.

When the amounts are correct, click Save to finalize the bill payment.

Confirm the transaction was saved

After saving, a green "Confirmation: Transaction successfully Saved" banner appears at the top of the Bill Payments list. The list shows columns for Edit/View, Date, Document Number, Transaction Number, Name, Account, Status, Memo, Currency, and Amount, so you can confirm your transaction was recorded.