Supplier returns and credit notes

Start a return

A return can come from a goods receipt, which is the usual case, or name the products directly.

From a receipt: go to Purchasing → Goods receipts, press View on the receipt and press Return to supplier. Or go to Purchasing → Supplier returns and press New return.
Supplier: choose who the goods go back to.
From goods receipt: choose the receipt the goods came in on, or Not from a receipt.
With a receipt, every line of it is listed with how much can still go back and how much is on hand. Enter the Qty on the lines that go back.
Without a receipt, choose Return from (the location) and add each product by name, SKU or barcode.
Choose the Reason on each line: Damaged, Wrong item, Expired, Over-supplied or Other.
Check the Unit cost. From a receipt it is the receipt's cost; otherwise leave it blank to use today's average cost.
Press Save draft. The return gets its number, for example RTV-000001.

Send the return

A draft moves nothing and can still be changed with Edit or dropped with Cancel return.

Open the return and press Send, then confirm.
The goods leave stock at the location straight away. A message says whether the supplier owes a credit note.
Press Download PDF to print the return and send it with the goods, or E-mail to supplier to send it with the PDF attached; you get a copy.

Limits the screen enforces

You cannot return more than a receipt line brought in, less what earlier returns took back.

You cannot return more than is on hand at the location when you press Send.

A sent return cannot be changed. If it was wrong, receive the goods back with a new receipt.

Billed or not billed: who owes what

Not billed yet: if the supplier had not billed the goods when they went back, nothing more is needed. The supplier simply bills less, and Finance → Payables only offers the goods you kept. The return stays Sent and shows Not billed: no credit due.

Already billed: the supplier owes you a credit note. The return shows Awaiting credit with the amount, and the supplier screen shows it under Returns until the credit note is recorded.

One return can be partly both: the detail shows, per line, how much was not billed yet and how much awaits credit.

Record the supplier's credit note

Open the return and press Record credit note.
Supplier's credit note no.: type the number on their credit note.
Credit note date: the date on it.
Amount before VAT: it starts at the value of the returned goods they had billed; change it to what the credit note says.
VAT: it starts as on the supplier's bill. Choose No VAT if the credit note has none.
Check the Credit note total and press Record credit note.

The credit note lowers what you owe the supplier: it is used against their open bills straight away (the bill for the returned goods first), and anything left is used against their next bill. The supplier's statement lists it.

What a return does to stock and the books

Stock goes down at the return's cost, and the average cost of what stays is re-weighted. If the stock runs out, or the goods leave at more than what is left was worth, the difference goes to purchase price variance.

Goods not billed yet release "goods received, not yet invoiced". Goods already billed wait in Supplier returns awaiting credit (account 1160) until the credit note clears it; the credit note also gives back the input VAT the bill claimed.

Suppliers → Returns shows every return to a supplier, the credit notes it sent and what it still owes as credit.