Process purchase returns or cancellations

If you want to return items to your vendor or cancel services you purchased, you can create and post a purchase CR/Adj note that specifies the requested change to the original purchase invoice. To include the correct purchase invoice information, you can create the purchase CR/Adj note directly from the posted purchase invoice or you can create a new purchase CR/Adj note with copied invoice information.

If you need more control of the purchase return process, such as warehouse documents for the item handling or better overview when shipping back items from multiple purchase documents with one purchase return, then you can create purchase return orders. A purchase return order automatically issues the related purchase CR/Adj Note. Learn more at To create a purchase return order based on one or more a posted purchase documents.

Note

If a posted purchase invoice isn't paid, you can use the Correct or Cancel actions on the posted purchase invoice to automatically reverse the transactions. These actions only work for unpaid invoices, and they don't support partial returns or cancellations. Also, you can't correct or cancel purchase invoices that were posted with receipts from more than one purchase order. Learn more at Correct or Cancel Unpaid Purchase Invoices.

Typically, you create a purchase CR/Adj note or purchase return order in reaction to a CR/Adj note sent to you by a vendor. You can use purchase CR/Adj notes or purchase return orders to document your CR/Adj note process. For example, they're useful for accounting purposes or to control the shipping of the items.

The change might relate to all or only some of the products on the original purchase invoice. Accordingly, you can partially return received items or ask for partial reimbursement of received services. In that case, you must edit the information on the purchase CR/Adj note or purchase return order.

In addition to the original posted purchase invoice, you can apply the purchase CR/Adj note or purchase return order to other purchase documents. For example, another posted purchase invoice because you're also returning items delivered with that invoice.

The CR/Adj note posting also reverts item charges that were assigned to the posted document, so that the item's value entries are the same as before you assigned the item charge.

Inventory costing

To keep inventory valuation correct, you typically want to pick return items from inventory at the unit cost that they were purchased at, not at their current unit cost. This process is referred to as exact cost reversing.

There are two actions that assign exact cost reversing automatically.

Function	Description
Get Posted Document Lines to Reverse action on the Purchase Return Order page	Copies lines of one or more posted documents to be reversed into the purchase return order. Learn more at To create a purchase return order based on one or more posted purchase documents.
Copy from Document action on the Purchase CR/Adj Note and Purchase Return Order pages	Copies both the header and lines of one posted document to reverse. Requires that the Exact Cost Reversing Mandatory checkbox is selected on the Purchases & Payables Setup page.

To assign exact cost reversing manually, choose the Appl.-from Item Entry field on any type of return document line, and then select the number of the original purchase entry. This setting links the purchase CR/Adj note or purchase return order to the original purchase sales entry. It also ensures that the item is valued at the original unit cost.

Learn more at Design Details: Inventory Costing.

To create a purchase CR/Adj note from a posted purchase invoice

1. Choose the icon, enter Posted Purchase Invoices, and then choose the related link.

2. On the Posted Purchase Invoices page, select the posted purchase invoice that you want to reverse, and then choose the Create Corrective CR/Adj Note action.

   Most fields on the purchase CR/Adj note header are filled with the information from the posted purchase invoice. You can edit all the fields, for example with new information that reflects the return agreement.

3. Edit information on the lines according to the agreement, such as the number of items returned or the amount to be reimbursement.

4. Choose the Apply Entries action.

5. On the Apply Vendor Entries page, select the line with the posted purchase document that you want to apply the purchase CR/Adj note to, and then choose the Applies-to ID action. The number of the purchase CR/Adj note is inserted in the Applies-to ID field.

6. In the Amount to Apply field, enter the amount that you want to apply if smaller than the original amount.

   At the bottom of the Apply Vendor Entries page, you can see the total amount to apply to reverse all involved entries, namely when the value in the Balance field is zero.

7. Choose the OK button. When you post the purchase CR/Adj note, it's applied to the specified posted purchase documents.

8. Choose the Post action.

The posted purchase invoices that you apply the CR/Adj note to are now reversed. If you already paid the original invoice, the vendor should now refund the payment to you. If the CR/Adj note is only for part of the product on the original invoice, you might only pay the remaining amount on the original purchase invoice to close it.

The purchase CR/Adj note is removed and replaced with a new document in the list of posted purchase CR/Adj notes.

To create a purchase CR/Adj note by copying a posted purchase invoice

1. Choose the icon, enter Purchase CR/Adj Notes, and then choose the related link.
2. Choose the New action to open a new empty purchase CR/Adj note.
3. In the Vendor field, enter the name of an existing vendor.
4. Choose the Copy from Document action.
5. On the Copy Purchase Document page, in the Document Type field, select Posted Invoice.
6. Choose the Document No. field to open the Posted Purchase Invoices page, and then select the posted purchase invoice that contains lines that you want to reverse.
7. Select the Recalculate Lines check box if you want the copied posted purchase invoice lines to be updated with any changes in item price and unit cost since the invoice was posted.
8. Choose the OK button. The copied invoice lines are inserted in the purchase CR/Adj Note.
9. Complete the purchase CR/Adj Note as explained in To create a purchase CR/Adj Note from a posted purchase invoice.

To create a purchase return order based on one or more posted purchase documents

1. Choose the icon, enter Purchase Return Orders, and then choose the related link.

2. Choose the New action.

3. Fill in the fields on the General FastTab as necessary.

4. On the Lines FastTab, fill the lines manually, or copy information from other documents to fill the lines automatically:

   • Use the Get Posted Document Lines to Reverse action to copy one or more posted document lines from one or more posted documents. This action always exactly reverses the costs from the posted document line.
   • Use the Copy from Document action to copy an entire existing document to the return order. It can be either a posted or unposted document. This action only enables exact cost reversing when the Exact Cost Reversing Mandatory checkbox is selected on the Sales & Receivables Setup page.

5. Choose the Get Posted Document Lines to Reverse action.

6. At the top of the Posted Purchase Document Lines page, select the Show Reversible Lines Only checkbox if you only want lines that have quantities that aren't yet returned. For example, if a posted purchase invoice quantity was already returned, you might not want to include that quantity on a new purchase return document.

   Note

   This field only works for posted receipts and posted invoice lines. It doesn't work for posted return or posted CR/Adj note lines.

   The left side of the page lists the different document types. The number in brackets shows the number of documents available of each document type.

7. In the Document Type Filter field, select the type of posted document lines you want to use.

8. Select the lines that you want to copy to the new document.

   Note

   If you use Ctrl+A to select all lines, all lines within the filter you set are copied, but the Show Reversible Quantity Only filter is ignored. For example, suppose you filtered the lines to a particular document number with two lines, and one of which was already returned. Even if the Show Reversible Quantity Only field is selected, if you select Ctrl+A to copy all lines, both lines are copied, instead of only the one that isn't reversed.

9. Choose the OK button to copy the lines to the new document.

   The following processes occur:

   • For posted document lines of the type Item, a new document line is created as a copy of the posted document line, with the quantity that isn't reversed yet. The Appl.-to Item Entry field shows the number of the item ledger entry of the posted document line.

   • For posted document lines that aren't of the type Item, such as item charges, a new document line is created as a copy of the original posted document line.

   • Calculates the Unit Cost (LCY) field on the new line from the costs on the corresponding item ledger entries.

   • If the copied document is a posted shipment, posted receipt, posted return receipt, or posted return shipment, the unit price is calculated automatically from the item.

   • If the copied document is a posted invoice or CR/Adj Note, the unit price, invoice discounts, and line discounts from the posted document line are copied.

   • If the posted document line contains item tracking lines, the Appl.-to Item Entry field on the item tracking lines is filled with the appropriate item ledger entry numbers from the posted item tracking lines.

   When you copy from a posted invoice or posted CR/Adj note, you copy the invoice discounts and line discounts that were valid at the time the document posted. Be aware, however, that if the Calc. Inv. Discount toggle on the Purchases & Payables Setup page is turned on, the invoice discount recalculates when you post the new document line. The amount for the new line might therefore be different than the line amount for the posted document line, depending on the new calculation of the invoice discount.

   Note

   If part of the quantity of the posted document line is reversed, sold, or consumed, a line is created for the quantity that remains in inventory or that wasn't returned. If the full quantity of the posted document line was already reversed, a new document line isn't created.

   If the flow of goods in the posted document is the same as the flow of goods in the new document, a copy of the original posted document line in the new document is created. The Appl.-from Item Entry field isn't filled in because exact cost reversing isn't possible. For example, if you use the Get Posted Document Lines to Reverse action to get a posted purchase CR/Adj note line for a new purchase CR/Adj note, only the original posted CR/Adj note line is copied to the new CR/Adj note.

10. On the Purchase Return Order page, in the Return Reason Code field on each line, select the reason for the return.

11. Choose the Post action.

To create a replacement purchase order from a purchase return order

You might agree with your vendor that they compensate you for a purchased item by replacing the item. The replacement item can be the same or it can be different. This situation could occur if the vendor mistakenly shipped the wrong item.

1. On the Purchase Return Order page for an active return process, on an empty line, make a negative entry for the replacement item by entering a negative amount in the Quantity field.
2. Choose the Move Negative Lines action.
3. On the Move Negative Purchase Lines page, fill in the fields as necessary.
4. Choose the OK button. The negative line is deleted from the purchase return order, and a new purchase order is created. Learn more at Record Purchases.

To create a purchase allowance

If you receive items that what you want, for example, the items are damaged, the wrong colour, or the wrong size, the vendor might offer you a purchase allowance.

You can post this reduced purchase cost as an item charge on a CR/adj note or return order and link it to the posted receipt. The following steps describe it for a purchase return order, but the same steps apply to a purchase CR/Adj note.

1. Choose the icon, enter Purchase CR/Adj Notes, and then choose the related link.

2. Choose the New action to open a new empty purchase CR/Adj note.

3. Fill in the CR/adj note header with information about the vendor who sent you the purchase allowance.

4. On the Lines FastTab, in the Type field, select Charge (Item).

5. In the No. field, select the appropriate item charge value.

   You might want to create a special item charge number to cover purchase allowances.

6. In the Quantity field, enter 1.

7. In the Direct Unit Cost field, enter the amount of the purchase allowance.

8. Assign the purchase allowance as an item charge to the items in the posted receipt. For more information, see Use Item Charges to Account for Additional Trade Costs. After you assign the allowance, return to the Purchase CR/Adj Note page.

When you post the purchase return order, the purchase allowance is added to the relevant purchase entry amount. In this way, you can maintain accurate inventory valuation.

To combine return shipments

If you want to return items covered by different purchase return orders to the same vendor, you can use the Combine Return Shipments action.

When you ship the items, you post the related purchase return orders as shipped, which creates posted purchase return shipments.

When you're ready to invoice these items, instead of invoicing each purchase return order separately, you can create a purchase CR/Adj note and automatically copy the posted purchase return shipment lines to it. Then you can post the purchase CR/Adj note and invoice all the open purchase return orders at the same time.

When return shipments are combined on a CR/Adj Note and posted, then a posted purchase CR/Adj Note is created for the invoiced lines. The Quantity Invoiced field on the originating purchase return order is updated based on the invoiced quantity. However, the original purchase return order isn't deleted, even if it was fully received and invoiced. You must delete the purchase return order manually.

Note

The following procedure assumes that there are several purchase return orders for the vendor, and that they're posted as shipped.

1. Choose the icon, enter Purchase CR/Adj Notes, and then choose the related link.

2. Choose the New action.

3. On the General FastTab, fill in the fields as necessary.

4. Choose the Get Return Shipment Lines action.

5. Select multiple return shipment lines that you want to include in the invoice.

   If an incorrect return shipment line was selected or you want to start over, you can just delete the lines on the purchase CR/Adj note and then use the Get Return Shipment Lines action again.

6. Choose the Post action.

To remove open purchase return orders after combined return shipment posting

1. Choose the icon, enter Delete Invoiced Purchase Return Orders, and then choose the related link.
2. Fill in the fields as necessary, and then choose the OK button.
3. Alternatively, delete the individual purchase return orders manually.

Related information

Purchasing
Record Purchases
Correct or Cancel Unpaid Purchase Invoices
Work with Business Central
Process Sales Returns or Cancellations

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