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