Managing Returns of Items

This document explains what happens in the point of sale (POS) system and in M3 when a customer wants to return an item and be repaid either in cash or by a credit note.

Outcome

A return is entered in the point of sale system and a credit note or cash is given to the customer. Sales information is uploaded to M3 via a point of sale interface and the stock level is updated immediately. The general ledger and sales statistics are usually updated on a later occasion.

The following files are updated:

Sales ticket input-OPSALE
Stock balance-MITTRA, MITBAL and MITSTA
Sales statistics-OSBSTD
General ledger-FGLEDG

Before you start

At the shop, it has been decided that stock levels should be updated immediately after sales information is uploaded and validated into M3. The update is started from the external POS system when it communicates with M3 through the sales tickets application programming interface (OPS270MI). The 'Stock update' field must be selected and the 'BchPrcRound' (Batch Process Round Number) API transaction must be used to initiate the process in M3.
The POS system controls the upload frequency of sales information to M3. The upload frequency is usually determined either by a constant number of sales tickets to be sent each time or by a time interval.
If customer-specific prices are required at the point of sale, then the POS system must be interfaced with the application programming interface 'Price and Discount Inquiry Interface' (OIS320MI), where the 'GetPriceLine' (Get Item Price for an Order Line) transaction must be used.
The 'Separate accounting' parameter in 'POS Settings' (OPS700) must be selected if you want the discounts to be accounted for separately in the general ledger (FGLEDG). If the 'Separate accounting' parameter is selected, then sales are accounted as gross sales.
An accounting exception must be defined for the transaction type 1100 (gift certificate) when you use accounting event OP20 and accounting type 120. Instead of accounting the payment to a sales account (such as 3010), it must be accounted to a liability account (such as 2420). A liability account is a balance account and it affects the balance sheet. A sales account is a profit/loss account and it affects the statement of income. In addition, the gift certificate's reference ID (OPREFE) and expiration date (OPDUDT) can be selected as values in the accounting string.
When you use accounting event OP20 and transaction type 101(=Cash payment), then an accounting exception must be defined for the bank operation code (CTBOPC) used when a gift certificate or credit note is used as the payment method. Instead of accounting the payment to a cash account (such as 1910), it must be accounted to a liability account (such as 2420). In addition, the gift certificate's reference ID (OPREFE) and expiration date (OPDUDT) can be selected as values in the accounting string.

Follow these steps

The customer returns to shop with item

The customer returns the item to the point of sale in the shop.
Enter/Scan the returned item in the point of sale system

Information about the returned item is entered in the point of sale system, including the original receipt number. A reason code that explains why the customer has returned the item can also be entered in order to store the information in the sales statistics.
Identify the customer

The customer is identified and checked to verify whether the returned item had any discounts or customer-specific prices at the time of the purchase. Customer-specific prices for an item are retrieved by using 'Price and Discount Inquiry Interface' (OIS320MI) and the 'GetPriceLine' (Get item price for an order line) transaction.

This activity is optional and used only for known customers.

Create returns receipt and credit note

The return is entered together with other information, such as the credit note reference ID and the expiration date, in order to create a credit note and two returns receipts. The customer is repaid either in cash or by a credit note. A 1990 transaction is created.

When repaid in cash, the receipt is as follows:


Return Receipt No. 123456

Item No.	Quantity	U/M	Amount
Item A	1-	Pce	–99.95
		Subtotal	–99.95
		To receive	100.00

VAT 25%		VAT	–19.99

When repaid with a credit note, the receipt is as follows:


Return Receipt No. 123456

Item No.	Quantity	U/M	Amount
Item A	1-	Pce	–99.95
		Subtotal	–99.95
		To receive	100.00
		Credit note	100.00
		Credit note number 1002
		Valid to 20031231
VAT 25%		VAT	–19.99

Upload sales information to M3 and update stock levels

After the return is entered, it is uploaded to M3 through the point of sale application programming interface 'POS sales tickets interface' (OPS270MI). Two different transaction types are used:

Transaction type 1200=Returns of items
Transaction type 1990=Payments

The credit note's reference ID and expiration date are added to transaction type 1990. A 1990 transaction is also created for a credit note or repaid cash. The credit note's ID number is updated in the Reference field in OPSALE. (See the table regarding credit notes below.)

The stock level will be updated immediately and can be displayed in both 'Balance Identity. Open Toolbox (MWS068)' and 'Stock Transaction. Display History' (MWS070).

When repaid in cash, the sales ticket input file OPSALE is updated as described in this table:


Trans-action type	Item No.	Qty	U/M	Payment method	VAT	Amount
1200	Item A	–1	Pcs		–19.99	–79.96
1990				Master Card (see note)		–100.00
1990				Cash (see note)		–100.00
1990				Rounding off (RND)		–0.05

Note: There are two different ways to repay the customer in cash. You can repay in money (that is, coins and bank notes) or repay directly to the customer's bank account via the customer's credit card. Both are described in this table.

When repaid with a credit note, the sales ticket input file OPSALE is updated as described in this table:


Trans-action type	Item No.	Qty	U/M	Ref.	Expiry date	Payment method	VAT	Amount
1200	Item A	–1	Pcs				19.99	79.96
1100				1002	20131231			100.00
1990						Rounding off (RND)		–0.05

Update general ledger and sales statistics

The sales statistics (OSBSTD) and general ledger (FGLEDG) are updated in batch through 'POS Sales Ticket. Update' (OPS280). The 'Sales statistics interface' and 'Financial interface' parameters in (OPS280) must be selected before the batch is run. Note that you should also select the 'Inventory accounting interface' parameter. This means that the stock is updated by sales tickets that have been validated in 'POS Sales Ticket Toolbox' (OPS275) or 'POS Sales Ticket. Transfer' (OPS270).

For the general ledger, the following accounting events and accounting types are created when repayment is made in cash:


Accounting event	Accounting type	Amount	Bank operation
OP20	101 (Cash Payment)	–100.00	45 (Cash)
OP20	120 (Revenue)	00.05	46 (Rounding off)
OP20	111 (VAT)	19.99
OP20	120 (Revenue)	79.96

Note that a bank operation is retrieved from the selected payment method.

For the general ledger, the following accounting events and accounting types are created when repayment is made by credit note:


Accounting event	Accounting type	Amount	Ref.	Expiry date	Bank operation
OP20	101 (Cash Payment)	100.00			45 (Cash)
OP20	120 (Revenue)	–100.00	1002	20131031
OP20	111 (VAT)	19.99
OP20	120 (Revenue)	79.96

The bank operation code is used to determine the account used in the general ledger. The reference ID and expiration date from the credit note can be used in the accounting string. When the customer uses the credit note as a payment method, the credit note's reference ID is balanced against the accounted liability, which is created in account 2420 when the customer returns the item.

Accounting string:


Accounting dimension 1	2420 (Account)
Accounting dimension 2	1002 (Credit note number)
Accounting dimension 3	20131231 (Expiration date)
Amount	100.00