When an item that has been purchased is returned to the supplier, it is referred to as a Purchase Return.

The Purchase Return functionality allows you to send back products to the supplier for various reasons, such as defects in the goods, discrepancies in quality, or the buyer’s surplus stock.

1. Prerequisites

Before creating and using a Purchase Return, it is advised that you create the following first:

• Item
• Purchase InvoiceOr

  Purchase Receipt

2. How to create a Purchase Return

1. First, access the original Purchase Receipt for the items provided by the supplier.
2. Then, select ‘Create’ followed by ‘Return’. This action will generate a new Purchase Receipt with the ‘Is Return’ option activated. The items, rates, and taxes will display as negative numbers.
3. Upon submission of the Return Purchase Receipt, the system will reduce the quantity of items from the specified warehouse. To ensure accurate stock valuation, the stock balance will adjust according to the original purchase rate of the returned items.
4. In the Accounting Ledger, the Stock In Hand account will be credited, while the Stock Received but Not Billed account will be debited.

If the Perpetual Inventory feature is enabled, the system will also generate an accounting entry against the warehouse account to synchronize the warehouse account balance with the stock balance as per the Stock Ledger.

3. Impact on Stock Return via Purchase Receipt

On Creating a Purchase Return against a Purchase Receipt:

• The Returned Quantity in the original Purchase Receipt along with any Purchase Order linked to it, is updated.
• The original Purchase Receipt’s status is changed to Return Issued if 100% returned:

4. Related Topics

1. Sales Return
2. Perpetual Inventory