Recently, a client asked what they could do to solve a
longstanding problem for their business.
They are an equipment sales and service organization, and have a high
volume of materials purchases and returns.
Management was concerned that they either were not returning defective
and or warrantied materials, or the suppliers were not giving them credit for
their returns.
At first glance, there is no module or menu item labeled “Materials
Returns” in Sage 100 Contractor, so the easy answer was “sorry, there’s nothing
to help you in the program”. But let’s look a little closer at the problem. In
reviewing the request with the client, we found that they needed to be able to
keep records of what items were returned to their vendor, how much of a refund
or credit they expected to receive as a result of the return, and whether or
not they had actually received the credit from the vendor. With just a touch of
imagination, you might see that this problem is an exact opposite of how purchase
orders work. Purchase orders communicate to a vendor what you want to purchase,
how much you expect to pay for it, and whether or not you have entered an AP
invoice as a result of the purchase. A purchase
order record with negative quantities (a positive quantity is an item
purchased and to be paid for, a negative quantity is an item returned for a
credit) does just what an materials return record should.
To make this work effectively, we made a few changes in the
system To keep the materials returns records separate from the materials
purchases, we defined a purchase order type for returns, repurposed a user-defined
field for the vendor’s RMA or returned material authorization number, and
repurposed the purchase order grid line user-defined field for the reason the
item was returned. We created a specific
report and report form, which we called a Materials Return Transmittal to
effectively document the return to the vendor, specify what was expected of the
vendor, and the amount that was expected to be received as a credit from the
vendor. When the credit memo is received
from the vendor, the entry in accounts payable invoices should reference the
order number so that the open record could be marked as closed. A Materials
Returns List report was also created that shows the current status of materials
returns.
This is just a brief synopsis of what can be done with a
little imagination. If you want more
information about how to implement a materials returns tracking system, give us a call or send us an email!