Return Order in Dynamics 365 for Financials: The Easy Way to Manage Return Orders

As Microsoft continuously improves Dynamics 365 for Financials Business Edition, new functionality is released monthly. This new functionality allows for clients running Dynamics 365 for Financials to incorporate this functionality and adjust their internal processes. In the latest release, Microsoft enabled Return Order management.

Organizations that have inventory and already implemented Dynamics 365 have a major gap in functionality. This gap requires manual processes to replace what should be a system-driven process. Before diving into the new Return Order functionality, for comparison, here are some methods organizations may have been using for returning inventory from sales and purchases of inventory.

Creating Credit Memos After Confirmation

Method one is to create credit memos and leave unposted memos as open documents. The organization would need to then wait for either receipt of the goods in a sales process or receive confirmation from the vendor that the goods have been returned in a purchase process.

Inventory that is returned in this manner impacts quantity on hand as the application will distort available inventory for sale. The last issue with this process is that the credit memos need to be posted once confirmation occurs. If this step is missed then the organization may overpay vendors or overstate inventory.

Creating Credit Memos Before Confirmation

The second method is to post the credit memo prior to receiving sales goods or before the vendor accepts the goods for return. There are a few areas of concern with this approach. One being inventory will be over or understated again as the goods are still in transit. Also, it adds additional steps to reduce inventory quantities for sales returns that are no long resalable.

Using Shadow Systems to Manage Returns

The last method that organizations can use is shadow systems such as Excel spreadsheets. With any ERP implementation, one of the key goals is to reduce the use of shadow systems so that you can fully utilize system processes. With shadow systems, additional risks and steps are needed to adjust inventory and process credit memos. This adds to your overhead and a new set of processes that need to be managed with returns.

SQL Server Maintenance Routine

Keep your NAV running smoothly with this 6-Point SQL Server Maintenance Guide

The Saviour That is Return Order Management

That leads us to the new functionality in Dynamics 365. Just search for Return Order and you will find Sales and Purchase Return orders. The very first step will be to set up a number series for each of these types of documents. You will be prompted to do this once you click on the new button for either of the document types.

It should look like this.

 

Return Order Example

 

Once you have the setup complete, you can create a new record. There is an easy button called Get Posted Document Lines to Reverse. This will show you all the invoice lines available to put on the return order.

 

Get Posted Document Lines to Reverse
This function will insert the line and reference the original invoice.

 

Original Invoice Reference
You can post the return now that the lines have been added to the return order. If you are sending the item back, you would post a shipment. For items that are being shipped back, you need to wait until they are back at your location. Upon receipt, you would inspect the goods and decide if you can resell these items or need to dispose of them.

Finalizing and Monitoring the Return Order

To complete the return for your customer, receive and invoice the return order. At this point in time the goods will be placed back into inventory and the customer will be credited for the goods which will reduce your accounts receivable. You can view the posted credit memo and send it to the customer.

 

Receive and Invoice
Adding the Return Order process to Dynamics 365 for Financials will allow for monitoring of inventory returns without inflating quantity on hand or inventory available for sale while reducing shadow systems and work around.

 

Like What You've Read? Subscribe to our Newsletter!

 

If you have further questions about Dynamics 365 for Financials or more, please comment below or contact us here.

Share this post

Leave a Comment

Your email address will not be published. Required fields are marked *

*

Narrow your topic

Archives

Get ERP & CRM Insights

Subscribe for the latest ERP/CRM Insights delivered to your inbox.