difference betn credit memo n credit memo for returns

[Former Member]

Hi,

What is difference betn credit memo n credit memo for returns?

[Former Member · Accepted solution]

Hi

CREDIT MEMO:

Suppose, you have chrged (Price) the customer more or you have charged the customer for say 10 pieces but you have send actually 8 pieces,for which customer has paid you.

In both the above scenarios, you need to pay back the excess amount paid by him.

To payback, we create a Billing document called Credit memo. In standard SAP, Billing Type G2 is created for Credit memo.

This Credit memo(G2) is created with reference to a Credit memo request (Sales document type) with Order type "CR".

This Credit memo Request (CR) is created either with reference to Sales order or Billing document.

Ofcourse, it can also be created with out any reference document also. In real time scenario, we normally create this Credit memo Request with reference to the Billing document (Invoice).

No Delivery takes place in this scenario while creating a Credit memo (G2).

CREDIT FOR RETURN

When goods are physically returned back by the customer due to some complaint, then we first, create a Return order(Order Type RE) with reference to either Sales order or Billing document. Normally, in real time scenarios, we refer the Billing document.

Return order can also be created with out any reference .

In situation like, suppose you had sent 10 pieces of certain material to the customer for which he has paid. But he found that 2 pieces are defective or damaged in transit. So he has returned it to you for which you need to create a Return order(RE).

From this Return order(RE) -

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> Return Delivery is created -

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> PGR.

As customer has returned the goods to you, then there are 2 options with you. Either you may send fresh stock ,which we normally call "Replacement" OR you may pay back the value for the returned goods.

If, we pay back, then we create a Credit memo for return, which called "Credit for Return" and in standard SAP represented by Billing Type (RE).

In standard system, this "Credit for Return(RE)" is ALWAYS created with reference to the "Return Order(RE)".

Even though, physical delivery takes place in return process, still the "Credit for return(RE)" is created with reference to the "Return order(RE)".

If, client requires it to be created from Return delivery then you need to establish necessary settings in customisation which has already beed discussed in this forum several times.

Hope, it is clear.

Regards

[koushik_9836 · Accepted solution]

Could you please elaborate the replacement scenario