Sales Return
When a previously sold item is sent back, it is termed as a Sales Return.
Businesses frequently encounter situations where goods that have been sold need to be returned. This can occur for various reasons such as quality concerns, failure to deliver on the promised date, or other similar factors.
1. Prerequisites
Before creating and using a Sales Return, it is advised that you create the following first:
2. How to create a Sales Return
- To initiate a sales return process, begin by accessing the original Delivery Note or Sales Invoice for the items being returned by the customer.
- Next, proceed to select ‘Create’ and then ‘Sales Return’. This action will generate a new Delivery Note where the ‘Is Return’ option is automatically checked, and the item quantities, rates, and taxes are indicated with negative values.
- Alternatively, you can also create the return entry directly against the original Sales Invoice to process stock returns alongside a credit note. In this case, ensure to select the “Update Stock” option in the Return Sales Invoice.
- Upon submission of the Return Delivery Note or Sales Invoice, the system will increment the stock balance in the specified Warehouse. To ensure accurate stock valuation, the stock balance will increase based on the original purchase rate of the returned items.
- In the case of a Return Sales Invoice, the customer account will be credited, while the associated income and tax accounts will be debited as illustrated in the Accounting Ledger.
- If Perpetual Inventory is enabled, the system will additionally generate an accounting entry against the warehouse account to synchronize the warehouse account balance with the stock balance as recorded in the Stock Ledger.
3. Impact on Stock Return via Delivery Note
On Creating a Sales Return against a Delivery Note:
- The Returned Quantity in the original Delivery Note along with any Sales Order linked to it, is updated.
- The original Delivery Note’s status is changed to Return Issued if 100% returned: