Extended Sales and Purchase ScenariosLesson 12

Processing Direct Returns

Back to D200: Inventory Order Management Extended Scenarios

Lesson 12: Processing Direct Returns

Part 3: Extended Sales and Purchase Scenarios

This lesson explains how you can process a direct return of stock items.

Direct Returns: General Information

A point-of-sale (POS) system is an electronic system that is used to record the sales, payment, and return transactions of a retail store. The POS system can be operated by a cashier or can be a self-service terminal where customers perform all operations. Your organization can integrate Acumatica ERP with an external POS system for simplified processing of direct returns if the Advanced SO Invoices feature is enabled on the Enable/Disable Features (CS100000) form. With a direct return, a customer returns stock items directly to the retail store rather than shipping them. In the POS system, a direct return is processed through the creation of a credit memo—a sales-related document of the Credit Memo type created on the Invoices (SO303000) form.

Learning Objectives

In this lesson, you will do the following:

  • Create a credit memo (an invoice of the Credit Memo type) for a direct return
  • Add to the credit memo a return line with a link to an original sales document
  • Add to the credit memo a replacement line
  • Process the direct return to completion

Applicable Scenarios

You may need to create and process a direct return in the following cases:

  • A customer returns goods directly at the store. In this case, you process a credit memo in the system.
  • A customer returns goods directly at the store and requests the replacement of returned items. In this case, you process either a credit memo or a sales invoice, and the document includes both return lines and replacement (sales) lines.

Direct Return Process

You use the Invoices (SO303000) form to enter a credit memo (an invoice of the Credit Memo type), and you add a line for each returned or replaced item. To add a line (or multiple lines) with a link to related sales invoice, you click Add Return Line on the table toolbar of the Details tab. In the dialog box that opens, you select the invoice line or lines to be added as return lines to the document you are creating. In the added line, you can correct the quantity to be returned if partial return of the item quantity is requested (for example, if four units of the item were purchased and the customer is returning only two). For serialized items, you should add a separate line with this item and a quantity of 1 for each serial number. To release the credit memo, you click Release on the More menu. The system does the following:

  • Automatically generates a batch of general ledger transactions.
  • Automatically generates and releases an inventory issue for the stock items, which causes the system to increase the on-hand quantity with the quantity of the returned items. For return lines, the system adds lines with the Credit Memo transaction type to the inventory issue.
  • Makes the credit memo visible on the Invoices and Memos (AR301000) form as an AR credit memo. An AR credit memo on the Invoices and Memos form is a financial document that does not contain links to the applicable shipments and sales orders, as the credit memo (an invoice of the Credit Memo type) does. The credit memos have the same reference number, which the system prints in the customer statement. On both the Invoices form and the Invoices and Memos form, you can view the link to the batch of the general ledger transactions that was generated when the credit memo was released.

Workflow of a Direct Return

For a credit memo created for processing a direct return, the typical processing involves the actions and generated documents shown in the following diagram. Direct Returns: Direct Return with Replacement

If a customer returns stock items directly to the retail store and requests for the exact replacement of these items, you can process both return and replacement in a single document.

Processing Direct Return with Replacement

To process a direct return with replacement, you create sales invoice or credit memo on the Invoices (SO303000) form, and add to the document the lines with items to be returned and the lines with items for replacement. In the created document, return and replacement lines will have different signs. In a credit memo (an invoice of the Credit Memo type), return lines have quantities with positive sign, and replacement lines have quantities with negative sign. In a sales invoice, return lines have quantities with negative sign, and replacement lines have quantities with positive sign. You must select the type of the document for processing a direct return for replacement so that the total balance of the document will be equal to zero or above zero. When the sales invoice or credit memo is released, the system generates an inventory issue transaction to update the item information in inventory. The inventory operation is specified on the line level in the generated inventory transaction, in the inventory issue. For a replacement line, an inventory issue line with the Invoice type is generated to issue the replacement item from inventory. For a return line, an inventory issue line with the Credit Memo type is generated to return an item to inventory. Also, on release of the sales invoice or credit memo, this invoice or credit memo, respectively, becomes visible and available for further processing on the Invoices and Memos (AR301000) form. Direct Returns: Process Activity

In this activity, you will learn how to process a direct return of stock items through a point-of-sale (POS) terminal, and how to process a replacement of the returned items.

Story

Suppose that on January 30, 2025, an employee of the small retail customer FourStar Coffee & Sweets Shop came to the SweetLife store and asked for an exact replacement of a large jar of apple jam that is leaking. This jar is one of ten jars that were bought two days ago, on January 28, 2025. Acting as the sales manager of the SweetLife company, you need to process the return of the jar and the sale of the new jar by using the POS terminal. The previous sale, dated January 28, 2025, was recorded through the sales invoice (created automatically through the integration of the POS system and Acumatica ERP), which was paid in full and now has the Closed status. You need to replace the inventory item with the same item at the same price, so that no payment needs to be processed.

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
  • Advanced SO invoices, which provides support for direct sales and returns and integration with POS systems
  • In the SweetLife store, the integration between the store’s POS system and Acumatica ERP has been configured to work as follows:
  • When the sales manager processes a return through the POS system, the POS system creates an invoice of the Credit Memo type with the item or items being returned on the Invoices (SO303000) form.
  • If any lines of a direct return relate to an existing sales order, the POS operator selects the needed order directly via the terminal when processing a return.
                       In this activity, to simulate the POS functionality that occurs in a production system, you
                   will add a return line with a link to the original sales invoice.
  • To process a replacement, the sales manager adds to this credit memo a line with the same inventory item or items and a quantity with the opposite sign.
  • When the sales manager releases the credit memo, Acumatica ERP creates an inventory issue that includes two lines with different operation types: one line adds the returned item or items to inventory, and another line issues the replacement item or items from inventory.
  • On the Customers (AR303000) form, the COFFEESHOP customer has been created.
  • On the Stock Items (IN202500) form, the APJAM96 stock item has been created.
  • On the Invoices (SO303000) form, the sales invoice for which you will process a return has been entered into the system.

Process Overview

In this activity, to handle a direct return, you will create a credit memo on the Invoices (SO303000) form. You will add the appropriate lines to the credit memo, some of which are linked to the original sales order and some of which are for replacement items and have a negative quantity. Then you will release the invoice to process both the receipt of returned items to inventory and the issue of replacement items from inventory.

System Preparation

Before you start replacing the inventory item with the same item at the same price, do the following:

  1. Launch the Acumatica ERP website with the U100 dataset preloaded, and sign in as sales manager Joseph Becher by using the becher username and the 123 password.
  2. 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.

Step 1: Entering a Credit Memo To enter a credit memo, do the following:

  1. On the Invoices (SO303000) form, add a new record.
  2. In the Summary area, specify the following settings:
  • Type: Credit Memo
  • Customer: COFFEESHOP
  • Date: 1/30/2025
  • Post Period: 01-2025
  • Description: Replacement of the leaking jar
  1. On the form toolbar, click Remove Hold. Notice that the credit memo has the Balanced status.

Step 2: Adding the Return Line To add a line with the item to be returned, do the following:

  1. While you are still viewing the credit memo on the Invoices (SO303000) form, on the table toolbar of the Details tab, click Add Return Line.
  2. In the Add Return Line dialog box, which opens, select the unlabeled check box in the line dated 1/28/2025 with the APJAM96 item, and click Add & Close. The system adds the return line to the credit memo and closes the dialog box.
  3. In the line added to the credit memo, change the Quantity to 1 (because only one of the jars is being returned). In the Orig. Inv. Nbr. column in the line, notice that the system has inserted the reference number of the original invoice for which the return is being performed.
  4. On the form toolbar, click Save.

Step 3: Adding the Replacement Line To add the line with the replacement item the credit memo, do the following:

  1. While you are still viewing the credit memo on the Invoices (SO303000) form, on the Details tab, add one more line (for the replacement item) with the following settings:
  • Inventory ID: APJAM96
  • Warehouse: RETAIL
  • Quantity: -1 The quantity is negative because the item is to be issued from inventory.
  • Unit Price: 45.15 (the same as in the line with the item being returned)
  1. On the form toolbar, click Save.

Step 4: Releasing the Credit Memo To release the credit memo, do the following:

  1. While you are still viewing the credit memo on the Invoices (SO303000) form, on the form toolbar, click Release. Notice that the status of the credit memo is now Closed. On release of the credit memo, the returned item has been received to inventory, and the replacement item has been issued from inventory. Because the price of the returned item was the same as the price of the replacement item, the credit memo balance is 0.00; thus, no payment needs to be processed.
  2. On the Details tab, in either of the lines, click the link in the Inventory Ref. Nbr. column. On the Issues (IN302000) form, the system opens the inventory issue that was generated on release of the credit memo.
  3. On this form, review the settings of the inventory issue, and make sure the inventory issue has the Released status, as shown in the following screenshot. Notice that the line with the returned item has the Credit Memo transaction type, while the line with the replacement item has the Invoice transaction type.
       Figure: Inventory document generated for processing the direct return