Dynamics GP
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Return w/Credit
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Return w/Credit
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Hi everyone,Some of our folks got the idea to use the Return w/Credit option when returning some inventory that was received in error.
We have never used this in GP, so I wanted to know your thoughts on the proper way to clear this transaction. We have the A/P, Purchasing, and Inventory modules set up. Here’s the story:
PO1234 was created for vendor XYZ Co. for $100,000 for a quantity of an inventory item.
$60,000 of material was correctly received against PO1234 and invoiced – no issues. The remaining PO balance is $40,000.
$40,000 of material was received (DR Inventory, CR RNI account – Received Not Invoiced) against the PO. The remaining PO balance was $0.00.
Material was noticed to be damaged after receipt, and immediately returned to the vendor. When processing this through the system, we used the Return W/Credit option. This created an RET document type. It created a CR to Inventory for $40,000 (good, that clears Inventory), and the DR went to the RNI account, but the document type in the G/L distribution noted it was a PAY.
The vendor noted that they will not send an invoice to us for this as the item was returned right away. And, then we closed the PO and sent it to history. Because of the return, the PO balance was back to $40,000.
Currently, we have an open item on our A/P aging, and a debit sitting in our RNI account. Our A/P aging does not match the G/L balance, and the RNI G/L account does not match our open PO balance.
I believe that the only way to clear this out is to enter a dummy credit memo to this vendor, and CR the RNI G/L account. We then apply the RET to the dummy debit memo. Does this solution make sense? Thank you to whomever is reading through this story.
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Anthony Guanci
Sr. Manager, Accounting
MorphoTrust USA
Billerica MA
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Hi,
For the way the return was done, it looks like the Return for Credit also had the box checked that you were not only expecting an invoice from the vendor, but also expecting the items to be replaced. If they were replaced, you would be able to receive them again on your PO. I think, given your situation, that the only way to clear this is to issue a fake debit document to that vendor and then apply your credit against it. Then you’ll need to cancel the remaining items on the PO and clear out your RNI account. If this comes up again, it would be better to just do a return and not check any of the boxes.
Kind regards,Leslie
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Leslie Vail
Accounting Systems Consulting, Inc.
Dallas TX
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Hi,
For the way the return was done, it looks like the Return for Credit also had the box checked that you were not only expecting an invoice from the vendor, but also expecting the items to be replaced. If they were replaced, you would be able to receive them again on your PO. I think, given your situation, that the only way to clear this is to issue a fake debit document to that vendor and then apply your credit against it. Then you’ll need to cancel the remaining items on the PO and clear out your RNI account. If this comes up again, it would be better to just do a return and not check any of the boxes.
Kind regards,Leslie
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Leslie Vail
Accounting Systems Consulting, Inc.
Dallas TX
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