About Credit for Returns

Determining How Much Credit to Issue

The decision about how much credit to issue is made when the customer is authorized to reject material on the RMA Line Items form. Factors that enter into the calculation of the credit include:

• Quantity to Return: You enter the number of items for which return is authorized. If the material is referenced to a customer order and line item, then the quantity returned cannot be greater than the quantity invoiced. If the item is serial-tracked, then the quantity returned must be a whole number.
• Unit Credit: You can enter the credit which you authorize for each unit returned. The default is the cost associated with the item on the original customer order, if known, or the cost taken from current pricing routines if the item is inventoried.
• Restocking Fee: Your company can elect to charge customers a small fee for the staff time it takes you to process the returned material. This fee is often called a restocking fee, but you can call it something else on your credit memos simply by changing the name in the Description field of the RMA Parameters form. The system calculates the restocking fee based on the Restocking Fee % stored on the RMA Parameters form to provide a Restocking Fee amount. This percent and amount can be overwritten. Overwriting either one will cause the other to be recalculated.

Printing and Posting the Credit

To preview all RMA line items that are ready to be credited, run the RMA Status Report. RMA line items appear on the RMA Status Report when:

• The Return check box is selected and the quantity returned is greater than the quantity credited thus far, OR the Return check box is cleared and an amount remains to be credited.
• RMA line items have a status of Open or Filled. (RMA line items with a status of Closed or History cannot be printed or posted.)
• The RMA associated with the RMA line item has a status of Open. (Items associated with headers which have a status of Stopped, Closed, or History cannot be printed or posted.)

After reviewing the records pulled by the report, you might want to modify the range of RMA numbers or of RMA dates, to eliminate records that should not be receiving credit memos at this time.

Then, to print RMA credit memos and to post the credits to Accounts Receivable, perform the RMA Credit Memo activity.

The RMA credit memo is printed on the same special form as the standard invoice. The words RMA CREDIT will print beneath the header information to differentiate the two documents.

• Form alignment: You can print a sample credit memo using Xs and 9s to represent data fields.
• Restocking Fee: The restocking fee will print on the RMA credit memo with the label defined by you on the RMA Parameters form. If you do not charge your customers a fee to return merchandise, do not enter any label in the Description field on the RMA Parameters form. That way, no label prints on the credit memo.
• Multi-lingual credits: If the customer is flagged for multi-lingual invoices, the credit memo will automatically be printed using the same language for labels.
• Non-domestic currency: The amount posted is always credited in the customer's currency, even if the amount printed on the credit memo was translated to the domestic currency.
• Preprinted forms: Be sure to specify whether you use new Moore forms (the default) or the previously available (old) Moore forms.
• Pre-numbered forms: If your company uses preprinted and pre-numbered forms, the maximum number of lines allowed per credit memo is defined on the Accounts Receivable Parameters form. The invoice headers are the same but the credit memo number changes. Also, the total amount prints in words on the footer.

As part of the posting process, the status of all RMA line items that have been fully credited is automatically changed to Closed. If all RMA line items associated with an RMA header have a status of Closed, then the RMA header status is also changed to Closed.

The account numbers which will be debited and credited when you post credits are pulled as follows:

• If the item exists in theItems form, from the End User Type (if specified) or the Distribution Account record
• If the item does not exist in the Items form, from the End User Type (if specified) or Accounts Receivable Parameters (sales discount account and unit codes) form.

Adjustments Calculated by the System

When customers reject material for which they received a discount, or for which a sales representative received commission, then the system adjusts those calculations where possible.

Both the order level and line item level sales discounts (if any) given on the original customer order will be backed out if:

• The original customer order and line are known.
• The item on all RMA line items matches the item on the associated customer order line items.

The amount on which the sales commission is figured is adjusted by the amount of the credit (prior to the application of the restocking fee) if:

• The RMA line item references a valid customer order (including History orders) and line.
• The RMA line item exists in the Items form and is the same as the item on the original customer order.
• There were commissions associated with that particular item on the original customer order.

When you print an RMA credit memo, the document is assigned a number which prints in the Invoice No space. However, the RMA credit appears in Accounts Receivable as an open credit, with an invoice number of 0.