Back to D100: Inventory Order Management Basics

Lesson 10: Processing Purchase Returns

Part 2: Basic Sales and Purchase Processes

In some cases, you may need to return purchased items to the vendor. This lesson explains how you can create and process purchase returns of stock items at the items' original cost and at the items' calculated cost.

Purchase Returns: General Information

In Acumatica ERP, you can create and process purchase returns if any purchased items need to be returned to the vendor for some reason.

Learning Objectives

In this lesson, you will do the following:

Create a purchase return document
Specify the items to be returned and define at which cost the items will be issued from inventory
Process the purchase return and the related inventory and accounts payable documents

Applicable Scenarios

In most cases, the purchasing process is completed when your company receives the goods and the corresponding accounts payable bill is released to adjust your outstanding balance with the vendor. In some cases, however, items are delivered in an unsatisfactory condition or shipped by mistake and should be returned to the vendor for replacement or reimbursement. A purchase return can also occur when services were not rendered or were provided partially, and your company should be reimbursed. A purchase return process includes the creation of a purchase return document, the specification of the returned items and their quantities, the issuing of the returned item from inventory, and the adjustment to the outstanding vendor balance in the system in the returned amount.

Creation of a Purchase Return

A purchase return is a purchase receipt of the Return type created on the Purchase Receipts (PO302000) form that includes a line for each stock or non-stock item being returned. You can create a purchase return from scratch on this form or by first opening the corresponding purchase receipt on this form. To create a purchase return manually on the Purchase Receipts form, you specify the needed settings in the Summary area of the form. Then on the Details tab, you add any number of purchase receipts or purchase receipt lines to it by clicking Add PR or Add PR Line, respectively, on the table toolbar. To create a purchase return by using the purchase receipt as a starting point, you open the purchase receipt on the Purchase Receipts form, select the unlabeled check boxes on the Details tab in the lines of the purchase receipt with the items to be returned, and click Return on the form toolbar. The system copies the relevant information, including the lines you selected, from the purchase receipt to a new purchase return on the same form. Regardless of how you have created the purchase return, in each copied line on the Details tab, you specify the quantity of items to be returned in the Receipt Qty. column and a reason code of the Vendor Return usage type in the Reason Code column. By default, the system inserts the reason code that is specified in the PO Return Reason Code box on the Purchase Orders Preferences (PO101000) form. For each item on the Details tab of the Purchase Receipts form, you must specify the warehouse (and warehouse location, if applicable) from which the items will be issued to be sent back to the vendor. For stock items with lot or serial numbers, you have to click Allocations on the table toolbar of the Details tab and specify the particular lot or serial numbers for the units being returned. On the Details tab of the Purchase Receipts form, lines of the purchase return are linked to lines of a purchase order if the PO Order Type and PO Order Nbr. columns are filled in. These settings are copied from the associated purchase receipt. For purchase receipt lines that are linked to a purchase order, you can select the Open PO Line check box on the Details tab to specify that the system should change the status of the related purchase order to Open when the purchase return is released. You do this if you expect to receive replacement items for the order from the vendor and thus want to open the purchase order again. If the Open PO Line check box is cleared, the related purchase order remains closed. Aer you have specified the settings of the returned items on the Details tab of the Purchase Receipts form, you define the cost at which the items will be issued from inventory by selecting one of the following options in the Cost of Inventory Return From box of the Summary area:

Original Cost from Receipt: The items are issued from inventory at exactly the cost at which the items were purchased.
Cost by Issue Strategy: The items are issued at the cost calculated by the system according to the items' valuation methods.
Manual Cost Input: You can enter the cost manually.

Processing of a Purchase Return

Aer you have created a purchase return on the Details tab of the Purchase Receipts (PO302000) form, you need to process the issuing of items from inventory and adjust the vendor's balance in the system for the amount of the returned items. On release of the purchase return, the corresponding inventory issue is generated automatically and can be viewed on the Issues (IN302000) form. On release of this issue, the quantities of each of the returned items are deducted from the item quantities available at the warehouse specified in the Warehouse column of the Details tab of the Purchase Receipts form.

Also, on release of the purchase return, an accounts payable debit adjustment is generated automatically if the Create Bill check box is selected in the Summary area of the purchase return on the Purchase Receipts form. You can view the generated debit adjustment on the Bills and Adjustments (AP301000) form. If the purchase receipt for which the return was created is linked to a line of a purchase order, then on the Details tab of the Purchase Orders (PO301000) form for the purchase order, the applicable values in the Qty. On Receipts column are decreased by the quantity of the listed item that is returned. The further processing of a purchase return depends on the agreement between your company and the vendor. You can complete the processing of the return by processing a vendor refund or by receiving replacement items for the original purchase order.

Workflow of a Purchase Return

For purchase return documents, the typical processing involves the actions and generated documents shown in the following diagram. Purchase Returns: To Process a Return at the Original Cost

The following activity demonstrates how to process the return of stock items from your company's inventory to the vendor at the items' original cost.

Story

Suppose that you are Regina Wiley, a purchasing manager in the SweetLife Fruits & Jams company. On January 30, 2025, you have noticed that three packs of paper that were purchased and delivered on January 29, 2025 have been damaged during shipping. You have decided to return these packs to the Spectra Stationery Oﬀice vendor without requesting a replacement. You, acting as the purchasing manager, need to create and process a purchase return of the damaged items at the items' original cost.

Configuration Overview

In the U100 dataset, for the purposes of this activity, the following tasks have been performed:

On the Enable/Disable Features (CS100000) form, the following features have been enabled:
Inventory and Order Management, which provides the standard functionality of inventory and order management
Inventory, which gives you the ability to maintain stock items by using forms related to the inventory functionality and to create and process sales and purchase documents that include stock items
On the Vendors (AP303000) form, the STATOFFICE (Spectra Stationery Oﬀice) vendor has been defined.
On the Stock Items (IN202500) form, the PAPER, PEN, and PENCIL stock items have been created.
On the Purchase Orders Preferences (PO101000) form, the Process Return with Original Cost check box has been selected. The state of this check box is copied to each purchase return that is created as the default state; when the check box is selected, the system processes the return of items at the cost specified in the original receipt.
On the Purchase Receipts (PO302000) form, a purchase receipt for the STATOFFICE vendor has been created.

Process Overview

A purchase return document, which represents a vendor return in the system, is prepared based on the applicable purchase receipt. In this activity, to create a purchase return, you will open the purchase receipt on the Purchase Receipts (PO302000) form, and on the Details tab, you will select the lines of all items that need to be returned. Then on the form toolbar, you will click Return; on the same form, the system will copy the relevant information to a new document of the Return type that includes the lines selected for return. Before you process the prepared purchase return further, on the Details tab of the Purchase Receipts form, you can correct the quantities to be returned (if you need to return only part of the purchased items) and the reason code for the line (if it is diﬀerent than the default reason code inserted by the system). In the Summary area, you will specify that the items should be issued from inventory at the cost at which they were purchased by selecting the Original Cost from Receipt option in the Cost of Inventory Return From box. You will then release the purchase return and review the related documents to make sure the return has been processed fully in the system.

System Preparation

Before you start processing a purchase return document, you should do the following:

In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to 1/30/2025. If a diﬀerent date is displayed, click the Business Date menu button and select 1/30/2025 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
On the Company and Branch Selection menu, in the top pane of the Acumatica ERP screen, make sure the SweetLife Head Oﬀice and Wholesale Center branch is selected.

Step 1: Creating a Purchase Return from the Related Purchase Receipt To create a purchase return from the purchase receipt, do the following:

On the Purchase Receipts (PO302000) form, open the purchase receipt from the STATOFFICE vendor and dated 1/29/2025.
On the Details tab, select the unlabeled check box in the line of the purchase receipt with the PAPER item.
On the form toolbar, click Return to create a document in which you will process the return of the item. The system opens the document on the same form. It has the Return type and includes the selected line. In this line, notice that the system has inserted the number of the initial purchase receipt into the PO Receipt Nbr. column on the Details tab.
On the form toolbar, click Save.

Step 2: Specifying the Settings of the Purchase Return To specify settings of the purchase return, do the following:

While you are still viewing the purchase return on the Purchase Receipts (PO302000) form, in the Summary area, make sure that 1/30/2025 is specified as the Date.
In the Cost of Inventory Return From box, make sure that the Original Cost from Receipt option is selected. With this option selected, the items will be issued from inventory at exactly the same cost at which they were purchased.
Select the Create Bill check box so that the system generates a debit adjustment automatically on release of the purchase return.
In the only return line on the Details tab, change the Receipt Qty. to 3 (which is the quantity of items to be returned).
In the line, clear the Open PO Line check box to indicate that no replacement is needed for the returned items.
On the form toolbar, click Save.
The purchase return has the Balanced status and can thus be released.

Step 3: Releasing the Purchase Return To release the purchase return and to review how the return of items is processed in the system, do the following:

While you are still viewing the purchase return on the Purchase Receipts (PO302000) form, click Release on the form toolbar. Wait for the system to complete the operation.
On the Billing tab, review the information about the debit adjustment that was prepared, and make sure that it now has a status of Open (indicating that it was released).
On the Other tab, click the IN Ref. Nbr. link, and review the inventory issue, which opens on the Issues (IN302000) form in a pop-up window. Make sure that the issue has the Released status.
Close the Issues form.
On the Purchase Orders (PO301000) form, open the purchase order to STATOFFICE for which the return was processed.
On the Details tab, in the Qty. on Receipts column, notice that the received quantity in the PAPER line has been decreased by the returned quantity and is now 17.
On the PO History tab, review the documents related to the purchase order, as shown in the following screenshot. The le table shows the purchase receipt and purchase return; the right table shows the bill and the debit adjustment. In the line with the debit adjustment, notice the zero purchase price variance amount in the PPV Amt. column, which means that the items were returned at the cost at which they were purchased.
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    Figure: Documents related to the purchase order
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You have processed the return to the vendor without requesting a replacement.

Purchase Returns: To Process a Return at the Calculated Cost

In this activity, you will learn how to process a return of stock items from your company's inventory to the vendor, with the system calculating the items' cost.

Story

Suppose that on January 30, 2025 you, acting as purchasing manager at the SweetLife Fruits & Jams company Regina Wiley, notice that three packs of paper that were purchased and delivered on January 29, 2025 have been damaged during shipping. You have decided to return these packs to the Spectra Stationery Oﬀice vendor without requesting a replacement. You need to create and process a purchase return of the damaged items at the cost calculated by the system.

Configuration Overview

In the U100 dataset, for the purposes of this activity, the following tasks have been performed:

On the Enable/Disable Features (CS100000) form, the following features have been enabled:
Inventory and Order Management, which provides the standard functionality of inventory and order management
Inventory, which gives you the ability to maintain stock items by using forms related to the inventory functionality and to create and process sales and purchase documents that include stock items
On the Vendors (AP303000) form, the STATOFFICE vendor has been created.
On the Stock Items (IN202500) form, the PAPER stock item has been created.
On the Purchase Orders (PO301000) form, the purchase order has been created with stationary items ordered from the STATOFFICE vendor and, on the Purchase Receipts (PO302000) form, the related purchase receipt has been created and released.

Process Overview

A purchase return document, which represents a vendor return in the system, is prepared based on the applicable purchase receipt. In this activity, to create a purchase return, you will open the purchase receipt on the Purchase Receipts (PO302000) form, and on the Details tab, you will select (by selecting the unlabeled check boxes) the lines of all items to be returned. Then on the form toolbar, you will click Return; on the same form, the system will copy the relevant information to a new document of the Return type that includes the lines selected for return. Before you process the prepared purchase return further, on the Details tab of the Purchase Receipts form, you will correct the quantities to be returned. In the Summary area, you will specify that the items should be issued from inventory at the cost calculated by the system by selecting the Cost by Issue Strategy option in the Cost of Inventory Return From box. You will then release the purchase return and review the related documents to make sure that the return has been processed fully in the system.

System Preparation

Before you start preparing a purchase return, you should do the following:

In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to 1/30/2025. If a diﬀerent date is displayed, click the Business Date menu button and select 1/30/2025 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
On the Company and Branch Selection menu, in the top pane of the Acumatica ERP screen, make sure the SweetLife Head Oﬀice and Wholesale Center branch is selected.

Step 1: Creating a Purchase Return from the Related Purchase Receipt The easiest way to create a purchase return is to start from the purchase receipt in which you received the items to be returned. To create the purchase return from the purchase receipt, do the following:

On the Purchase Receipts (PO302000) form, open the purchase receipt to STATOFFICE dated 1/29/2025.
On the Details tab, select the unlabeled check box in the line of the purchase receipt with the PAPER item.
On the form toolbar, click Return to create a document in which you will process the return of the item. The system opens the document on the same form. It has the Return type and includes the selected line. In this line, notice that the system has inserted the number of the initial purchase receipt into the PO Receipt Nbr. column on the Details tab.

Step 2: Specifying the Settings of the Return To define the specific settings of the return document, do the following:

While you are still viewing the purchase return that you have created on the Purchase Receipts (PO302000) form, in the Summary area, make sure that 1/30/2025 is specified as the Date.
In the Cost of Inventory Return From box, select the Cost by Issue Strategy option. With this option selected, the items will be issued from inventory at the cost calculated by the system.
Select the Create Bill check box to make the system generate a debit adjustment automatically on release of the purchase return.
In the only return line on the Details tab, change the Receipt Qty. to 3 (which is the quantity of items to be returned).
In the line, clear the Open PO Line check box to indicate that no replacement is needed for returned items.
On the form toolbar, click Save to save the purchase return, which has the Balanced status and can thus be released.

Step 3: Releasing the Purchase Return To release the purchase return and to review how the return of items is processed in the system, do the following:

While you are still viewing the purchase return on the Purchase Receipts (PO302000) form, click Release on the form toolbar.
On the Orders tab, click the link in the Order Nbr. column. The system opens the purchase order for which the return was processed on the Purchase Orders (PO301000) form in a pop-up window.
On the Details tab, in the Qty. on Receipts column, notice that the received quantity in the PAPER line has been decreased by the returned quantity and is now 14.
On the PO History tab, review the documents related to the purchase order, as shown in the following screenshot. The le table shows the purchase receipt and purchase return; the right table shows the bill and the debit adjustment. In the line with the debit adjustment, notice the nonzero purchase price variance amount in the PPV Amount column, which shows the diﬀerence between the amounts at which the items were purchased and at which the items were returned.
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   Figure: Documents related to the purchase order
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