Purchase Returns Treatment Enhancements in GP 2010

In GP2010, there are a couple of enhancements made to Returns Transaction processing in Purchase order processing module. These enhancements are

1. Option to mark Replace returned goods
2. Option to mark Invoice expected for returned goods.

Let us see how these options would affect the order processing.

Options	When to use	Results
Replace Returned Goods and Invoice Expected for Returned Goods	1. When you want to replace the returned goods, using the original purchase order. 2. When you have yet to process the invoice for the original goods. When you want to process an invoice for all of the original quantity of goods received (even though you have returned some of them).	1.Returned goods are replaced. The same purchase order is used for the replaced goods. 2. You can process the invoice for all of the original goods, including the goods that will be replaced.
Replace Returned Goods	1. When you want to replace the returned goods, using the original purchase order. 2. When you do not expect to receive an invoice for the goods you’re returning, or when you do not expect the invoice to match the original quantity of goods.	1. Returned items are replaced. 2. The same purchase order is used for the replaced items.
Invoice Expected for Returned Goods	1. When you do not want to replace the returned goods. For example, when you expect a refund or a credit. 2. When you want to close the purchase order when the invoice is processed.	1. The credit or refund occurs separately from the original invoice. 2. When you process the invoice, the purchase order is automatically closed.
Neither option is marked	1. When you do not want to replace the returned goods. For example, when you expect a refund or a credit. 2. When you have already processed the invoice, or when you do not expect to receive an invoice from the vendor.	The credit or refund occurs separately from the original invoice.

Example:

Scenario – 1

1. A PO is created for 10 widgets of Item A. PO status is Released.

2. 10 Widgets are received for Item A. Shipment is posted for the 10 widgets with number RCT-0001. PO status is Received.

3. The 10 widgets are found to be defective and agreed by the vendor to replace the items on Original PO itself. A Return Transaction Entry is entered and the option Replace Returned goods is marked. The return is posted. PO Status becomes released.

4. Items are replaced and a shipment entry is posted with RCT-0002. PO Status becomes received.
5. The invoice is received from the vendor for 10 widgets. Invoice is matched against Shipment in Enter/Match invoices entry. The shipment RCT-0002 is matched against the Invoice. PO Status becomes closed.

Scenario – 2

1. A PO is created for 10 widgets of Item A. PO status is Released.

2. 10 Widgets are received for Item A. Shipment is posted for the 10 widgets with number RCT-0001. PO status is Received.

3. All 10 widgets are found to be defective and agreed by the vendor to replace the items on Original PO itself but agrees for a refund on the original Invoice for original goods . A Return Transaction Entry is entered with the options Replace Returned goods and Invoice expected for  returned goods  are marked together. The return is posted. PO Status becomes released.

4. Items are replaced and a shipment entry is posted with RCT-0002. PO Status becomes received.

5. The invoice is received from the vendor for 10 widgets. Invoice is matched against Shipment in Enter/Match invoices entry. The shipment RCT-0001 and RCT-0002 are matched against the Invoice.  PO Status becomes closed.

6. Pass a refund  for the original 10 widgets.

Scenario -3

1. A PO is created for 10 widgets of Item A. PO status is Released.

2. 10 Widgets are received for Item A. Shipment is posted for the 10 widgets with number RCT-0001. PO status is Received.

3. All 10 widgets are found to be defective but vendor agrees to give a refund for the Invoice. A Return Transaction Entry is entered with the option Invoice expected for returned goods marked. The return is posted. PO Status stays received.

4. The invoice is received from the vendor for 10 widgets. Invoice is matched against Shipment in Enter/Match invoices entry. The shipment RCT-0001 is matched against the Invoice. PO Status becomes closed.

5. Pass a refund for the original 10 widgets.

Scenario –4

1. A PO is created for 10 widgets of Item A. PO status is Released.

2. 10 Widgets are received for Item A. Shipment is posted for the 10 widgets with number RCT-0001. PO status is Received.

3. All 10 widgets are found to be defective and agreed not to replace any items nor invoice for the original items. Neither options are marked. A Return Transaction Entry is posted. PO status becomes closed.

Note: Remember that the above scenarios are not exclusive but inclusive in nature suggesting that there can be several possibilities of how the returns are treated in Dynamics GP and only some scenarios are discussed.