Process a Sales Return (Credit Memo)

There are two types of Credit Memos in AcctVantage:

  1. Associated
  2. Unassociated (i.e. standalone, not associated with the original sales order).

1. Associated Credit Memo

Associated Credit Memos:

  • Are linked to the original Sales Order.
  • Contain a reference to the original Invoice Number.
  • Returns can be processed only for line items that were entered on the Original Order.
  • Inventory items will be automatically returned to the Lots they were drawn from.
  • The cost used will be the same as the original Lot cost.

Other notes:

  • The line items on a Credit Memo are treated as a reverse of Sales Orders. Saving the Credit Memo in Picked status creates inventory transactions and results in the units being available for resale. These units will appear on the Product record as Qty In Non-Posted until the Credit Memo is Posted.
  • By default the units will be automatically returned to the Warehouse they were drawn from. However, there is an option to change the Warehouse on each line item of a Credit Memo. To return a line item to a different Warehouse, make this column visible (in System Configuration under the Line Item Detail tab) and then enter a different Warehouse in this column. (See Step 3 of this article.)

1.1. Create an Associated Credit Memo

To create a Credit Memo that will be linked with the original Sales Order:

  1. Go to the Sales Orders & Quotes list view and highlight the Sales Order.
  2. Open the Action Menu and select Create a Credit Memo.
Create an Associated Credit Memo

1.2. Associated Credit Memo is created.

Associated Credit Memo is created.

2. Unassociated Credit Memo

Unassociated Credit Memos:

  • Are NOT linked to any Sales Order.
  • Returns can be processed for any items.
  • A new Lot is created for returned Inventory items.
  • The cost that will be used for the new Lot is dependent on a setting in Administration -> System Configuration. Under the Sales Document heading there is a setting for Unassociated Credit Memo Cost.
    • There are 3 options to choose from:
    • Current Average Cost: the system will use the Current Average Cost for the new Lot only if the cost is > $0.00 in the return Warehouse.
      • If the cost equals $0.00 in the return Warehouse, then the system will use the Default PO Cost instead of the Current Average Cost. The reason for this is so you don't end up with Inventory items carried at $0.00 value.
    • Default PO Cost: the system will always use the Default PO Cost for the new Lot, regardless of how many units are on-hand or what the average cost is.
    • Use Script: - this option would necessitate a special project. The logic as to 'what cost to use and when to use it?' would be determined by the specifications of the project.

2.1. Create an Unassociated Credit Memo

To create a Credit Memo that will not be linked to any Sales Orders:

  1. Go to the Sales Orders & Quotes list view and do not highlight any Sales Orders.
  2. Open the Action Menu and select Create a Credit Memo.
  3. You will be presented with a confirmation dialog box (see next screenshot.)
Create an Unassociated Credit Memo

2.2. Create a Credit Memo not associated with an invoice?

Create a Credit Memo not associated with an invoice?

2.3. Unassociated Credit Memo is created.

  • You are now presented with a blank, unassociated Credit Memo.
  • You can issue this Credit Memo for any Client, for any items and for any quantities that you wish.

If the credit memo is for non-inventory purposes (e.g. overpayment, overcharge, refund, etc) then you'll need to use a non-inventory line item.

Unassociated Credit Memo is created.

3. Returning items to an alternate Warehouse (optional)

By default, units returned on a Credit Memo are immediately returned to Inventory and are available for committing to new Sales Orders when the Credit Memo is Picked. You may wish to return items to a separate virtual Warehouse, so that they may be inspected and/or scrapped if appropriate. To use this function, follow these steps:

  1. Create a new Warehouse. (You could name it something like "Scrap" or "Returns.")
  2. Make the Warehouse column on Sales Order line items Visible and Enterable. (in System Configuration under Line Item Detail)
  3. Select the alternate Warehouse for each appropriate line item on the Credit Memo.
  4. After posting the Credit Memo, determine whether the returned units are acceptable for resale, or should be scrapped.