For a customer return, we need to create a sale order (Material Return), generate an invoice based on the order, and generate shipment (if any), and make the payment to the customer. However, the payment looks funny as it is an AR Payment, paid by the customer to our bank account in a negative amount. Is this the right way to deal with customer refund? Should it be an AP Payment to the customer?
If you enter it as an AP payment then Compiere will complain about a mismatch between AP and AR .. I dont think you have any better options.
At least the accounting facts will be correct.
Thank you Adaxa...However, if this is the only option to deal with customer refund, and the payment has to be a "AR Payment" from the customer with negative amount, how the print format for the cheque should be modified? Should we create a new format for customer refund and make the cheque look more reasonable? Qingyu
do a manual handwritten cheque and just enter it in payments?
This is interesting...we always forget the old traditional way of handling business...thanks buddy...handwritten cheque is a perfect solution. Best regards. Q
I've been looking at customer returns myself in recent days. Unlike your situation I won't have to worry about a repayment, but by and large I had intended to implement as you suggested. The "Material Return" document is new as of 253a I think... previous to that you had to create minus qty shipments etc which cased minus GL postings as opposed to making opposite postings as the accounts would insist!
SO I too was creating "Material Returns", generating shipments which created MM Returns documents and generating invoices which created Credit Memos. All looked ok. Then I noticed that my stock was descreased instead of increasing ... perhaps I need to use a negative quantity?
Then I looked closer at the MM returns shipment. Initially the GL postings looks correct... what was a credit in the shipment is a debit in the MM Return... but on closer examination I realised the wrong accounts are posted to. The debiting of the Product Asset Account is correct, but instead of crediting the "Product CoGs" (which would the opposite to what happened in the shipment!) the "Not invoiced receipts" account is debited. Then it struck me... these aren't the opposite postings for a shipment but the postings of an AP Receipts!
Another problem I noticed is if you have shipments and returns for teh same customer and run the "Generate Shipments" and select the consolidate tick box then both are combined into one document!! In my test case that resulted in a Credit memo being created for the value of a shipment AND the credit for goods received!
All in all I would say that creating a Sales document of the type "Material Return" to handle a Customer Return is not currently viable.
Now I'm still using 253a so perhaps these issues are addressed in the b & c release? If anybody has and info on that I would be happy to hear it.
How are people in the real world handling customer returns?
Thanks to the input.
** Then I looked closer at the MM returns shipment. Initially the GL postings looks correct... what was a credit in the shipment is a debit in the MM Return... but on closer examination I realised the wrong accounts are posted to. The debiting of the Product Asset Account is correct, but instead of crediting the "Product CoGs" (which would the opposite to what happened in the shipment!) the "Not invoiced receipts" account is debited.
I guess the Window to be used for "Customer Return" is "Shipment (Customer)" instead of "Material Receipt", and the "Material Receipt" allows us to make a "MM Return" which is a return to the vendors. For the return to the customers, which is "Shipment (Customer)", the version of 252d does not differentiate if the shipment is to or from the customer. Therefore we have to use a negative quantity to decrease the both the inventory and cogs of the product(s). The postings that I got is:
51100 Product COGS (Dr): Negative amount
14120 Product Asset (Cr) : Negative amount
While for vendor returns, which requires also a negative quantity entered in "MM Return" (from "Material Receipt" window) has the following postings:
14120 Product Asset (Dr): Negative amount
21190 Not invoiced receipt (Cr): Negative amount
I believe the postings are correctly handled (people in the real world: please correct me if I am wrong) and the only problem I have is with the "negative quantity". I am wondering if the more reasonable postings should be positive amounts and dr/cr switched.
And same to you, I am looking forward to hearing from more experienced users in the live compiere world...Q
Hi again Q
You are right a Shipment (Customer) with a negative quantity will create the postings you mention. And I agree it's works but it would be better to have opposite postings to a shipment rather than negative values.
But the issue I see is, if you use the "Generate shipments" process to create shipments for orders, it will create a MM Return for your Customer Return sales doc not a Shipment (Customer) with a negative value! If it's a single user system then that's no problem ... you can just manually create the Customer Shipment document. But what happens when (as in the real world) there are more users... how do you ensure no one runs the "Generate Shipments" before you manage to manually create the customer shipment?
I suppose we could just remove Generate Shipments from the menu but it's consolidate option is quiet useful.
Of course the Generate Invoices is also potentially very useful but with the conolidate option set it will wrongly merge invoices with credit memos processing all as per the first document in the consolidation!
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