Supplier Credit


#1

What’s the best process for entering in returns to our supplier? We deduct damaged items from our payment.


#2

Hi Shelly,

If you are not absorbing the cost, then its best to edit the Purchase Order before you Receive the goods. If you are absorbing the cost, then its best to create a Stock Adjustment with the cost incurred and adjust the stock down for the damaged goods.


#3

Can you explain in a bit more detail how you would do this after the PO has been received?

For example, suppose I send out a PO for 100 widgets at $50 each, for a total of $5,000. I receive the goods and add in the 3rd party shipping cost of $500 for shipping, for total landed cost of $5,500 or $55 per widget.

I then get contacted by my supplier who requests that I send back 10 widgets (let’s say they are just asking a favor to help cover an under-stock situation). At this point assume I have 80 widgets left with landed costs of $4,400.

What would be the best way to execute this stock return? I know that I could simply invoice them for the 10 widgets at my landed cost, but that would produce a gross profit of 0% and thus distort my sales accounting. I would really just like to have the $550 of landed cost removed from my inventory and COGS such that it is accounted exactly the same as if I had only ordered 90 widgets on the original PO.

Thanks