Customer Returns - Inventory Valuation

[Former Member]

Hi Folks,

I have a business requirement where the inbound delivery should be received at the original material price instead of the current MAP. As of now the system is receiving the item back at the current MAP price. For example:

Goods Issue:

Price = $10, Qty = 5

CR Inventory 50 DR COGS 50

Billing:

CR Customer 50 DR Revenue 50

The MAP changes from $10 to $15 and then the customer returns the goods. The system is currently doing the following:

Credit Memo (Cancel Billing)

DR Customer 50 CR Revenue 50

Goods Return (receive back in inventory)

DR Inventory 75 (New MAP) CR COGS 75

Is there any way to match the return document to the original PGI? This doesnt look like an unusual requirement but our SD consultant says there is no way to do this. is there any way around this?

Thanks

[Former Member]

Hi

As far as my understanding if you follow proper return process it should be match with old inventory value

Sales order >> Delivery (Say here COGS is $ 50) >> Invoice value is 50

Now say your material price is changed and it becomes $ 60

Then customer complaint and send back return

Create return sales order wrt old invoice >> Return delivery (Here COGS is $50 not new one 60) >> credit for return value is 50

Now in our curent scenario we are following this as our valuation is based on batch

Kapil

[Former Member]

Kapildev - the current postings are not happening as you are suggesting. In fact thats what we want. Is this a config issue? If so, could you please suggest what needs to be changed in the config?

[Former Member]

Hi,

First of all what is the MAP here.

Let me suggest a few points here:

1) Inventory Valuation hitting COGS depends on VPRS(Cost) maintained in the material master and not the price. It depends, whether the price is maintained as Stadard or Moving average which might affect your calculations.

2) While creating Credit memo request and Credit memo with reference to the original Billing document, to maintain the price constant and not redetermined pricing type has to be maintained as D (Copy pricing elements unchanged). By doing this system will copy the same price to the credit memo at which the material was sold.

Hope this helps.

Regards,

Amit

Edited by: Amit Iyer on Jun 8, 2011 11:53 AM

[Former Member]

Hi,

The price is MAP. The issue is that the PGR is posting at the new MAP instead of the original MAP (at the time of PGI). The credit memo is not a problem at all - it is getting posted at the correct price and reversing out the invoice. The issue is with the inventory valuation at the time of the PGR.

Thanks