When you send goods back to a supplier, two things need to be updated: 

• Stock levels: These reduce as soon as you raise a Credit Note, letting you record a return straight away.
• Supplier balance: This changes only when you post the Credit Note, letting you wait for the supplier to confirm their credit before updating your ledger.

The process you follow depends on order status:

• Open Order: You may be able to cancel the undelivered balance instead of processing a return. See Open Purchase Orders.
• Goods delivered: If the order is complete, raise a Purchase Item Credit Note. See Supplier Stock Returns.
• Discrepancies: If the Supplier Credit Note doesn't match yours, amend your Credit Note or correct the difference afterwards. See Supplier Discrepancies.

See:

📗 Purchase Order Process 

📗 Purchase Item Credit Notes

Use this process if the Purchase Order is still open, meaning some or all of the goods haven't been delivered yet.

Cancel the order in the Purchase Order system. See Amending Transactions for more information.

What gets cancelled depends on how much has been delivered:

• No delivery: The whole order is cancelled. No stock or supplier transactions are needed.
• Partial delivery: Only the undelivered balance is cancelled. Goods you've already received stay in stock and on the order.

If you also want to return goods that were delivered, cancel the undelivered balance first. Then follow the steps in Supplier Stock Returns for the delivered goods.

See: 

📗 Purchase Order Process

Use a Purchase Item Credit Note to return goods to a supplier when both of the following apply:

• The Purchase Order has been fully processed.
• The goods have been received into stock.

You can also use this method to return packaging, such as pallets or containers, if they are set up as stock items.

How a Purchase Item Credit Note affects your records

A Purchase Item Credit Note updates your stock and the Supplier Account at different times:

• Stock: Quantity on Hand reduces by the quantity on the Credit Note as soon as you raise it, before it is posted.
• Supplier Account: The Supplier balance changes only when you post the Credit Note.

Recommended process

1. Return the goods to the supplier.
2. Raise a Purchase Item Credit Note for the returned quantity, but do not post it yet. Your stock reduces straight away.
3. Wait for the Supplier Credit Note.
4. Compare the Supplier Credit Note with yours. If the quantities and prices match, post your Credit Note. If they differ, see Supplier Discrepancies below.

See: 

📗 Purchase Item Credit Notes

Sometimes the Supplier Credit Note doesn't match the Purchase Item Credit Note you raised. The quantity, the price, or both may differ, or the supplier may dispute part of the return. Choose the option that fits your situation.

Option One: Amend your Credit Note before posting

Use this option if you haven't posted your Purchase Item Credit Note yet.

1. Open the unposted Purchase Item Credit Note. 
2. Change the quantity and/or price to match the Supplier Credit Note.
3. Post the Credit Note.

When you change the quantity, the system reverses the original quantity and applies the new one. Quantity on Hand then reflects the corrected figure, so you don't need a separate stock adjustment.

📗 Purchase Item Credit Notes

Option Two: Post now and correct differences afterwards

Use this option if you don't want to wait for the Supplier Credit Note before updating the Supplier Account. It also applies if you have already posted your Credit Note.

1. Post your Purchase Item Credit Note straight away (if you haven't already). This updates both your stock and the Supplier Account.
2. When the Supplier Credit Note arrives, compare it with yours.
3. Correct any differences:
   • Quantity differences: The supplier may credit a different quantity from the one on your Credit Note. In that case you need two corrections:
     • Make a stock adjustment to bring Quantity on Hand in line with the quantity actually returned. (Only add units back if they're still in your stock.) See Adjust Quantity on Hand.
     • Post a GL journal to adjust the Supplier balance by the value of the difference. See Purchase Journals.
   • Price differences or disputes, such as damaged goods: Post a GL journal to adjust the Supplier balance. You don't need a stock adjustment if the quantity hasn't changed. See Purchase Journals.