8.8. Procurement Returns

This chapter describes how operations resulting from a vendor return are registered. The return is the opposite to the procurement transaction but uses the same product data (lot, series, quantity, price etc.). Returns are governed by a set of rules named "RMA Policy", based on which a return transaction may or may not take place. The rules are defined by the following entities:

1. RMA Categories - through which multiple RMA types are defined for future analysis. Defining RMA categories is at the organization's discretion. Examples include:

   • Vendor RMA - quality issues

   • Vendor RMA - defects

   • Customer RMA - quality issues

   • Customer RMA - N/A

   • etc.

2. Return Policies - through which the time period allowed for returns is determined (starting with the receipt date). A fixed number of days can apply to most products and specific periods can be defined for other products, as described by the applicable legislation.

Vendor RMA

Vendor return orders are defined in the Vendor RMA window, located in the Procurement -> Receipt menu, and are the first step in registering a vendor return. Vendor RMA's link the return with the document it is based upon. The return order has no accounting implications. The following fields are available:

• Target Doc Type - select from the list "Vendor RMA";

• RMA Category - select category from the list. Categories are defined in the RMA Categories window;

• Org Purchase Order - select the order on which the return is based;

• Org Receipt - select the receipt on which the return is based;

• RMA Date - date when the return is registered;

• Receipt Date - date when the associated receipt was made;

• Business Partner, Location, Contact - the business partner to which the return is made;

• Bill To, Location, Contact - the business partner that will be invoiced for the return;

• Return Policy - displays the return policy (determines the period in which the the products can be returned);

Delivery section - select the warehouse from which the return is made;

Invoicing section:

• Price List, Currency - displays the price plist and currency used for the procurement transaction;

• Representative - the person responsible for the vendor return;

The Reference section contains accounting dimensions used for analysis, determined by the accounting schema. Details in Accounting.

The Status section displays information about the document status (according to the document workflow):

• Document Status - indicates the current status for the document. To change the status press the Document Action button:

  • "Complete" will process the document. A processed document can no longer be edited;

• Document Type - indicates the document type (determines the status sequence and processing rules);

• SubTotal - total value for the document details;

• Grand Total - displays the total value for the order, including taxes;

• Copy Lines - allows you to copy details from a previously entered purchase order.

In the RMA Line tab contains the details containing products that will be returned. For each line, the following fields are available:

• Select from the the associated lines from the source documents, based on which the product is automatically selected:

  • Org Purchase Order Line - source order line;

  • Org Receipt Line - source receipt line;

Quantities section:

• Quantity, UOM - select the return product quantity (cannot be more than the receipt quantity);

• Quantity (base UOM) - the selected quantity in the base unit of measure;

• Quantity Returned - displays total returns for this product;

• Quantity Invoiced - displays the invoice quantity (if a matching return invoice has been processed);

The Amounts section displays product price information. Also this section contains accounting dimensions used for analysis, determined by the accounting schema. Details in Accounting.

The Status section contains the Net Value field which displays the total value for the line (Quantity * Price), excluding taxes.

Return to Vendor

In the Return to Vendor window from the Procurement -> Receipt menu the returns can be entered, based on a vendor RMA. The following fields are available:

• Document Type - select from the list "MM Vendor Return"

• Movement Date - date when the return is registered;

• Account Date - date when the corresponding accounting transaction is registered;

• Business Partner, Location, Contact - the business partner to which the products are returned

• Warehouse - the warehouse from which the products are returned

• Priority - select from the list a document priority level;

• Representative - the person responsible for the return

• Create Lines From - process used to enter return to vendor details;

• Generate Credit memo - process used to generate a return invoice;

The Reference section contains accounting dimensions used for analysis, determined by the accounting schema. Details in Accounting.

The Status section displays information about the document status (according to the document workflow):

• Date Received - date when the return was processed;

• Receipt Match Requirement - select a document type that must be matched with the return;

• Create Confirmation - the process generates confirmations for the return. Confirmations are documents that must be processed before to processing the receipt. Details in Shipment confirmations;

• Movement Type - indicates the document type (determines the status sequence and processing rules);

• Document Status - indicates the current status for the document. To change the status press the Document Action button;

• In Transit - the stock movement is "in transit" - delivered and not received (for drop shipments);

The vendor return unloads stock and affects vendor account payables. Cancelling a vendor return cancels the initial effects and returns stock to initial values.

Returns details are entered using the Create lines from process (also used to match the return to a Vendor RMA):

• Select the business partner to which the products are returned;

• Select the vendor RMA on which the return is based;

• Select the return lines. You may select all the lines or individual lines only;

• Select the warehouse locator from which the return is made;

• Press Ok.

The return details can be viewed in the Return Line tab. Quantities for the returned products can be modified but cannot be more than the receipt quantity.

Receipt-Returns Posting Rules

The general rule is that the receipt is valued with the purchase order currency at the exchange rate from the receipt's date!

In the case of "temporary imports", the return is valued at the same exchange rate as that of the original receipt. Therefore, the receipt posting rule is that the receipt will be valued at the exchange rate from the purchase order date, strictly for returns, as such:

- only for those receipts marked with "Receipt Match Requirement" = "Purchase Order"

AND

- only for those receipts that have negative transactional quantity (with minus) (we include both situations here: those manually operated with minus and those generated from the RMA with a + but, in fact, diminish the stock).