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Operations Menu - Create Returned Goods

Use this function when you need to return an Item to its Supplier. When you need to do this, open the Goods Receipt and select 'Create Returned Goods' from the Operations menu. For the function to have any effect, all changes to the Goods Receipt must first have been saved (use the [Save] button), and it must have been approved. An alternative method (providing you are not using the Original Cost on Returned Goods to Supplier option in the Cost Accounting setting and/or you are not using the Do Not Allow Return Goods From Order option in the Purchase Order Settings setting) is to is to open the Purchase Order from which the Goods Receipt was created and select 'Create Returned Goods' from the Operations menu. If you did not create the Goods Receipt from a Purchase Order, you will not be able to use the 'Create Returned Goods' function. In this case, you will need to remove the returned Item from stock using the Stock Depreciation register.

When you select the function, a new record will be created in the Returned Goods to Supplier register (in the Stock module). It will be opened in a new window, entitled 'Returned Goods to Supplier: Inspect'. This means that it has been created and saved and is being opened for amendment and approval.

The Returned Goods to Supplier record takes its information from the Goods Receipt: the default Quantity is that already received, providing it is still in stock. Any quantity that is no longer in stock (e.g. that has been delivered to a Customer) will not be included in the Returned Goods to Supplier record . If you are using the Original Cost on Returned Goods to Supplier option in the Cost Accounting setting, the value of the returned Items (visible on flip C) will be the Cost Price from the Goods Receipt (i.e. including Freight, Customs and other Extra Costs). If you are not using this option, the value will be calculated using the usual Cost Model (i.e. as if it was a normal removal from stock).

Enter the returned Quantity for each Item and remove any Items not returned by clicking on the row number to the left and pressing the Backspace key. You cannot enter a quantity greater than that originally received or remaining in stock (or remaining in stock if some of those originally received have been delivered to a Customer or otherwise removed from stock).

If the goods were returned because they were faulty (i.e. you require a replacement), choose to reduce the Received Quantity in the originating Purchase Order using the options on the right-hand side of the screen. Then, after you have approved the Returned Goods to Supplier record and when you receive the replacement Item, you can reopen the Purchase Order and create another Goods Receipt for the appropriate quantity.

Alternatively, you may have returned the goods to their Supplier without requiring a replacement (perhaps the Customer returned the goods to you and cancelled the Order). In this case, choose to reduce the ordered and received quantities. When you view the originating Purchase Order after approving the Returned Goods to Supplier record, both the Order Quantity and the Received Quantity will have been reduced. If the Purchase Order has been invoiced, selecting 'Create Purchase Invoice' from the Operations menu of the Purchase Order screen once again will create an Invoice for a negative quantity, effectively crediting the original Invoice. You can also credit the Purchase Invoice by opening that Invoice and selecting 'Create Credit Note' from the Operations menu (you can locate the original Invoice from the Goods Receipt or Purchase Order using the Attachments feature). This will create a Credit Note with appropriate Payment Terms and a reference to the Invoice being credited. An alternative method is to use the 'Create Credit Note' Operations menu function on the Returned Goods to Supplier screen, but you can only use this method if only one Purchase Invoice has been created from the Purchase Order.

When the Returned Goods to Supplier record is complete, click the OK check box. This signifies that the Return has been approved. Once this has been done and you have saved the Returned Goods to Supplier record, you will no longer be able to modify it. You will not be able to raise a credit Invoice for the goods that have been returned until the record has been approved. A stock transaction in the Nominal Ledger will be created if you have so determined using the Sub Systems setting in the Nominal Ledger and in the Number Series - Returned Goods to Supplier setting.

Please click here for a full description of the screen, including detailed information about any Nominal Ledger Transactions created when the Return is approved.

To close the screen and return to the Goods Receipt, click the close box. You will be asked if you want to save any changes. The Recv 1 and Recv 2 fields of the originating Purchase Order (visible on flip C) will be updated automatically (as will the Order Quantity on flip A if you have so chosen).