How do I enter a return authorization to our customer and credit from our vendor?

BACKGROUND: You sold an item to your customer and it was defective. You need to send a replacement item to the customer and the customer will send the defective item back to you.

The following are the steps to issue a return authorization to your customer and then send the product back to the vendor for credit.

1. You have originally sold the customer a new item and charged the normal price using a new order. You have invoiced the order. This will remove one from your inventory.

2. Enter a new order as a return authorization. This order will stay in the backorders until the item has been returned from the customer. The return authorization number is the order number. Use a negative quantity for the item. The price will be the normal selling price. The quantity will not be allocated to backorder for the inventory item.

3. When you receive the item from the customer, display the return authorization order and invoice. This will add the quantity back into your inventory. This will put a credit on the customer account. Apply the credit using your normal apply credit memo procedures.

4. Issue a purchase order to your vendor for the return of the item. Use a negative quantity. Immediately receive the purchase order quantity. This will remove the item from your inventory. The purchase order will remain on the un-invoiced purchases until you have received notice of the credit from your vendor.

5. When you receive notice of the credit from the vendor, receive the invoice for this order. This will place a credit voucher in the accounts payable system.

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Category: Accounts Receivable