Purchase Order Claims
This document explains how purchase order claims are managed.
When goods are rejected in the quality inspection activity, a claim for the supplier is often created. Usually, either a replacement delivery or a credit note from the supplier is requested.
Outcome
Claims are created manually or automatically. A replacement delivery or a credit note is then created.
These files are updated in M3:
- MPCLAH Purchase Order Claim Header
- MPCLAL Purchase Order Claim Line
The workflow differs depending on whether a replacement delivery or a credit note is requested.
If a replacement delivery is requested, a sub-number on the original purchase order line is created automatically, making it possible to receive the replacement delivery on the purchase order. It is also possible for the system to remove the rejected goods from the rejected goods location automatically. This is done by using a requisition order. If a replacement delivery is requested, financial transactions are created during the issue of material.
This will not happen if a credit note is requested from the supplier.
Before you start
- A purchase order must be created. See Create, Release, and Display Purchase Order.
- Settings in the document Settings for Goods Receiving, Quality Inspection, Claims and Put-Away must be entered.
- The goods must be reported as received (status is set to 50). See Receive Purchased Goods .
How claims are created
In M3, claims can be created manually in a specific program or automatically from the quality inspection. By setting the parameters, you can create the claim automatically if the goods are partially or fully rejected but also if the goods are approved but with remarks. For more information, see Settings for Goods Receiving, Quality Inspection, Claims and Put-Away.
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Structure of a claim
A claim consists of a header and one or more lines. The program for claim headers is 'Return To Supplier. Open' (PPS390). The program for claim lines is 'Return To Supplier. Open Lines' (PPS391).
The lines correspond to the rejected order lines. Information about the claim, such as whether a replacement delivery or a credit note is requested, is added to the header, which is printed on the claim note.
Work with claims
The workflow differs depending on whether a replacement delivery or a credit note is requested.
If a replacement delivery is requested, a subnumber on the original purchase order line is created automatically, making it possible to receive the replacement delivery on the purchase order.
The system can also remove the rejected goods from the rejected goods location automatically. This is done by using a requisition order. This will not happen if a credit note is requested from the supplier.
If a replacement delivery is requested, financial transactions are created in the issue of material. The section "Financial Transactions" that follows provides a brief overview of the financial transactions.
For more information, see Manage Purchase Order Claims.
Claim statuses
The status of the claim indicates the progress of the claim in the flow. Some of the status codes are set manually for follow-up reasons. The valid alternatives are:
05 = Work with claims is in progress. When the work is completed, the status is set to 10.
06 = Work with claims is active. When the work is completed, the status is set to 15.
10 = Preliminary. This is the normal status for automatically added claim errands when the quality inspection result is reported.
15 = Approved. The status is set manually after an action is decided for the claim.
20 = Claim letter is printed.
40 = Claim errand is partially completed. Manually set status.
90 = Claim errand is completed. Manually set status.
Financial transactions
If a replacement delivery is requested, an issue of the material can automatically be created when the claim document is printed. This issue will create financial transactions for the financial system. The accounts setup on this transaction is often interesting.
After goods receipt, some financial transactions are created automatically. The value will be the cost price for the item (standard cost or average price depending on the inventory accounting cost method in 'Item. Open' (MMS001/E)) multiplied by the quantity. The opposite account will be an account often called Stored not invoiced. This account is used temporarily. After the purchase invoice is booked, this account will be zeroed. An example follows.
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Example:
The cost price for an item is 25 dollars. After goods receipt of a quantity of 100, these financial transactions will be created:
Inventory PP 10/910 Delivered, not invoiced PP10/951 2500 2500 Accounting event
PP10=Stock Receipts PO
Accounting type
910=Inventory
951=Delivered, not invoiced
If a part of the quantity, for example 20 pieces, is rejected and placed at a rejection location in the quality inspection, a claim is created automatically in 'Return To Supplier. Open' (PPS390). A replacement delivery is requested and the claim document is printed. After the material is issued, new financial transactions are created.
Inventory MM20/910 Delivered, not invoiced MM20/907 500 500 Accounting event
MM20=Internal Stock issues
Accounting type
910=Inventory
907=Offset account stock trans
Since the inventory is decreased, the inventory account should be credited. The opposite account (Stored not invoiced) is preferable since this account will be credited again after the replacing delivery is goods-received.
The accounting transactions are created in a file called CINACC after 'Internal Account Entry. Create' (CAS950) is run. The transactions can be transferred to the financial system either immediately or in a special run. The transactions can be viewed in 'Internal Account Entry. Open' (CAS300) or by selecting option 21 in front of the transaction in 'Stock Transaction. Display History' (MWS070).
The account setup, defined in 'Accounting Rule. Set' (CRS395), determines which accounting strings these transactions will have.