Vendor Return

A vendor return records bought goods going back to the supplier — damaged goods, the wrong item, an over-shipment. It is the reverse of an item receipt: you prepare it as a draft, press Return when the goods physically leave, and later record the vendor credit the supplier sends you in exchange.

Vendor Return vs. Customer RMA

The two are easy to mix up, but they go in opposite directions:

If a customer is sending something back to you, see RMA instead.

Overview

• A vendor return is usually raised from the Item Receipt the goods came in on, which fills in the vendor, purchase order, location, currency, prices and lines.
• Saving it creates a Draft — nothing leaves stock until you run Return.
• Running Return takes the goods out of stock and posts the journal entry.
• Record vendor credit links the supplier's vendor credit to the return and marks it Credited.
• A quality nonconformance can create and send a vendor return for you.

Where to Access

Purchase → Vendor Return, next to Item Receipt. The list shows every return; opening a row opens the Vendor Return form, where the header names the vendor and the receipt the goods came in on, and Items holds what is going back.

Header Fields

• Date/Time – Defaults to now. Cannot be in the future.
• Return Number (required) – Generated for you and editable; must be unique, up to 50 characters.
• Item Receipt – Optional. Choosing one fills vendor, purchase order, location and currency, and adds its lines.
• Vendor (required) – The company the goods go back to.
• Purchase Order – Optional. Filled from the receipt.
• Location – Where the goods leave from. Defaults to your default location, or the receipt's.
• Reason – Up to 200 characters, written for the vendor.
• Exchange Rate – Shown only when multi-currency is on and the currency differs from your company currency.
• Notes – Internal notes.

After the goods have left, the form also shows Returned At, Returned By and Vendor Credit.

Line Fields

• Item – The item going back. The picker offers purchasable items only.
• Quantity / UOM – How much is going back.
• Unit Price – Taken from the receipt when the line was pulled from one.
• Lot / Bin / Serial – Shown under the item when it is tracked that way. The bin list only offers bins in the return's location.
• Amount – Quantity × unit price. Total Amount is the sum of the lines. A vendor return carries no tax.

Key Functions

1. Start a return

   • Go to Purchase → Vendor Return → Add New.
   • Date/Time, Return Number, Location and currency are filled in for you.

2. Pick the item receipt

   • Choose the Item Receipt the goods arrived on. One line is added per receipt line, at the quantity and price received.
   • Remove the lines that are not going back and lower the quantities of the rest.
   • Pull lines from receipt adds any receipt lines not yet on the return, so pressing it twice never doubles anything.
   • You can also skip the receipt, choose a Vendor and use Add a line — but a return raised from its receipt is what gives the quantity back on the purchase order and keeps the vendor's price.

3. Check the lines and save

   • Check Quantity, UOM and Unit Price, fill in Reason and any Notes, and save. The return is now a Draft.
   • Each line is checked against the quantity its receipt line brought in.

4. Send it back

   • When the goods leave, run Return on the row in the list and confirm. You can select several drafts and return them together.
   • After this the return is read-only.

5. Record the vendor credit

   • When the vendor answers, run Record vendor credit on the returned row.
   • Either pick the Vendor Credit you already entered and choose Record credit, or choose Create a vendor credit from this return to open a new vendor credit prefilled with the vendor, currency and lines.
   • The return shows as Credited.

How Status Works

Only a draft can be edited or deleted. Once returned, every field is read-only — the return is now the record of what left, so it stays on the list.

Copy starts a new draft with the same vendor, receipt, reason and lines, without the number, date, status or credit — the quick way to raise a repeat return.

What Happens to Stock and the Books

• Stock – Each line takes its quantity out of stock at the return's location, from its lot, bin and serial numbers.
• Value – The goods leave at what they are worth on your books, not at the price on the return. That value moves out of inventory and into a vendor return clearing account — the Vendor Return Clearing Account set in company settings, or the default inventory adjustment account when none is set.
• Vendor credit – When the vendor credit posts to that same clearing account, the two cancel out. Any difference between what the vendor paid back and what the goods were carried at stays there as a variance. Check the account on the vendor credit before saving it.
• Purchase order – A return raised from a receipt reduces the received quantity on the purchase order line, so the order shows those goods as no longer received.
• Service and non-stock items move no stock and post nothing.

Returns Raised by Quality

With the Quality add-on, running a Return to vendor disposition on a nonconformance report creates the vendor return and sends it back in one step. It is numbered after the report, and its reason and notes name the nonconformance. Record the vendor credit on it the usual way. See Nonconformance (NCR).

Common Problems

• "Return is not offered on the row." It is offered only on drafts, and only to users who can work with item receipts. A returned or credited return has already left.
• "Record vendor credit is not offered." The return must be Returned first. A credited return already has its credit.
• "Save asks for the vendor." Pick a vendor, or pick the item receipt, which fills it.
• "Save says every line needs an item and a quantity." A blank line was left in. Fill it or remove it.
• "Save refuses the quantity." The quantity is more than that receipt line brought in. Lower it.
• "Return fails because the clearing account is not set." Neither a vendor return clearing account nor a default inventory adjustment account is set for the company. Ask your administrator to set one, then run Return again — nothing left stock on the failed attempt.
• "Return fails saying the clearing account is a control account." A control account such as accounts payable cannot be used, because a vendor credit cannot post to it. Ask your administrator for a different account.
• "Return fails because the item's asset account is not set." Set an inventory asset account on the item, or a default one in company settings.
• "Delete or Archive is missing." Both are only offered for drafts.

Best Practices

• Raise returns from the item receipt so the purchase order, prices and lot/serial numbers carry over.
• Write the Reason for the vendor — it is the explanation they will read.
• Run Return only when the goods physically leave, so stock on hand matches the shelf.
• Record the vendor credit as soon as it arrives, so the clearing account stays clean.

Related Features

• Item Receipt
• Purchase Orders
• Procurement Workflow
• Vendors
• RMA (customer returns)
• Nonconformance (NCR)