Return & Sales of Damaged Goods

[Former Member]

We issue 4 articles to a project. The project is for a year. At the end of the project they used 3 articles. 4th article they want to return back to store. While checking the stock the stores found that the article is damaged.

They return the stock to the stores and maintain it as damaged stock type. Example the cost of material is 500 USD

They have a committee to check for the damaged article and they come to a conclusion to sell it for 200 USD.

If they do normal sales, the system will show below cost. The requirement is to make bring down the cost of the article for example 150 USD, to show profit of 50 USD.

Is it possible to reduce the cost of one article ?

What other solution is available to solve the issue ?

[eduardo_hinojosa · Accepted solution]

Hi

I'd suggest you to do a mov 309 from normal good to a damage good, but the cost will be the same (500 USD). In my opinion you did purchases by 500 USD, so the cost will be 500 USD. In some moment you have to recognize the loss.

I hope this helps you

Regards

Eduardo

[Former Member]

Hi,

Incase you want to reduce the cost you will have to account for that loss some where in your accounts. You need to ask your finance guys how they want to handle it.

My solution would be to use a manual override at POS with access to only store manager, in my experience the numbers are too low to design a SAP solution.

Cheers

[Manish_Bhandari]

Dear Jijo,

This is what i can propose given the situation you are in :

Cost of Material Procured : USD 500

Saleable Value as of now : USD 200

The way you can handle is like this :

1. Do a material revaluation using MR21 and reduce the cost to USD 150 - However please note that in this case the system will hit a P&L account and losses of USD 350 ( 500 - 150) will be booked

2. Now you can do a normal sale @ USD 200. In this case you will make a profit of USD 50

3. Overall the organisation losses USD 300. Which would have been the case if you would have made a direct sale @ USD 200.

Hence to conclude the only way out could be to return the article back to the Vendor ( against the PO it was procured) . The do a good receipt at a lower value . Though this is technically possible but i am sure the finance guys will not agree to it, as it is manipulating the books ( Unless the vendor agrees to receive USD 200 for the product)

Hope this helps

regards

Manish

[Former Member]

agree for reducing the cost by MR21. But can i reduce for 1 qty in a site which has 10 qty for example ?

[Former Member]

MR21 is not the best way to handle this. MR21 changes the moving average cost price of the article and hence it should not be touched else you can have wrong reporting.

I would suggest to rather raise a return order and book the stock in to the DC or plant and then raise a Sales order with any of the discount type, reduce the price.