Supplier Warranty Allowance program

Required setups

To use the program, perform setups in these functions:

• Product Warehouse Product Setup

  Identify which products are included in the program.

• GL Account Setup

  Set up these accounts for each vendor who is participating in the program:

  • Supplier Warranty Allowance

    This account is credited with the vendor allowance amount per product. The allowances accrue in this account and are used to cover the product replacement costs. It is a balance sheet account that is similar to an Allowance for Bad Debt account.

  • Supplier Warranty Return Expense

    This account is debited when damaged, unavailable products are removed from inventory. The account records the full cost that is incurred for replacing damaged products to the customer at no charge.

• Vendor Setup

  Specify the allowance percentage and the vendor's Supplier Warranty Allowance and Supplier Warranty Returns Expense accounts.

• SA Table Code Value Setup

  Optionally, set up a Return Adjustment Reason for products in the Supplier Warranty Allowance program that places the returned products in unavailable inventory. A reason that is specific to the Supplier Warranty Allowance program is not required. You can use any Return Adjustment Reason that places returned products in unavailable inventory.

Calculating the allowance

When a purchase order is created, the allowance is automatically calculated at the line level for a product that is included in the program. This calculation is used:

• Supplier Warranty Amount percentage * Net Amount

The total of all allowances for the order is maintained at the header level.

The allowance calculation is applied to purchase orders that are created manually or through Excel imports, SX.API calls, and PurchaseOrder BODs. To include Supplier Warranty Allowance data in the PurchaseOrder BOD, you must enable these extra fields in SA Administrator ION Noun Setup:

• Level 1: POEH.suppwarrallownet
• Level 2: POEL.suppwarrallowpct and POEL.suppwarrallownet

You must also enable Level 1 APSV.suppwarrallowpct for the SupplierPartyMaster BOD to include Supplier Warranty Allowance data for vendor record creation or maintenance.

See information about activating BODs in the configuration guide for CloudSuite Distribution or on-premises Distribution SX.e.

The allowance calculation is also applied in these functions:

• Purchase Entry Recommended Replenishment Action Report

  The allowance amount per line and the total allowance amount per order is calculated when the report is run. The values are displayed in Purchase Demand Center Entry.

• Purchase Demand Center Entry

  The allowance percentage and allowance amount per line is displayed on the Line Items tab of the Report # page. The total allowance amount per order is displayed on the Header tab. The allowance amount per line and the total allowance amount per order is calculated when you update an existing line or add a new line.

• Purchase Entry RRAR Merge Process Report

  The allowance amount per line and the total allowance amount per order is calculated when the report is run to create purchase orders.

• Sales Order Entry

  The Supplier Warranty Allowance amount is calculated when a purchase order is tied to a sales order.

You can also inquire on Supplier Warranty Allowance values in the Line Details and Totals tabs in Purchase Order Inquiry.

Costing the purchase order invoice

If the allowance amount on an invoice is different than the allowance amount on the purchase order, you must manually change the allowance amount in Vendor Invoice Center Entry.

When the purchase order is costed in Vendor Invoice Center Entry, the total allowance amount is subtracted from the total invoice amount. The total allowance amount for the purchase order is displayed on the PO Header Entry tab in the Invoice Detail page and on the PO Header Entry - Update page. The Lines grid on the PO # page includes the Supplier Warranty Allowance percentage, amount, and net amount of the line with the allowance. You can edit the line to change the percentage or amount, which then updates the net amount.

After you perform the final update and the journal is posted, the Supplier Warranty Allowance amount from the header is posted to the Supplier Warranty Allowance account. If the account is not set up in Vendor Setup, the amount is posted to Suspense.

Example posting during the final update process after purchase order costing:

Processing customer returns

When a customer returns a product, specify a Return Adjustment Reason in Sales Order Entry that places the product in unavailable inventory. You can specify a Return Adjustment Reason that is specific to the Supplier Warranty Allowance program, but it is not required.

If the product is confirmed as damaged after inspection, you remove the unavailable product from inventory in Product Unavailable Inventory Entry. The Supplier Warranty Returns Expense account for the ARP vendor is then debited for the cost of the product. The Inventory account is credited.

Example posting

Monitoring the program

You can use standard General Ledger inquiries to determine if the allowances that you receive provide adequate compensation for the cost of customer returns. Optionally, you can use Birst to generate detailed reports.