Use a Purchase Item Credit Note for returns of goods or packaging materials, such as pallets or containers, if:

• The Purchase Order is fully processed.
• The goods are now in your inventory. 

When you raise a Credit Note in the Purchasing System, the Inventory System’s Quantity on Hand immediately reduces by the quantity quoted. However, the Supplier Account does not update until you post the Credit Note transaction. Therefore, the standard practice is to leave the Credit Note unposted until you receive the Supplier Credit Note. 

See:

Creating Purchase Item Credit Notes 

There are three ways you can deal with discrepancies between your Credit Note and the Supplier Credit Note.

Option One: Amend the Credit Note 

Recall the Credit Note for correction before posting it. If the discrepancies involve quantity, you can amend this now. The system will reverse the original Credit Note quantity as well as process the new quantity.

See:

Creating Purchase Item Credit Notes 

Option Two: Make Stock Adjustments

Make a Stock Adjustment immediately after the physical goods are returned. 

When you receive the Supplier Credit Note, process a Credit Note. If you are concerned about the delay in posting, process and post a Credit Note immediately. This updates both the Stock position and the Supplier Ledger. Then deal with any price differences or disputes, such as damages, using the system’s Journal facilities. 

See:

Creating Purchase Item Credit Notes 

Creating Batch Purchase Credit Notes 

Managing Stock Adjustments  

Creating General Ledger Journals 

Option Three: Cancel the Order

If the Purchase Order is still in process, cancel the Order in the Purchase Order system. If it is un-delivered this will cancel the full Order. However, if it is partially delivered this will only cancel the balance of the Order, so if you are returning the delivered Items to the Supplier, proceed as in option two.

Take account of this type of transaction when conducting an Inventory Check to ensure that Supplier Returns have been processed fully to ensure no miss-matches at the point of Stock Take.

See:

Creating Purchase Invoices (PO Process) 

Performing Stock Takes 

The system acts in the same manner as described for Suppliers but in reverse. 

If the Items have been delivered out of your Inventory, use the Sales Credit Note facility to log the goods back into your Inventory. You do not need to wait for further documentation. Post the Credit Note immediately which will update the Inventory and the Customer’s Account simultaneously.

Similarly, if the Customer’s Order has not been fully fulfilled you can cancel the remainder in the Sales Order Processing system. Proceed to invoice the delivered portion or take the partially delivered portion back into inventory and issue a Credit Note if required.

See:

Creating Sales Item Credit Notes

Using Sales Orders