Goods coming back, or an invoice needing correction after the fact, are handled by different document types from the forward process.
Three situations
| Situation | Document | Stock | Accounting |
|---|---|---|---|
| Goods are returned | Returns order (RE) | Stock comes back | Revenue and receivable decrease |
| Goods stay, value reduced | Credit memo request (CR) | No change | Revenue and receivable decrease |
| Additional amount charged | Debit memo request (DR) | No change | Revenue and receivable increase |
Recall of defective goods is a return; a pricing error or a retrospective discount is value only, so a credit memo; an under-billing or an additional charge is a debit memo.
The returns process
| Step | Activity | Code | What happens |
|---|---|---|---|
| 1 | Create the returns order | VA01 (type RE) | Reference the original invoice |
| 2 | Create the returns delivery | VL01N | Confirm what is being taken back |
| 3 | Post goods receipt | VL02N | Stock returns; cost of sales reverses |
| 4 | Release the billing block | VA02 | After approval |
| 5 | Issue the credit memo | VF01 | Revenue and receivable decrease |
Handling returned stock
Returned goods should not automatically go back into saleable stock; usually they need inspecting first.
SAP can receive returns into blocked stock and move them to unrestricted after inspection, using different movement types.
- Movement type 651: receive into blocked returns stock, excluded from availability
- Movement type 653: receive directly into unrestricted stock
- After inspection, transfer from blocked to unrestricted with movement type 453 or similar
The billing block as a control
Returns orders, credit memo requests and debit memo requests carry a billing block by default, and that is an important control.
A credit memo reduces revenue and is an obvious avenue for fraud. The block ensures a sales person cannot issue one alone; someone else must release it.
Reason codes
Returns and credit memos should carry an order reason — defective, wrong item shipped, customer changed their mind, price error — so that causes can be analysed.
Which products are returned most, which warehouse ships wrong items most — this is where quality improvement starts. Entering the code is only worthwhile if someone aggregates it and feeds it back.
Cancelling an invoice
Where the invoice itself was wrong, cancel it with VF11 rather than issuing a credit memo. Cancellation reverses the FI documents too, leaving the position as though the invoice had never existed.
A credit memo instead records that the invoice was correct and was subsequently reduced. Choose whichever matches what actually happened; once an invoice has been sent to the customer, a credit memo is normally the honest option.