Return order (RE) Business process information

[former_member182378]

Experts,

I want to understand RETURNS process, could you please tell me

1- the business process steps, i.e. real-time process (sequence of events, who did what etc.)

2- the billing block & who gives authorization for release of billing block

3- RE sales doc type was made with reference (or without reference), configurations

4- Warehouse locations were these goods were putaway

5- partner functions (SHTo)?

6- what kind of outputs

7-G/L account postings?

8- what issues, challenges you faced during implementation of RE process

9- what tests done?

10- any other advice, I shall be implementing it in my client site (after a month)

Please focus on realtime experience & not much of theoritical information.

Thank you,

Text Removed

Edited by: Lakshmipathi on Jul 11, 2011 3:21 PM Please avoid adding comments like this

[Lakshmipathi · Accepted solution]

In nutshell, return process would be followed as under:-

1) Marketing will create a return order referencing the parent billing document

2) Return delivery will be created either by the warehouse person (if original delivery was created by warehouse) or the marketing team itself, as they are the one who have to decide what should be the return quantity

3) Once PGR is posted, the corresponding quantity would be posted to quality for their inspection. Quality will decide whether the rejected stocks can be reused or should be scrapped

4) Whatever be the reason given by quality, credit note will be generated to customer which would be done either my Marketing or Finance

There is no fixed thumb rule from functional side. This will vary from client to client.

From SAP point of view, you need to take care of movement types assigned to your schedule line and copy controls.

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

Hi Eduardo, Lakshmipathi, Aadesh, Ram,

Thank you for your posts!

I agree that RE business processes vary. I have a rough idea about my clients business requirements w.r.t RE.

Below are some questions, would you please answer them -

a. Partner Function, Ship To party -

In RE the delivery address is not the SH To; which has been used for OR type orders. The delivery address would be the company warehouse. Is this to be changed - i.e. SH To partner - while creating RE?

When RE is made with reference to OR or F2, SH To party is taken from these refered documents. How to "solve" this?

b. Delivering plant, Shipping point and Route -

As mentioned in a. these are also not same as OR.

What steps are needed to be configured, for the same?

c. Approval process -

The manager that shall give approval wants to send an email with "an approval #", then the order entry staff can remove the billing block. What would be the way to do this?

d. Refer OR & refer F2 -

I see that when you create RE with OR, you can change the open quantity. But that is not the case in F2.

Am I correct? why is this so?

Many thanks!

[Lakshmipathi · Accepted solution]

1) Partner Functions will not get changed when you create a return sale order. It will copied from the parent billing document.

2) Delivering Plant and Shipping Point can be the same. If transportation is configured, then you can have a new route for returns

3) Search on text "Status Profiles" through which, this can be achieved

4) You should always create a return order ONLY with reference to billing document and not sale order as quantity will mismatch

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

1.1 - "4) You should always create a return order ONLY with reference to billing document and not sale order as quantity will mismatch"

Please explain "quantity will mismatch"

1.2 - E.g. sales order created, dlv sent to customer; customer wants to send material back (RE), in that case there is no bill to be referenced. What is to be done here?

1. 3 - Should bill be created for sales order & credit memo be created for RE? Is that the way to proceed?

2.1 - creating RE with reference to sales order - If sales order contains 3EA; RE ref. to that sales order can have 5EA.

same with ref to billing doc.

Could you explain why is this so designed in SAP.

Many thanks, in advance!

[Lakshmipathi · Accepted solution]

1.1 You create a sale order for 100 nos. Partial Delivery made for 60 nos. for which, invoice has also been generated. Now the customer rejects the entire lot which means 60 nos. Here in this case, tell me which document you should refer ?? If you refer the sale order, the document flow would be wrong. You are suppose to give credit only for 60 nos., and not for 100 nos. Hence, it will be better if you always refer the parent billing document.

1.2 The above holds good

1.3 When you say bill, it implies to normal billing document as well as a credit memo or a debit memo. But ideally, just to understand the functionality clearly, we mention credit note or debit note.

2.1 Not clear with your explanation. Better once again go through 1.1 explained above.

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

Hi Lakshmipathi,

1.1 Cleared!

1.2 You create a sale order for 100 nos. Delivery made for 100 nos. for which, invoice NOT yet generated.

Now the customer rejects the entire lot which means 100 nos. In this case, reference document can NOT be bill (F2) as it is not yet created.

What shall be the next steps? w.r.t reference document for RE creation

1.3 What shall be the next steps, continuing 1.2?

RE created with reference to sales order, Delivery LR accepted, Credit note RE created

& side-by-side, bill F2 created and billed to customer. Or someother way?

How is it done in business?

2.1 - I have done the below test -

created sales order (OR) for 3EA. Then created RE with reference to this sales order; changed quantity of RE from 3EA to 5EA, got warning message but can still create RE with 5EA. Why does the system allow that?

created sales order for 3EA, did delivery for 3EA, did bill (F2) for 3EA. Created RE with reference to F2; changed quantity in RE from 3EA to 5EA possible. Why does the system allow that?

Thank you for your help!

Regards,

Typewriter

[Lakshmipathi · Accepted solution]

1.2 When you have despatched to customer what was the reason not to debit the customer ?? This approach is totally wrong. You have to create a billing document

1.3 As stated above, you have to create a billing document and subsequently, create a RE document referencing this billing document

2.1 Go to OVAH and change message class V4 no 229 to E will work. With this settings, system will not allow to increase the quantity in return order over and above the despatched quantity

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

For -

"1.2 When you have despatched to customer what was the reason not to debit the customer ?? This approach is totally wrong. You have to create a billing document"

The company creates does billing at the month end. Thus the above situation.

But your advice is go ahead with creation of bill F2 and also creation of credit note RE. In other words complete both processes.

Clear! Thank you!

[Lakshmipathi · Accepted solution]

If your query is answered, close the thread with "Answered"

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

Hi Lakshimipathi,

I am waiting if some other experts might want to share some RE real-time experience.

Regards,

Typewriter

[Lakshmipathi · Accepted solution]

I am waiting

I am really surprised to see this as this topic has already been discussed in threadbare.

thanks

G. Lakshmipathi

[former_member182378 · Accepted solution]

As you rightly said that there are many different ways return processes are conducted across industries. I am hopeful of getting more information that would be useful and not yet discussed in the thread.

What is the gain of marking this query as answered say e.g. today over after a couple of days?

If I am missing something, please advise. (pertaining to rules of the forum or of any other topic)

Regards,

[former_member182378]

Thank you!

[Former Member]

hI,

according to my experience the major issue would be during PGR(post goods receipt), please make sure whether the client wants to enter the goods in a different storage location.Also whether he would like to classify the return goods as restricted stock, or he wants to treat it on FIFO basis.

Regards

Aadesh Kamat

Edited by: aadesh123 on Jul 11, 2011 11:32 AM

[former_member182378]

If you have worked with RE process in real time, please describe the "work flow" & also answer all the questions.

many thanks!

I did not get your point about "Client wants to treat it on FIFO basis". Explain more.

Edited by: Typewriter on Jul 11, 2011 11:36 AM

[Former Member]

I think this many questions to answer will be difficult. hence next time try to post particular question only. try to search the fourm you may get lot of answers.

1. Return process is a common process in SD. Customer may be not satified with the deliveried goods or the deliverable is not what customer exactly want. In these case, customer want to initiate the return process.

SAP has provided standard steps for return process like RE order > return delivery LR > billing type RE.

2. If you want billing blck you can assign same thing in sales doument type RE, so when ever user creates RE order, it will put billing block at sales order header. You can assign aurthoruization approval for blling block release of user line manager.

3. You can create with refernce to F2 billing or you can create without refernce also, here when you create with refernce, system copies all information from F2 billing document like customer/material/price ect.

4. Systsem will determine storgae location with MARA/MALA rule.

5. Patner function will be same of F2 or customer, but goods recived inwards will happen with movemnt type

6. You can have return order output and credit for retunrs invoice output

7. G/L will be on your revence account determination like customer account will be credit and client accont debits

8. you need to test all above steps

[former_member182378]

Ram,

Thank you for your post!

I am more interested to know "realtime" scenarios & issues faces during those scenarios.

2. "You can assign aurthoruization approval for blling block release of user line manager." - Can you elaborate on process of getting approval and any special steps done during removing the billing block?

5. Patner function will be same of F2 or customer, but goods recived inwards will happen with movemnt type

In OR, my SHTo is my "delivery address" but here SHTo is my warehouse; how and what changes do I have to make in RE (in Sh To and in Tab Parnter in VA01)

[eduardo_hinojosa]

Hi

See the [print file for SD|http://help.sap.com/printdocu/core/Print46c/en/data/pdf/SDSLS/SDSLS.pdf], pages 183-186.

I hope this helps you

Regards

Eduardo

[Former Member]

Hi,

By FIFO i mean, say you are supplying 100 items out of which the client only accepts 70 and returns 30. So the RE order will be created for 30 items. Now during PGR where do you want to show the stock and if there is material tagging or serial numbering do you you want to give these returned items priority during your next delivery.

Second challenge would be the pricing and the taxation.The pricing to be done for the return goods and how the taxation will be adjusted for the returned items.

Regards

Aadesh Kamat

[former_member182378]

Your comments -

"Second challenge would be the pricing and the taxation.The pricing to be done for the return goods and how the taxation will be adjusted for the returned items."

Could you please share information about these 2 points (pricing and taxation for RE) based on your real-time experience?

Say manufacturing company priced 1EA for 100Euros to their customer. When certain material is returned, then have you experience change in the price w.r.t. creating a credit memo?

[Former Member]

Hi,

As stated earlier the process varies from client to client.

Whether you want to have a different pricing procedure for returns order or if you are creating with reference to the billing document, then the pricing will be for 100 items and not for 30 items, in that case you will have to change thr pricing procedure.

Regarding taxation make sure which regiters will be updated, i guess it should be RG23A.

Regards

Aadesh Kamat