Sales - A/R:

Returns and Exchanges

SAP Business One
Version 10.0

PUBLIC
Objectives

At the end of this topic, you will be able to:

 Describe the options for handling issues that arise from deliveries
 Returns
 Redeliveries
 Exchanges
 Create a Return Request to provide return material authorization for
a damaged item
 Copy the Return Request to a Return to bring the item back into
stock and give a credit to the customer

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Business Scenario

 To increase customer satisfaction, the company has a liberal policy for returning
items for replacement, exchange, or credit.
 When problems arise from the delivery, a Return document is used to give credit or
to provide an option for redelivery from the original sales order.
 A Return Request can be used to provide a customer with authorization for
returning an item and to document the reason for return.
 Sometimes the customer wants to return an item to exchange it for a different item.
In those cases, the option for negative rows on a sales document can be used to
return an item and exchange it for another.

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Options for correcting delivery issues

Return
Sales Order Delivery Return
Request

Redelivery for Exchange via

replacement items negative rows

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Return

 A Return allows you to reverse the effects Delivery

of a Delivery
 Partially
 Fully
 When you reference the original delivery,
the Return reverses the stock transaction
 If an A/R Invoice exists, you cannot use a
Return.
Return

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Effect of a Return

Cost Account Sales Return

50 50

Warehouse
(Quantity)

General Ledger
(Value)

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Return Request

Delivery Return

Return
Request

A/R Credit
A\R Invoice Memo
Use the Return Request to:
• Handle items returned at any point in the
sales process
• Give the customer a reference number
for returning the item and document the
reason for return
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 Return Material Authorization (RMA) Example

 We ship the customer a quantity of Delivery

5 keyboards
 The delivery creates a journal entry for the Cost Account Stock Account
decrease in inventory value and the 50 50
cost of goods sold.
 The customer asks to return the 5 keyboards.
We copy the Delivery to a Return Request.
Return
 The customer sends the item and references the Request
Return Request (RMA) number
 When the item arrives, we create a Return from
the Return Request.
Return
 A journal entry is automatically created to record:
 Credit to the cost account for the full amount
Cost Account Sales Return
 Debit to the sales returns account
50 50
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Inventory Effect for Return Request and Returns

Before the delivery, 20 keyboards

were in stock. In Stock Committed Ordered Available

15 15
Delivery

Return 15 5 20
Request

20 * 20*
Return

* If there were a preceding sales order and the setting allowed redelivery, a quantity of 5 would be added
to the Committed column and the Available quantity would be reduced by 5.

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 Redelivery

 A redelivery can be created for a  The option to allow redelivery can be

sales order after items are chosen by a user or set to occur
returned. automatically.
 Option exists to reopen a sales  Redelivery reduces the need for
order. duplicate orders.
 The open quantity of an item is  Subsequent deliveries are easier and
increased by the returned quantity more transparent.
in sales order.

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Redelivery Example

Initial Sales
Process Sales Order:
Status: Closed
Open Qty: 0
Sales Order, Qty. 10 Delivery 1 Qty. 10

Return
(Based on Delivery) Sales Order:
Status: Open
Open Qty: 3
Delivery 1 Return, Qty. 3

Subsequent Delivery
of Open Quantity Sales Order:
Status: Closed
Open Qty: 0
Sales Order Delivery 2 Qty. 3
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Prerequisites for Redelivery

Enable redelivery functionality in the

Document Settings window for sales
orders.

An option is available to always

allow the reopening of the original order
without user confirmation.

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Exchanges by negative rows

 Make corrections directly in a marketing document without

a credit memo
 Negative rows can be added to marketing documents in
both sales and purchasing.
 Example: customers can get a credit for sending back
packaging while ordering more items.

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Exchange example

 The customer orders 5 batteries

 The customer discovers the batteries are not the correct kind
 The customer wants to exchange batteries
 Create a delivery to ship out the correct batteries
 Add a negative row to return the incorrect batteries

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Summary of options for returns and credits in sales

Issues Suggested Solutions

Incorrect entry of Delivery Cancel Delivery
Sales Order reopens to create new Delivery
Need to return item(s) received on a Copy item(s) from Delivery to a Return Request
Delivery but not yet invoiced Then copy to Return
Need to return or credit item(s) invoiced Copy item(s) to a Return Request
on an A/R Invoice but yet not paid Then copy to an A/R Credit Memo
If no stock movement is desired use Without Qty posting
Need to return items that have already Create A/R Credit Memo without reference
been invoiced and paid or need to credit If no stock movement is desired use Without Qty posting
items from multiple A/R invoices

Want to have credit lines in a delivery or Use negative rows

invoice

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Summary

Here are some key points:

 A Return Request can be used to begin the process of handling customer returns.
Create the return request from either a delivery or an A/R invoice. When you use Copy
to, the system will automatically choose the correct document for giving a credit and
returning the item to inventory.
 The Return document is used to process items returned from a customer after a
delivery. It allows you to reverse the stock postings and any related accounting postings
of a delivery either partially or fully.
 An option exists to reopen the related sales order for redelivery when posting returns.
Configuration for this option is set in document settings for the sales order.
 Another option for correcting deliveries and managing exchanges is negative rows.
Negative rows are available in marketing documents in both sales and purchasing.

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