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INTRODUCTION TO RETURNS

In Compiere, items may be purchased or sold. In both instances it may be necessary to process returns from customers or to vendors for these items due to incorrect purchase, damage or any other reason. Some products may allow returns, others may not. There may also be different return rules for different customers and vendors. Returns may have associated fees which may be either a flat amount or a percentage of the original purchase price. There may also a time frame in which a return will be allowed.

Compiere provides the ability to define Return Policies and Return Categories to better control your return processing and to determine what items can be returned, or from which customers you will accept returns and which vendors will accept returns from you.

Customer Returns must be linked to the original shipment document to provide the proof of delivery. Optionally, you can link Vendor Returns to the original Material Receipt. This return may involve items that are damaged, not as ordered or simply not wanted. Depending upon the situation fees may also apply like re-stocking, handling or general return fees. The return process includes the ability track these returns, not only in regards to expenses and fees incurred but also to identify the orders associated and any 'habitual returners'. It is also used to identify issues or problems in internal processes, (e.g. shipping incorrect materials, improper packaging, etc.)

DEFINITIONS

RMA - Return Material Authorization - When a product is to be returned it is may be required that authorization is received prior to returning. This generally includes identifying the order or invoice from the original purchase and identifying any fees associated.

RTV - Return to Vendor - Similar to RMA but in regards to items purchased by a company.

ReStocking Fees - Fees assessed for returning materials.

Handling Charges - Charges assessed for processing a Return

ASSUMPTIONS

Costing for RMA and RTV will done at the current cost. Adjustments to the costing will not be performed.

Confirmations will be used to dispose of returns which cannot be re-sold.

Shipments created from RTV documents will not be evaluated in the generate shipments or generate shipments manual processes.

There are no accounting consequences for RMA or RTV document types. In the future there could be encumbrance accounting consequences.

Approvals can be implemented using Workflow..

RETURN PROCESS FLOW

Customer RMA

RMA Category

RMA Categories allow you to classify the reason for a return. This allows you to track possible problem areas like packaging if you were getting a large number or items returned because of damage incurred during shipment. RMA Categories are not required for processing returns, but can be used as a helpful analysis tool. To create or modify an RMA Category, open the RMA Category window from the Main Menu.


 

Provide a Name of the RMA Category in the Name field, followed by a description in the Description field and any comments in the Comment field.

Select the Active check box to indicate that this RMA Category is Active.

Click Save to use this RMA Category in Compiere..

Return Policy

Return Policies allow you to set rules for when a return is allowed. These policies are then associated with Customers and Vendors For example, you may accept returns from any customer within 30 days of shipment, but for some specific customers you allow 45 days. You may also have certain products for which returns are allowed but for a shorter time frame. These scenarios can all be handled using Return Policy.

To create or modify a Return Policy, open the Return Policy window from the Main Menu.


 

Provide a Name of the Return Policy in the Name field, followed by a description in the Description field.

Select the Active check box to indicate this Return Policy is active.

Select the Default check box to indicate that this Return Policy should be used as the default Return Policy. If no Return Policy is defined for a specific Customer or Vendor, the default Return Policy will be used.

Then enter a value in the TimeFrame (in days) field for which returns will be allowed. If a 0 is entered, that indicates that returns are not allowed.

Use the Return Policy Line tab to set specific return policies for products or product categories.


 

Optionally enter a Description for this Return Policy Line

Select a Product Category or a Product for which this Return Policy line will apply.

Enter the TimeFrame (in days) for which returns will be allowed. If a 0 is entered, that indicates that returns are not allowed.

You can have as many Return Policies as necessary. Once defined, they are selected in Business Partner Groups and for Business Partners on the Customer and Vendor tabs.

For additional information on Business Partner Groups and Business Partners, refer to the Business Partners Chapter.

Customer RMA Window

Customer RMA defines the items that a customer has requested return authorization for. The RMA must be linked to a Sales Order and Customer Shipment. This ensures that returns are authorized only for those items that have been shipped. Information from the original sales order including: payment term, project, campaign, etc. are copied to the Customer RMA where they can be modified if necessary. In addition, the Customer RMA window displays the Original Order including BP info, Payment method, Price List (for currency), and payment term.

To create or modify a Customer RMA, open the Customer RMA window from the Main Menu.


 

Select a target document type from the Target Doc Type drop down list box. If document numbering is set, the Document No will be populated.

Additionally, select the RMA Category if appropriate.

Enter or select the Original Sales Order the product for this Customer RMA was purchased on. This will also populate the remaining fields in the window with the exception of the Original Shipment.

Enter or select the Original Shipment on which the product was delivered.

Accept the default of the current date for the RMA Date or change it if appropriate. It is the number of days between the RMA Date and the Ship Date that will be used to determine if the Customer RMA conforms to the Return Policy for this Business Partner. If it is outside of this range, you cannot save the Customer RMA. If the Role you are using indicates that the Return Policy can be overridden, the document can be saved after the warning message.

For more information on Roles, refer to Security Chapter.

The fields copied from the Original Order (Payment Method, Payment Term, Project, etc.) can be updated if necessary.

RMA Lines

Select the RMA Line to define the specific products to be returned.

The RMA Line items displays the Original Shipment Line and Shipment Date.

Note: The Date must be within the range of allowed return dates based on the return policy for the Business Partner.

Select the Original Sales Order Line. Note that the list is restricted to the lines that were on the Sales Order. This will also populate the Product field.

Select the Original Shipment Line. This list will be restricted to the lines for that specific Product for the Shipment defined on the header.

Enter the desired Quantity. The system will prevent a quantity that is greater that the quantity shipped on the selected shipment line.

Add additional lines as appropriate.

Once the Material is received from the customer and the RMA is complete; a Material Receipt is created from the RMA. Confirmations may be linked to the Material Receipt to allow for disposal, movement back to Inventory, or if no confirmation is used, the item is returned to inventory (if it is a stocked item.)

An Accounts Receivable Credit Memo is created upon completion of the Customer RMA for a POS or Credit Order. For Standard or Warehouse Orders you must enter a Customer Return document and generate the Credit Memo via the Generate Invoice Manual or Batch process.

For more information on Credit Memo, refer to the Credit Memo section offered later in this chapter.

The following points should be considered when creating and processing RMAs:

  • The Item must be included (or not excluded) in the return policy for the Business partner.
  • The Price is from the original Invoice (less any discounts take on payment.)
  • Any appropriate taxes are added based on the original taxes paid.

For more information on Return Credit Memo, refer to the Return Credit Memo section in this chapter.

Return to the Customer RMA header to and complete the document.

Customer Return

To enter a Customer Return, open the Customer Return window from the Main Menu.


 

Select the RMA in the RMA field. This will populate the remaining fields in the Customer Return, including the Business Partner information, with the exception of the Document Type information.

Select the correct Document Type in the Document Type field, (i.e., MM Customer Return or MM Customer Return with Confirmation.)

Save the record and select the Return Line to specify the products returned.

Return Lines

Open the Return Lines tab to view Item and original purchase price and any fees that may apply.

Select the RMA Line. This will populate the remaining fields.

The Locator defined is based on the Locator of the original shipment. If you bring your returns into a separate warehouse locator for inspection you may want to change the locator at this time.

Enter the appropriate Quantity. The system will ensure that the quantity entered on the Customer Return does not exceed the quantity on the Customer RMA.

When all products have been entered, return to the Customer Return header and complete the document.

When the document has been completed inventory will be adjusted (incremented) to account for the return products.

If the items will not be returned to stock because of damage for example, use the Return with Confirmation document type and dispose of the damaged product in the confirmation process.

Confirmations are covered in more detail in the Sales chapter.

Confirmations

Click the Create Confirmations button to create a confirmation for this Customer Return.

Any confirmations generated must be processed (confirmed) before you can complete this Customer Return.

Return Credit Memo

The Credit Memo associated with a Customer Return can be generated using the Generate Invoice Batch or Generate Invoice Manual process discussed earlier in this chapter. This is necessary if the base document type for your return is a Standard or Warehouse Order. If your base document type is a POS or Credit Order, the Credit Memo will be created once the Customer RMA is completed.

If you want to include charges on the Credit Memo, (i.e., restocking or handling fees), select Prepared as the status for the document when generating the Invoice. You can then add any appropriate charges to the Credit Memo and the complete it.

Complete Customer Return

Click the Complete button to complete the Customer Return.

Verify that the Document Action is set to Complete and click 'Ok' to continue.

Return to Vendor

Vendor RMA Window

You can access the Vendor RMA window from the Main Menu.


 
Provide a Target Document type in the Target Document type field.

Select the RMA Category.

Include the Original Purchase order and the Original Receipt.

Enter the RMA Date in the RMA date field.

Include the Business Partner information.

RMA Lines

Click on the RMA Lines Tab to add, modify, or view the RMA Line Items.

The RMA Line items displays the Original Shipment Line and Shipment Date.

Note: The Date must be within the range of allowed return dates based on the return policy for the Business Partner.

The following points should be considered when creating and processing RMAs:

  • The Item must be included (or not excluded) in the return policy for the Business Partner.
  • The Price is from the original Invoice (less any discounts take on payment.)
  • Any appropriate taxes are added based on the original taxes paid.

Return to Vendor Window

You can access the Return to Vendor window from the Main Menu.


 
The RTV window includes the Original Purchase Order (if used) including BP info, Payment Method, Price List (for currency), Payment Term. In addition, the RTV includes the Original Invoice number and any control id provided from the vendor.

Return Lines

Click on the Create Lines From button to create the Return Lines for this Vendor Return.

Open the Return Lines tab to view Item and original purchase price (linked from Invoice) and any fees that may apply.

Once the Vendor Return is complete the Shipment is generated and Material is shipped to Vendor.

In addition, the confirmations are linked to the shipment to confirm receipt by Vendor and an Accounts Payable Credit Memo is created upon completion of the Shipment.

Credit Memo

Click on the Generate Credit Memo button to create an invoice based on the selected receipt and match the invoice to that receipt. You can set the document number only if the invoice document type allows setting the document number manually the Return Lines for this Vendor Return.

Select the correct Price list from the Price List drop down list.

Provide the correct invoice document number in the Invoice Document Number field.

Click 'Ok' to continue.

Complete Vendor Return

Click on the Complete button to complete the Vendor Return.

Verify that the Document Action is set to Complete and click 'Ok' to continue.

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