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Create Menu - Sales Order - Returned Goods

This page describes the 'Returned Goods' function on the Create menu in the Sales Order record window. If you are using iOS or Android, the 'Returned Goods' function is on the + menu.

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If goods that you have delivered to a Customer are returned to you, you can bring them back into stock using the following methods:

  • Open the original Order against which the goods were delivered and select 'Returned Goods' from the Create menu (Windows/Mac OS X) or + menu (iOS/Android).

  • Open the Delivery and select 'Returned Goods' from the Create or + menu (you can open the Delivery from the Order through the Link Manager).
You must use the second method (i.e. you must create Returns from Deliveries) if you are using the Original Cost on Returned Goods option in the Cost Accounting setting in the Stock module, if you are using the option to insert Returned Goods at their original position in the FIFO/LIFO cost queue in the same setting, and/or you are using the Do Not Allow Return Goods From Order option in the Order Settings setting. If you are not using any of these options, but at least one of the Items on a Sales Order uses a Queued Cost Model (FIFO or LIFO) then again you must create the Return from the relevant Delivery.

The difficulty with the returning of goods to stock is to establish the actual cost (FIFO, LIFO or weighted average value) of the goods being returned. The purpose of the Returned Goods register is to allow you to record values that are as accurate as possible. For example, if you are using the Queued Cost Model (FIFO or LIFO) Cost Model, you should receive the Item back into stock with the same value as when you delivered it. If you are using the Weighted Average or Cost Price Cost Models, the Weighted Average or Cost Price may have changed in the time between delivery and return. Creating a Return from a Delivery will usually have more accurate results than creating it from an Order.

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

The Returned Goods record takes its information from the Order: the default Quantity in each row will be the quantity that you have already delivered (less any that have already been returned). Any Items on the Order with a delivery quantity of zero will not be included in the Returned Goods record. The default Item Cost will be the Weighted Average, Cost Price or percentage of Base Price of the Item, depending on its Cost Model If the Item uses a Queued Cost Model (FIFO or LIFO), you will need to create the Returned Goods record from the Delivery because Queued values are not stored in Orders.

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 (Windows/Mac OS X). If you are using iOS or Android, long tap on the row number on the left of the row and select 'Delete Row' from the resulting menu. You cannot enter a quantity greater than was originally delivered. If necessary, change the Item Cost to the true value of the returned Item (which will be shown on flip C of the original Delivery record), and/or enter an Extra Cost (any cost incurred in receiving the Item back into stock).

If an Item being returned is a Structured Item, you should list its components in the Return, not the Structured Item itself. Structured Items are built the moment the Delivery is made and are not kept in stock themselves. Therefore, they should not be included on a Return. Only the components should be listed on the Return: this will ensure they are correctly received back into stock.

If an Item being returned has a Serial Number, no Serial Number will be transferred from the Order to the Return. This is because the Serial Numbers of delivered Items are not all stored in Orders if the Order Quantity is greater than one. You must enter the correct Serial Number yourself on flip B. An alternative method is to create the Return from the Delivery, in which case the Serial Numbers will be transferred to the Return from the Delivery.

If the goods were returned because they were faulty (i.e. the Customer requires a replacement), choose to Reduce the Delivery Quantity using the options on the right-hand side of the window. Then, once you have marked the Returned Goods record as OK and saved, you can return to the Order and raise another Delivery for the appropriate quantity to fulfil the Order. In this instance you might choose not to update the stock levels and to treat the Items as written off, or you might choose to update stock levels and to write the Item off using a Stock Depreciation. If you need to return the Items to your Supplier, it is recommended that you update stock levels and then enter a Returned Goods to Supplier record (if you originally purchased the Items using a Purchase Order) or a Stock Depreciation record (if there is no originating Purchase Order).

Alternatively, the goods may have been returned without a replacement being required (perhaps the Customer cancelled the Order). In this case, choose to Reduce the ordered quantity and to update stock levels before marking the Returned Goods record as OK and saving. If the Order has been invoiced, you can credit the original Invoice using the 'Credit Note' function on the Create menu (Windows/Mac OS X) or + menu (iOS/Android) from the Returned Goods record. This will create a Credit Note with appropriate Payment Terms and a reference to the Invoice being credited. Alternatively, you can locate the original Invoice and select 'Credit Note' from the Create or + menu (you can locate the original Invoice from the Order through the Link Manager). In both cases, the Credit Note will update the invoiced quantity on flip D of the originating Order if you are using the Credit Notes Update Invoiced Quantity option in the Order Settings setting. You should not create the Credit Note from the Order by selecting 'Invoice' from the Create or + menu, as this will result in an Invoice with negative quantities, not a true Credit Note.

When the Returned Goods record is complete, tick the OK check box and save the record. This signifies that you have approved the Return. Once you have done this, 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 you have approved the Return in this way. 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 setting.

A possible method of working might be to generate a Returned Goods record when the Customer contacts you to send back the delivered Items. You can give the Number of the Returned Goods record to the Customer as a Returns Number. When the Items arrive, you can approve the Return: this will update stock levels accordingly.

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

To close the window and return to the Order, click the close box (Windows/Mac OS X) or tap < (iOS/Android). You will be asked if you want to save any changes. The Del. and Del. OK figures in the Order (visible on flip D) will be updated automatically (as will the Order Quantity on flip A if you have so chosen). You will need to close the Order and re-open it to see these changes.

You can use Access Groups to prevent certain users from creating Returned Goods reccords from Orders. To do this, deny them access to the 'Returned Goods from Order' Action.

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The Sales Order register in Standard ERP:

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