The returns process deals with the business process of returning goods to the Supplier. It also deals with receiving credit for the returned items.
Why are Items Returned?
There are many reasons why ordered items may need to be returned, including:
- Inferior quality
- Incorrect material specifications
- Damaged or defective material
- Material near end of life
- Delivery errors
- Excess of stock
Document Types for Returns Collaboration
There are three essential document types for Returns Collaboration:Return Purchase Order
- A Returns Purchase Order is a standard Purchase Order.
- A line item can be marked as a "return" item.
- A Purchase Order is designated as a Returns Purchase Order if at least one line item is marked as a return item.
- Ship Notices are sent in advance of shipments.
- Advance Ship Notices are sent by Suppliers to Buyers to notify them of shipments.
- Return Ship Notices are sent by Buyers to Suppliers to notify them of return shipments.
- A Credit Memo is a type of Invoice.
- A Credit Memo is used to credit payment back to a Buyer.
- A Credit Memo represents the amount the Supplier is crediting to the Buyer for the return of goods.
We will learn about each of these document types in this unit. We’ll describe what they are and how each one fits into the overall process flow for Returns Collaboration.