# Supplier credit notes in NetSuite for wholesalers

NetSuite has supplier credit notes built in. Short and damaged deliveries are routine in wholesale. Each one should produce a vendor credit from the supplier, tied back to the original vendor bill.

## Why it matters for wholesalers

- A vendor credit that is never applied reduces nothing. The bill gets paid in full and the credit sits as an open balance.
- Returns, rebates and settlement documents look like credits but follow different rules. Mixing them loses the trail.

## For wholesalers in NetSuite

- Start a return from the original purchase order. Transactions > Purchases > Enter Vendor Return Authorizations can be created from an existing PO and shows the items and prices from the original purchase. Use the reference field for the supplier's RMA number.
- Ship the goods back on the Item Fulfillment page and click Save and Credit. NetSuite enters a bill credit for the quantities you shipped only.
- If you already shipped, open the return authorization and click Refund. A bill credit opens with the lines filled in. Save it and apply it to open bills from that supplier.
- On OneWorld with Centralized Purchasing and Billing you can create the return centrally, fulfil it in the subsidiary and location that holds the stock and credit it centrally.

## What NetSuite does on its own

Vendor credits are entered on Enter Vendor Credits and applied to open bills. A credit can be entered by hand with no bill or created from an existing bill. Apply it with Auto-Apply or on the Apply subtab, or when paying on the Pay Bills screen.

You need open bills from that vendor to apply a credit.

What you need and the setup steps: https://www.pulsify.tech/supplier-credit-notes-for-netsuite/

## Example

Example Glass Jars Pty Ltd delivers 1,000 jars. 80 arrive broken. The warehouse logs a short delivery and the supplier issues a vendor credit for 80 jars.

- Original invoice 7730, 1,000 jars: $4,000.00 (Paid at $4.00 a jar)
- Credit note CN-402, 80 jars returned: -$320.00 (Matches the damaged quantity on the delivery docket)
- Net payable after credit: $3,680.00 (Credit applied against invoice 7730)

The credit is matched to invoice 7730 through the delivery docket and applied. The wholesaler pays $3,680 plus GST, not the full invoice.

## Common mistakes

- Letting the supplier issue a credit but never applying it to the invoice it belongs to.
- Accepting a credit for a lower quantity than the damage report shows.

## Step-by-step guides for NetSuite

- How to apply a vendor credit to a vendor bill in NetSuite: https://www.pulsify.tech/how-to/apply-a-supplier-credit-note-in-netsuite/

## What Pulsify adds

Pulsify reads vendor credit documents like invoices and flags one with a missing or unknown original invoice. Pulsify connects to NetSuite. We set up the connection for you. More: https://www.pulsify.tech/invoice-processing-automation/

## Common questions

### How do I claim a credit for returned stock in NetSuite?

Create a vendor return authorization, ideally from the purchase order. Ship the goods on Item Fulfillment and click Save and Credit. You can also click Refund on the authorization. Either route makes a bill credit for what was shipped, which you then apply to open bills.

### Should credits be applied before payment?

Yes. Apply a vendor credit to its original bill before you create the payment, so the net amount is paid. If the credit arrives later, ask for a refund or offset on the next invoice.

### How do I apply a supplier credit in NetSuite?

Enter it under Transactions > Payables > Enter Vendor Credits, then tick Auto-Apply or pick bills on the Apply subtab. You can also tick the credit beside the bill on Pay Bills.

## Sources

- https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N2386460.html
- https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N2387332.html
- https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N2393090.html
- https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/article_162013917948.html
- https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/article_161122386910.html
- https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/tax-invoices

Source: https://www.pulsify.tech/supplier-credit-notes-in-netsuite-for-wholesalers/ (last checked 2026-10-19)