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While backing up SQL workloads, the job returned an error saying “Unable to truncate Microsoft SQL Server transaction logs. Details: Failed to process 'TruncateSQLLog' command. Failed to truncate SQL server transaction logs for instances:  . See guest helper log. .” 

what could be the reason for this?

In the sql settings, I enabled “backups logs periodically” and specified retention period. does these settings have something to do with the error?

This could be SQL was too busy at the time of the backup or maybe the SQL VSS writer is not in a good state.  Also if you have SQL native backup or other jobs running this can interfere as well.  Best to check the job logs to see for sure.


You will find the mentioned logs from @Chris.Childerhose on the sql server you try to backup in this location:

C:\ProgramData\Veeam\Backup\VeeamGuestHelper_DATE.log

Look the logs for sql related errors. 


Maybe the user used for guest interaction does not have necessary permissions? 

https://helpcenter.veeam.com/docs/backup/vsphere/required_permissions.html?zoom_highlight=permission&ver=110#performing-guest-processing


Just like @vNote42 mentioned, this looks like a permission issue to me. Here are some guides that can help you.
https://www.veeam.com/kb2027
https://helpcenter.veeam.com/docs/backup/agents/protection_group_computers.html?ver=110

 

It is imperative that you take a look at the log as there could be other issues as suggested by @Mildur 


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