Credit memos and returns

Credit memos and returns create reconciliation discrepancies when reversal transactions are missing, incomplete, or improperly linked to the original sale. Reconciliation evaluates return activity to ensure that tax reporting reflects actual returned amounts.

Return missing from AvaTax

When the ERP contains a credit memo but no corresponding negative transaction exists in AvaTax:

Risk: Tax liability remains overstated in AvaTax.
Resolution: Create a return invoice using the RefundTransaction API to reflect the credit in AvaTax.

Return amount mismatch

When a partial return is recorded in the ERP but a full void exists in AvaTax, or vice versa:

Risk: Returned amounts don’t align between systems.
Resolution: Adjust the transaction to match the actual returned amount recorded in the ERP.

Orphaned return

When a return exists in AvaTax without a matching original invoice:

Risk: The reversal transaction lacks reference to the originating sale.
Resolution: Investigate the transaction source and create the original transaction if required before processing the return.