3689979 - Error VF354 – "Billing via refund determination only, due to inspection split" in SAP S/4HANA Cloud Public Edition

When attempting to create an intercompany credit memo for a returns delivery, the system issues the following error:

• VF354 – "Billing via refund determination only, due to inspection split".

As a result, the intercompany billing document cannot be created. This occurs after performing inspection during the Advanced Returns Process, where the inspection results are split (e.g., part accepted, part scrapped).

SAP S/4HANA Cloud Public Edition

1. Create a customer Return Order.
2. Post Goods Receipt for the return delivery.
3. Perform Inspection and split the results (e.g., 4 accepted / 1 scrapped).
4. Save and complete inspection.
5. Open Create Billing Documents app.
6. Attempt to create an Intercompany Credit Memo (IG).
7. System displays:
   
   • "Billing via refund determination only, due to inspection split".
     • Billing is blocked.

Currently, intercompany billing documents can only be created when no inspection split occurs. When a returns inspection results in a split — for example, part of the quantity is accepted and part is scrapped — the system does not support creating an intercompany credit memo for the associated returns delivery. There is currently no feasible workaround to override refund determination, bypass inspection split logic, or force billing document creation.

An existing feature request has been raised on the Customer Influence Portal and is currently marked as "Planned (Long-term)". The request is: Request ID 308841: Returns (BKP) - inspection split / intercompany credit (IG). Voting on this request and leave there a comment describing the specific business impact will help the Product Management team assess urgency and prioritize accordingly.

• KBA 2807810 - What is Support issue – What is Feature Request: Cloud Solutions
• KBA 2963059 - How to Submit Feature Requests for SAP S/4HANA Cloud Product

Intercompany, IG Billing, VF354, Inspection Split, Returns, MSR_IRD, Refund Determination, Credit Memo, ARM, 2F4, BKP, S/4HANA Cloud, Advanced Returns, Billing Block, Public Cloud, Functional Gap  , KBA , LO-ARM-INS-2CL , ARM Inspection (Public Cloud) , Problem