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Openbravo QuickStart 2User Manual

Chapter 05 – CustomerReturn to Credit

v2.0.1

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Introduction .................................................................................. 1Abstract Business Process ............................................................. 1Roles Involved ............................................................................... 2Configuration ................................................................................. 2

Storage Bins .................................................................................. 0Step-by-Step.................................................................................. 3

Return Merchandise Authorization (RMA) ...........................................3Receive Returned Product ................................................................ 5Inspect ......................................................................................... 7

Store ......................................................................................... 7Refurbish.................................................................................... 7Dispose ...................................................................................... 8

Credit Customer ............................................................................. 8Pay Off Customer ......................................................................... 10

Accounting................................................................................... 10Configuration ............................................................................... 10Posting of the Sales Invoice ........................................................... 11

Allow Negative = Y .................................................................... 11Allow Negative = N .................................................................... 11

Introduction

This workflow manages the return of goods from a customer that results in additionalcredit to that customer:

• Authorization of returning a product• Receive and handle the returned product• Credit the customer and manage the pay off or settlement

Abstract Business Process

The abstract customer return to credit process is defined by the following diagram:

The following sub-processes form it:• Return Merchandise Authorization (RMA) - authorize the return of a product• Receive Returned Product - receive the product into the warehouse• Inspection and depending on the outcome:

◦ Store the product◦ Dispose the product◦ Refurbish (Repair) the product

• Credit Customer - credit the customer with the value of the returned product• Pay Off Customer - manage the reimbursement or settlement

Roles Involved

The following roles are involved with this process:• Finance - this role authorizes returns and credits• Material Management - receive the product and handle it appropriately within

the warehouse

Configuration

Before this process can be used, the following elements need to be configured first:• Specific Storage Bins that can hold:

◦ Recently received items◦ Items waiting for refurbishing◦ Items to be thrown away (disposed)

Storage Bins

Please see Wall to Wall Accuracy Count chapter for more information on how to setupwarehouses and storage bins. Normally three separate bins should be configured forstoring returned items:

1. a bin for recently returned items waiting for inspection2. a bin for items pending to be refurbished3. a bin for items pending to be disposed of

Name bins that store returned items in a very clear manner and be careful not to shipfrom there because these bins contains items that are supposed not available. Be carefulalso when looking at available quantities, because this material is included in theaggregate availability.

Here is an example of a configuration:

Step-by-Step

Return Merchandise Authorization (RMA)

The Finance role should be used.

When a customer requests a product to be returned, the finance department mustrecord and authorize this request. In Openbravo, this is done using the standard SalesManagement || Transactions || Sales Order window. Create a new header with theBusiness Partner it applies to:

Fields to note:• Description - enter a reason for the return of this particular merchandise• Transaction Document - a Standard Order should be used for RMA documents.

Note: Do not use the Returned Material transaction document.• Business Partner - the customer that is returning the item• Invoice Terms - After Delivery should be used which means the customer will

get credited for returned items once the goods are received back into thewarehouse

• Warehouse - select the correct warehouse which contains the bin wherereturned items are stored

• Order Reference - if possible enter the number of the original order thattriggered the delivery of this item

• Sales Representative - the person who authorized a return

Then, move to the [Lines] and enter the products that are being returned. Create a linefor each product that is returned, entering the quantity in negative:

Fields to note:• Product - select the product that is being returned• Attribute Set Value - enter or select an attribute in case the product supports

them as an additional description• Ordered Quantity - enter the quantity being returned in negative• Unit Price - make sure the price here is the one that will be used to credit back

the customer

Complete the document back in the [Header].

Note: In case a whole order of several items has been returned, the use of the Copyfrom Order button that copies all lines from the selected order to the current ones mightsimplify the entering. However, keep in mind that you still need to go through all thelines and make the amounts negative.

Receive Returned Product

The Material Management role should be used.

Once goods have been received to the warehouse, use the Sales Management ||Transactions || Goods Shipment window and create a new record for the BusinessPartner that has sent the returned items:

Using the Create Lines From button, find and select the RMA document (see Orderdropdown and look for pending items for shipment for that particular business partnerthat have negative amounts) and check off all the items that have been received:

Fields to note:• Business Partner - this will be automatically preselected according the the

Business Partner you have entered in the header of the document previously• Order - list of pending orders from that specific business partner to be sent or

returned, look at the lines with negative amounts• Warehouse Position - select the storage bin where returned items should be

stored

Go to the [Lines] and double check that they correspond exactly to the items actuallyreturned:


Use the Warehouse Management || Analysis Tools || Product Movements reportto make sure the transaction was done correctly. For example:

You can also take a look at the Warehouse Management || Analysis Tools || StockReport to see current status of the inventory of products.

Inspect

There is no process within Openbravo that specifically supports inspecting the receiveditems and recording their state. As a workaround, the Goods Shipment documentdiscussed previously has Description fields that can be used to add details on returneditems. Moreover, by placing them in a specific storage bin dedicated to items pending tobe inspected, they are kept separately and can this way be tracked.

Once the goods have been received and inspected, they will normally follow one of thepaths:

1. be stored back into the normal warehouse if the goods are good to be soldagain

2. be thrown away if they cannot be used again3. be refurbished (repaired) and then stored back into the normal warehouse to

be sold again

Regardless of the case, the Wall to Wall Accuracy Count chapter discusses documentsrequired to support these processes so please see that chapter for more details on howto create individual documents.

Note: After each of these processes, we recommend you check the WarehouseManagement || Analysis Tools || Stock Report that is available to the MaterialManagement role. This way you can double check what the current status in thewarehouse is.

Store


In order to store the returned item(s) and enable them to be sold again, use theWarehouse Management || Transactions || Goods Movement document to movethem from the Returned bin to the standard warehouse location where these items arestored. Please refer to the Wal to Wall Accuracy Count chapter for details on how to usethis document.

Refurbish


Openbravo does not support any specific documents to record the refurbishment.Instead, this process is done in two steps:

1. Mark the goods as ones to be refurbished by moving them to a specific "To berefurbished" storage bin using the Warehouse Management || Transactions|| Goods Movement document

2. Once the items are refurbished move them back to the standard warehouselocation using the Warehouse Management || Transactions || GoodsMovement document from where they can be sold again.

Please refer to the Wall to Wall Accuracy Count chapter for details on how to createthe Goods Movement documents.

Dispose


If items that have been received back need to be disposed, follow the two steps:1. Move the returned items into a specific "Dispose" bin using the Warehouse

Management || Transactions || Goods Movement document2. After they have been physically thrown away, enter a Warehouse

Management || Transactions || Physical Inventory document to set theirstock level to zero.

Please refer to the Wall to Wall Accuracy Count chapter for details on how to createthe above documents.

Credit Customer


In order to enter credit to the customer that has returned the merchandise, use theSales Management || Transactions || Sales Invoice document to create a new one:

Fields to note:• Business Partner - select the Business Partner to be credited• Transaction Document - select the AR Invoice one. Note: Do not use the AR

Credit Memo transaction document!• Payment Terms - select Immediate since money is owed to them starting from

that moment

Then, click the Create Lines From button in order to select the previosly createdGoods Shipment that recorded the returned items and select all items to credit:

Fields to note:• Business Partner - this will be automatically preselected according the the

Business Partner you have entered in the header of the document previously• Shipment/Receipt - select the negative shipment that recorded the receipt of

returned items


To see the customer's credit, use the Master Data Management || Business Partnerwindow and look at the [Customer] tab, Credit Used field:

The negative number in the Credit Used field indicates that we owe money to thecustomer and not the other way around.

Pay Off Customer

As a result of completing a Sales Invoice document with negative amounts, a paymentplan (Accounts Receivable) is generated.

However, this receivable has a negative amount indicating that we owe this moneydespite it being a receivable.

There are two options of compensating the customer now:1. The amount could now be paid back directly to the customer using a Receive

Payment.2. This amount could be settled with one of the future sales invoices issued to the

same customer by selecting both as details of next Payment Receive.

For more information on the above document please see the Collection and theSupplier Payment Management chapter.

Accounting

Configuration

The Company Admin role should be used.

Apart from the regular configuration of accounting for business partner and products,there is another setting that affects the posting of negative amounts. Navigate to theFinancial Management || Accounting || Setup || Accounting Schema and selectthe schema used. Find the Allow Negative checkbox:

If this is NOT CHECKED, negative amounts will be posted as positive but will switch thecredit/debit side. If this box IS CHECKED, then negative amounts will be posted asnegative to their originally configured credit/debit side.

Posting of the Sales Invoice


Allow Negative = Y

When the Sales Invoice is posted with the Allow Negative setting of the Accountingschema switched ON, the posting to the general ledger is done this way:

Allow Negative = N

When the Sales Invoice is posted with the Allow Negative setting of the Accountingschema switched OFF, the posting to the general ledger is done this way: