SAP Advanced Returns Management Tutorial - Free SAP SD Training

9/15/21, 12:03 AM SAP Advanced Returns Management Tutorial - Free SAP SD Training
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SAP Advanced Returns Management
Written by Feliyanus Gea and last updated on August 30, 2018.
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Welcome to the tutorial about SAP Advanced Returns Management. In today’s world,
the company is expected to have a reliable after sales process which includes
complaints processing, repair, and return processing. There is an old phrase which is
still relevant in the business world, “customer is the king, and service wins the game.”
Making new sales every now and then is good, but to retain the current customer is
also crucial.
Because the customer expects high quality products, the return process is also
expected as a service process which will be handled transparently, efficient with an
immediate refund process.
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We have learned that customer returns could be processed in SAP by creating separate documents (return order,
return delivery, return stock, credit memo, etc.). However, this is not sufficient because we can lose track in regards
with the follow-up documents. Also, if we face a complex situation which involves third-party supplier, the efficiency of
the process will become an issue.
SAP Advanced Returns Management integrates the whole process from creation of a return order, to inspection
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management, followed by creation of a credit memo. SAP Advance Returns Management has two types: customer
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and supplier return. This tutorial will only address the customer return process.
https://erproof.com/sd/free-training/sap-advanced-returns-management/ 1/20
This tutorial assumes you have familiarity with SAP terminologies especially with Sales and Distribution module. You
should have basic understanding how to create order to cash process followed by complaint handling processing
creation (credit memo / debit memo / invoice correction request). This tutorial is part of our SAP SD course.
You also should make the prerequisite customizing in SAP Advanced Returns Management via:
1. IMG – Sales and Distribution – Sales – Advanced Return Management

2. IMG – Logistics General – Advance return Management
SAP Advanced Returns Management Features
What are the features of SAP Advance Returns Management? What makes it advanced compare to its brother, the
“regular” returns processing? Let’s have a look for the general process flow first.
SAP Advanced Returns Management General Flow
The Return Order is the main entry point. The data entry will be integrated once you save the Return Order
document. The Delivery Order will be also created automatically.
The warehouse inspection will be done based on the value setting from the return order.
The logistics follow-up documents will be created automatically (goods receipt, goods issue document, etc.).
Customer refund will be processed faster through a credit memo (which you will define at the return order
creation).
We can monitor the whole customer return process via a single transaction code that has statuses for each
process plus the tree process of each item.
SAP Advanced Returns Management Step by Step
In this section, I am going to explain how to create the whole SAP advanced returns order process with a simple
scenario. A customer wants to return the goods he already bought because they don’t have more space for the
remaining item. He decided to return the material by himself to our premise (one of the sales counter). The sales
representative will be immediately advised to create a refund for this process.
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Run the transaction VA01 and select the Advance Returns document type, along with its sales area.
Select Correct Order Type, Then Fill in Sales Area
Click on the “Create with Reference button”, and input the billing document number, click the “Copy” button.
Select the Bill. Doc. Tab, fill in the Referenced Document, Click Copy Afterward
In the Overview Screen, you will be redirected to “Returns” tab, and let’s have a look at the Return Control and item
details. There are several fields that should be filled which will determine next actions.
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SAP Advance Return Document Overview
1. The return reason is a predefined selection list that you have set before. This field is similar to Order Reason field
we which we often encounter when working with debit/credit memo request documents.
2. Follow-Up Activity contains predefined selection list that will determine the following document after you save the
advance return document. Each selection will carry different document / scenario, so be aware of your choice. In
my example, I selected the “002 Immediate Move to Free Available Stock.”
3. The Material Received indicator indicates that the item material has been received during return processing.
4. Refund Type field will specify what type of refund the customer receive. The system provides two types, credit
memo (monetary compensation) or replacement material.
5. Inspection Code is used to specify the quality of the returned material which will be determined during the
inspection process.
6. Inspection Command Line is a free text, you can enter anything here.
As you can see above, these fields will be applied to the line item material. Run the Incompletion Log for a good
measure. Save the document afterwards.
Document is Complete
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Save the document and you
Stopwill havethis
seeing the ad
SAP advance
Why this returns
ad? document.
New Document is Generated
Now, let’s run the transaction MSR_TRC_C (yes, it’s that long). It is used to monitor the return process and which
documents have been created for each process.
SAP Return Overview Screen
1. Input your name here.

2. Fill / select the Return Order Type (I’m using ZRE2).
3. The list of created documents will be displayed. Select / highlight the desired document.
4. Click on the “Display Items” button.
5. Line items for the document will be displayed.
6. These are the return steps which are determined by the configuration we made prior in the advance return order
document.
Let’s see the comparison between the “Return Steps” versus the advanced return order we made before.
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Return Steps on Return Overview Screen are Based on Return Order
1. The Warehouse Inspection is automatically created because I selected the “Inspection Code” OK.
2. Logistical Follow Up document (Posting to Unrestricted Use) is done automatically based on the Follow Up
Activity, “Immediately move to…” in the return order.
3. Return Delivery is automatically created based on the return order.
4. Goods Receipt is generated automatically because I ticked of “Material Received”.
5. Credit Memo is generated automatically due to setting in refund control, “Immediately.”
SAP Advanced Returns Management with Complex Scenario
Consider the previous section as a warm up because in this section I am going to explain another scenario which
involves more steps and more manual documents created due to different roles with different tasks. Here is an
overview of a scenario with all the documents related to this complex SAP advanced returns management process.
Document Type Person in Charge Comment
Adv. Return Order Manual step Sales Admin
Return Delivery Automatically generated – Based on Return Order
Created when material

Posting Goods Receipt Manual step Warehouse staff
arrives in warehouse
“Ship to Vendor” setting in

Warehouse Inspection Manual step Quality Assurance Staff return order will trigger
Return Purchase Order
Created after warehouse

Return Purchase Order Automatically generated –
inspection
Invoice Verification Manual Step Accounting
Outbound Delivery to Based on setting in return

vendor and Posting Goods Manual Step Warehouse Staff order (“After receipt of
Issue Credit Memo from Vendor”)
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Credit Memo Stop seeing
Manualthis
stepad Why this ad? Accounting
Now, let’s see how this works in SAP ERP system. Create a Return Order based on the reference billing document.
Create Return Order Overview Screen
1. Input the return reason. For this example, customer return five pieces because they are damaged.
2. Since the item material was bought from an external vendor, the follow-up activity would be to send it to the
vendor.
3. We are going to provide payment as the refund for the customer.
4. We will give a credit memo to the customer after we receive a credit memo from the vendor.
5. The Inspection Code is “Not OK”. It will be processed in our warehouse later on.
6. The following comment from inspection code.
7. The vendor that we will ship the material to.
Now run the transaction MSR_TRC_C to monitor the return process.
SAP Returns Process Overview Screen
1. Enter the return order document.

2. Select the header and display the item.
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3. The tree of all the processes. As youby
can see, the process stops at the delivery order return creation.

Now, run the transaction VL02N and enter Storage Location (return Storage Location obviously), picking quantity and
do Post Goods Receipt.
Returns Process Overview Screen
Let’s go back to the MSR_TRC_C transaction and look up the next process.
After Material is Received, QA Staff Need to Inspect the Goods
Run the transaction MSR_INSPWH, enter your plant and click the execute button.
Initial Screen for MSR_INSPWH. Enter Plant and Execute It.
Look below for each order. First, you should select the inspection code, enter your comment there, enter the
inspection date, and mention the person responsible for doing the inspection. The “Logistical Follow Up” is
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determined based on the prior return order setting. Afterwards, click the “Save and Confirm” button.
Entry the Necessary Fields as Pointed by the Numbers Above
Let’s go back to the transaction MSR_TRC_C and we can see the screen below. The system automatically created a
Returns Purchase Order.
The Following Returns Purchase Order is Triggered by Inspection Document
Let’s process the return purchase order in the transaction ME22N.
1. Select the correct combination for the purchasing area.

2. Enter the price for this material.
3. Input the RMA Supplier (same with vendor code).
4. Save the document.
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Purchase Order for Vendor Return
Go back the transaction MSR_TRC_C. Next, we are going to perform goods issue to the vendor.
Return Purchase Order Saved! Now, Do Goods Issue to Vendor
To create posting of goods issue to vendor which is based on the purchase order, run the transaction VL10B and
insert the shipping point and the purchase order number. Then, execute it.
Select the Shipping Point and the Purchase Order Number
Now, select the line item with our document and click “Background” button.
Select the Line Item and Click on the Background Button

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Green Light Means the Document is Successfully Processed
Return to the transaction MSR_TRC_C and you will see a new delivery order document is created. Now, posting
goods issue in the transaction VL02N.
Outbound Delivery Created
Entry Picking Quantity and Click Post Goods Issue Button
Now, in the MSR_TRC_C transaction, you can see the remaining step of the returns process is a credit memo to
vendor.
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We are
Stop seeing this ad Whygoing to create
this ad? the credit memo
After the material arrives to the vendor’s premises, we are going to post an incoming payment with a credit memo
document. This is a credit memo for the vendor and it is different from customer credit memo that we discussed in
previous tutorials. Run the transaction MIRO, select the Credit Memo transaction and enter amount for the credit
memo. Click Save button.
Enter Document Date and Amount
New Vendor Credit Memo has been Created
We are done our business with the vendor. Now, we return to our beloved customer because we are going to give
them credit memo to reduce their account receivable after we received the credit memo from the vendor (remember
the setting from the return order?).
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Last but not Least, Credit Memo for Customer
Run the transaction VA01 and create a credit memo request by referencing the return order.
Input Sales Area, Enter Referenced Document, and Click Copy
Release the billing block, fill out the Order Reason, and save the document.
Release Billing Block and Go to “Sales” Tab
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Enter Order Reason and Save the Document
Release the billing block, fill out the Order Reason, and save the document. Finally, run the transaction VF01 and
create a credit memo request document based on this return order.
Credit Memo for Customer
Go to the transaction MSR_TRC_C and check that all processing statuses are now completed and all the lights are
green.
The Complex Process of SAP Advanced Returns Management is Now Finished
Common Questions for SAP Advanced Returns Management
Q-1: How to return material from external vendor?
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A-1: In the Follow-Up Activity field, you may use the “0005 – Ship to Vendor” during Return Order creation. The return
Purchase Order for that vendor will be created.
Q-2: What about plant? How can I make the scenario of return to plant within company?
A-2: Yes, this is also possible. Select the designated follow-up activity in the return order. Just be aware that not all
the subsequent document will be created. Depending on the configuration and business process, you need to monitor
the process.
Q-3: I want my Quality Assurance (QA) team to do the inspection manually and I want it to have a different code to
determine any justification for the returned goods. How to achieve it?
A-3: First, you have to define the inspection code and assign it to the profile. Then, to do the inspection manually, just
leave the “material received” indicator blank. You will need to run MSR_INSPWH transaction separately.
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Did you like this tutorial? Have any questions or comments? We would love to hear your feedback in the comments
section below. It’d be a big help for us, and hopefully it’s something we can address for you in improvement of our free
SAP SD tutorials.
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17 thoughts on “SAP Advanced Returns Management”
Jasse Sen
September 14, 2018 at 12:43 pm
Fantastic. You made so many consultants day. Amaizing document. I will role this our for my client
Raquel de Miguel
November 20, 2018 at 6:09 pm
Hi,
Exist some report standar to can see the information to MSR_TRC_C in list form?
Thanks!!
Chandrashekhar Thombare
January 14, 2019 at 10:46 am
This is for returns management from Customer to Vendor. But what about the return management system for
managing complete cycle of returns from pick up to inward to segregation/ grading to bulk sale or disposal. How can
we get the real time serial number level information or visibility across all DCs to effectively manage and control these
returns.
Returns generated from end customer, transit damages, under DOA policy or outside DOA policy. How to control
these and what provision do we have in this system.
My challenges as a Large Format Retailer are as follows
1. No visibility of information (serial number level) on status pending at DCs.
2. No system integration with Brands for returns management, manage information.
Suresh
May 15, 2019 at 10:58 pm
Many thanks, it is really nice document. I cracked many of our existing issues in ARM looking through your doc.
6
June 3, 2019 at 9:51 am
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Frank
June 26, 2019 at 9:05 am
Hi. Great job. Tks a lot. Really very helpful. May can you let me know in which SAP teaching lesson this topic is
based? Tks a lot one more time…..Frank
Sanjay Dey
June 28, 2019 at 5:13 pm
Nice details step by step document . Thank you
Ajay
July 15, 2019 at 1:41 pm
Its really nice document. it will really help us in understanding the advance return process.
Thanks a lot for your efforts making this kind of documents
sadanand
July 19, 2019 at 8:09 am
Thanks for Sharing…its really helpful document..
Suresh
HI,
It is definitely a good document for consultants and end users.
I am working with the S4 Hana latest version were we have the Refund Code on the Returns Tab This is a great field
where, we can link the deduction code / amount to the inspection code. The point no where i find any document or
material which says how to link this code with Pricing procedure.
Dileep
February 3, 2021 at 10:59 pm
Dear Suresh,
Any suggestion on linking between Refund Code link with pricing?
Sundar Munirathinam
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Hi
I am doing cross-company store return. I don’t want the inspection step. I want to create credit memo directly after
goods receipt at the DC. But VF01 fails to create credit memo with an error, “inspection not closed, billing not closed”.
How do I deactivate the inspection step?
Thanks,
Sundar
Jayant
October 17, 2019 at 11:58 am
Issue:
Cost not updated to PGR accounting document in return delivery from billing document.
Steps:
SO-Delivery-PGI-Invoice-Return Order-Return Delivery-PGR
I have MTO material in my SO and EK02 got updated from SO costing. Costing got updated in PGI accounting
document and same appear in invoice VPRS. Now customer return material, with advance return management we
created return order but here VPRS value not copied from invoice but have EK02 value. Requirement is cost should
update to PGR accounting document.
Kindly please suggest.
Diego Neila
December 11, 2020 at 1:33 am
Hi All,
Similarly to the comment from Sundar Munirathinam, I would like to deactivate the inspection check. This requires
always to go to transaction MSR_INSPWH to enter the inspection results. Otherwise it is preventing me from issuing
the intercompany billing document in transaction VF01. Error message is VF 353 “Inspection not closed, billing not
possible.”
Another option could be that of marking as optional the inspection step of my scenario in the view
MSR_V_STEP2SEQ. However, this does not seem to fix the problem either.
In the explanation it is said that setting the inspection code to “0001 OK”, this makes “The Warehouse Inspection is
automatically created”, as opposed to “0002 Not OK”, which requires the inspection to be done manually by the
warehouse. How is this differentiation achieved, is there a setting in the inspection code itself or is it any other
configuration that is to be set?
Please advise.
Diego Neila
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Venkat
January 14, 2021 at 7:41 am
How to do Reversal in Advanced Returns. We can use VL09 and do the Reversal for Return Delivery.
User entered wrong plant in Advanced Return order, Inspection and Follow up, Return Delivery created. Need to do
the Reversal
Murali
April 9, 2021 at 12:16 pm
Hi Is there any BAPI or standard FM for the Tcode: MSR_INSPWH, because I need to automate this process.
Girish
July 12, 2021 at 5:31 pm
Feliyanus Gea,
Can i enable the Virtual Goods receipt and Goods issue in case of “Direct shipment to Vendor” ?
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9/15/21, 12:03 AM SAP Advanced Returns Management Tutorial - Free SAP SD Training

Home » SAP SD » SAP SD Training » SAP Advanced Returns Management

SAP Advanced Returns Management

Written by Feliyanus Gea and last updated on August 30, 2018.

1. IMG – Sales and Distribution – Sales – Advanced Return Management

SAP Advanced Returns Management Features

SAP Advanced Returns Management General Flow

SAP Advanced Returns Management Step by Step

Select Correct Order Type, Then Fill in Sales Area

SAP Advance Return Document Overview

New Document is Generated

SAP Return Overview Screen

1. Input your name here.

Return Steps on Return Overview Screen are Based on Return Order

SAP Advanced Returns Management with Complex Scenario

Document Type Person in Charge Comment

Adv. Return Order Manual step Sales Admin

Return Delivery Automatically generated – Based on Return Order

Created when material

“Ship to Vendor” setting in

Created after warehouse

Invoice Verification Manual Step Accounting

Outbound Delivery to Based on setting in return

Create Return Order Overview Screen

Now run the transaction MSR_TRC_C to monitor the return process.

SAP Returns Process Overview Screen

1. Enter the return order document.

Stop seeing this ad Why this ad?

Returns Process Overview Screen

After Material is Received, QA Staff Need to Inspect the Goods

Initial Screen for MSR_INSPWH. Enter Plant and Execute It.

Entry the Necessary Fields as Pointed by the Numbers Above

The Following Returns Purchase Order is Triggered by Inspection Document

Let’s process the return purchase order in the transaction ME22N.

1. Select the correct combination for the purchasing area.

Purchase Order for Vendor Return

Return Purchase Order Saved! Now, Do Goods Issue to Vendor

Select the Shipping Point and the Purchase Order Number

Select the Line Item and Click on the Background Button

Green Light Means the Document is Successfully Processed

Outbound Delivery Created

Entry Picking Quantity and Click Post Goods Issue Button

Enter Document Date and Amount

New Vendor Credit Memo has been Created

Input Sales Area, Enter Referenced Document, and Click Copy

Release Billing Block and Go to “Sales” Tab

Enter Order Reason and Save the Document

Credit Memo for Customer

The Complex Process of SAP Advanced Returns Management is Now Finished

Common Questions for SAP Advanced Returns Management

Q-1: How to return material from external vendor?

Go to next lesson: Essential SAP SD Reports

Go to previous lesson: SAP Invoice Correction Request

Go to overview of the course: SAP SD Training

17 thoughts on “SAP Advanced Returns Management”

My challenges as a Large Format Retailer are as follows

1. No visibility of information (serial number level) on status pending at DCs.

2. No system integration with Brands for returns management, manage information.

Nice details step by step document . Thank you