Direct order returns supported
You can now process direct order returns without affecting warehouse inventory, including on-hand quantity, margin, cost, and usage. New General Ledger accounts enable you to post amounts for direct order returns and direct order cost of goods returned separately from warehouse returns.
When a customer returns a direct order product to a vendor, you can create a return merchandise (RM) order in Sales Order Entry and identify it as a direct order return. You can also create a direct order return line on a stock order or copy an existing order to create direct order return. Records in Product Adjust Non-Stock/Direct Order Entry are created or updated based on the lines on the RM.
When you create a direct order return, you must specify a vendor type return reason and source the product from the vendor that received the return from the customer. A tied RM purchase order, which is identified as a direct order return, is then automatically created.
You can use Vendor Invoice Center Entry to process vendor invoices for credit. When you perform the final update, the direct purchase order is automatically received, and the direct order return is automatically shipped. You can also manually receive the direct purchase order in Purchase Receipt of Inventory Entry. After the direct purchase order is received, the tied sales order is shipped. After the sales order is invoiced, Product Adjust Non-Stock/Direct Order Entry is updated.
General Ledger accounts and postings
When you activate the direct order return feature, the Direct Order Return account becomes available to track direct order returns. Separately, you can enable the Cost of Goods Returned account for warehouse returns and the Dir Order Cost of Goods Returned account for vendor returns. Use the accounts to enter the cost of goods returned when the return is tied to the original order. You can specify the accounts in Product GL Distribution Setup, SA Operator Setup, and optionally, Customer Setup.
After the direct purchase order is received and the final update is performed, transactions are posted to Inventory Control accounts to remove the inventory cost amount from the balance sheet. After the direct order return is invoiced, transactions are posted to GL accounts for sales, returns, and costs of goods to reverse the sales of the direct order and the associated inventory cost. For example:
| GL account | Debit | Credit |
|---|---|---|
| AR - Control | 11.83 | |
| Direct Order Returns | 11.83 | |
| Dir Order Cost of Goods | 6.50 | |
| Dir Order Cost of Goods Returned | 6.50 |
Feature activation
To enable the feature, select Allow Direct Order Returns in SA Administrator Options-Documents-Sales Orders-Entry Settings. To set up and post to separate Cost of Goods GL accounts for regular and direct return orders, select Use Separate COGS Accounts for Returns in SA Administrator Options-Product-Costs. You can then specify the COGS accounts on Product GL Distribution Setup and SA Operator Setup records. You can also specify the new accounts in Customer Setup, but you must first select Use Customer Income Statement Accounts in SA Administrator Options-Customer-Defaults.