Returns
Returns processing in SD handles goods coming back from customers, return orders, return deliveries, and credit memos, so the reverse flow is managed and accounted for correctly. It is the mirror image of the sales process.
Returns affect inventory (stock coming back), finance (credits reducing revenue/AR), and often quality (inspecting returned goods).
- A return typically starts with a returns order (a special order type), followed by a return delivery (goods received back into…
- Returns order type (e.g. RE).
- Return delivery & goods receipt back into stock.
- Watch out: Returned stock not received correctly, inventory wrong.
The returns flow
A return typically starts with a returns order (a special order type), followed by a return delivery (goods received back into stock, often into a returns/blocked stock) and a credit memo (refunding the customer, posting to FI-AR). Each step reverses the corresponding outbound step.
Key elements
- Returns order type (e.g. RE).
- Return delivery & goods receipt back into stock.
- Credit memo to refund the customer.
- Inspection/disposition of returned goods (with QM).
Why it matters
Returns affect inventory (stock coming back), finance (credits reducing revenue/AR), and often quality (inspecting returned goods). Handling them cleanly ensures accurate stock and financials and good customer experience. Advanced returns management provides richer control for complex return scenarios.
Common pitfalls
- Returned stock not received correctly, inventory wrong.
- Credit memo not linked to the return, accounting off.
- No inspection/disposition of returned goods.