Monday, August 3, 2015

A Little Bit of Imagination!

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!

About Master Builder Notes

Master Builder Notes is maintained by Walt and Gerry Mathieson, Sage Master Builder Certified Consultants. We have provided implementation, training and report writing services and general business advise to users of Sage Master Builder since 2000 and have over 30 years of real-world accounting and business management experience. While based in AZ, we use Internet tools and telecommunications to work with clients across the country. If you have Internet access, we are instantly available to assist you! To reach us, email to info@mathiesonconsulting.com or info@spcconsultants.biz.