Dynamics F/SCM Customer Experience (CRM) Dynamics GP Dynamics Business Central (NAV) Dynamics SL Power Platform Fabric Copilot

[Ryan Porter]

We are currently in the middle of training on our new 2017 NAV system.  An issue came up in our training today for which I searched the forum, but was unable to find an answer.  Some posts were close, but not quite our situation.  Posting to see how other might handle this situation.

We sell live plants which are obviously perishable.  At times, due to quality issues or transportation issues, the product arrives at the customer, but is unacceptable.  In most cases, it does not make sense to return the product as the plants cannot survive both the return trip nor being reshipped.  

We are trying to find the best way to enter credit to the customer and account for the loss in our system, while at the same time, tie the loss to the sale?  We have tried tying the credit to the line item on the sales order, but have not been able to give the credit without also receiving the items back into inventory.  One thought was to receive the inventory back in the system (possibly to a dummy warehouse) and then scrap it, but that seemed a little messy to me.  

Question:  Has anyone had experience issuing credits on sales for which the product is NOT returned?  If so, I’m interested in how you handle it?  My experience with NAV is limited as we are new to the NAV world and would like to draw on the experience of this forum.

Thanks for any help you might be able to provide.

——————————
Ryan Porter [Designation]
Controller
Milgro Nursery
——————————

[David Wiser]

The messy process you noted is generally the best as far as I know.  While you could just credit the customer by posting a credit memo hitting a sales contra account for the amount, this would only solve the GL and customer balance issue.  However this would not address the tracking of inventory or recording accurate sales quantities.  You would need to show the credit as a reduction in sales quantity so that you would accurately report on sales quantity.  And if you subsequently reshipped product as replacement, you would show double the sales quantity unless you also recorded the return.

One modification that I have seen is to include a checkbox on the sales credit memo line indicating whether the product was being returned.  If the box was checked, then the return was processed but then a negative adjustment was immediately posted to remove the product from inventory.  The adjustment used the same document number so it kept the whole transaction together.  This approach is really just automating the process you noted previously.

——————————
Dave Wiser
Controller
Beckwith & Kuffel
Seattle WA
——————————
——————————————-

[Paul Simpson]

I’d agree with Dave Wiser as that being the most sensible route.

I would suggest being sure to use NAV’s Return Reason Codes as you can get that to direct the returns automatically to a separate Location (called “dummy warehouse” or “customer scrap for refund”) so the user doesn’t have to remember to do so to ensure they’re not inadvertently returned back to your main shipping Location(s). You may find those Return Reason Codes could become very useful for reporting down the line if you don’t already have systems in place for that.

——————————
Paul Simpson
Business Analyst
Vado
Cheddar
——————————
——————————————-

[Kari Strandberg]

We create the Sales Credit Memo with a Return Reason Code (Damage).  The Return Reason Code is set to a Default Location (Damage).

The inventory that goes into the Default Location (Damage) is moved out of that location through the Phys Inventory Journal.  The Cost of the Damaged product is expensed as Damage (set up through Gen Business Posting Group used on the Physical Inventory Journal entries). 

Sales Credit Memo:
Dr. Sales   Cr. A/R
Dr. Inventory   Cr.  COG

Physical Inventory Journal Posting:
Dr. Damage  Cr.  Inventory

Most of our functionality is standard NAV code.  We have some custom code regarding the Phys Inventory Journal process to capture dimensions the way we need them.

Hopefully this will give you thought for another way to manage your damaged product

——————————
Kari Strandberg
Accounting Manager
Bernatello’s Pizza, Inc
Maple Lake MN
——————————
——————————————-

[Jim Brewer]

Maybe I’m over simplifying this, but since the product is already out of the system, why not use a Sales Journal entry to generate a Credit Memo line and post it? It wouldn’t create a Posted Sales Credit Memo with headers and detail lines, but as I understand it, you’re just trying to credit the Customer for dollars. I hope this helps!

——————————
Jim Brewer
Silverware
Phoenix AZ
——————————
——————————————-

[Zack Monroe]

It might not be the best way, but we also come across similar situations.  We created a resource that we use in credit memos for inventory that we cannot/ will not get back in and want to be able to create a document to effect sales and AR.

——————————
Zack Monroe
South Atlantic, LLC
Wilmington NC
——————————
——————————————-

[Major Williams]

we perform this the messy way. return to a virtual warehouse or bin and it is reviewed and cleared out each month.

If you are not concerned with sending the customer CM document, you can post a sales journal instead.  This would provide a credit towards the invoice. There is not a document associated with it.

——————————
Major Williams
Farmers Investment Co
Sahuarita AZ
——————————
——————————————-

[Ryan Porter]

Just wanted to say thanks for the thoughts on this subject.  Being new to NAV, I felt maybe we were missing something.  After reading the comments, it appears we are headed in the right direction.  We are going to try the different methods mentioned and see which one best meets our needs.  

Really appreciate this Forum!

——————————
Ryan Porter [Designation]
Controller
Milgro Nursery
——————————
——————————————-