Returns to Supplier/Vendor

1. Set vendors up in the Customer Master (SU13).
   1. You can separate these with C.O.T., Territory or Sales Rep.
      
   2. Set these 'customers' as a separate Customer Type.

2. Create a new TAT code in program IN02 eg. RTV.
   1. Set the TAT code flags to update only sales dollars and inventory.
      
   2. Set the cost of sales GL account to an over-ride - some sort of 'Vendor Return Clearing account' in the liabilities section of the chart of accounts – near the accounts payable and accruals section.

3. Create the records in program CC00, folder IN2 to handle the appropriate sales office(s) / warehouse(s), inventory GL codes and the specified customer type (used in points 1 and 2 above).
   1. Use the Vendor Returns Clearing account as the GL sales account in CC00 and as the cost of sales over-ride account in IN02.

4. Create a sales order in program OE30, create a picking slip, ship it and invoice it as per normal.

5. When the credit is received from the vendor, process it through accounts payable (AP30), distributing the credit side of the entry to the clearing account.

6. In program AR30, make an adjustment to match the outstanding A/R item to the AP clearing account, thereby wiping out the A/R and the AP clearing balances. This will leave a debit in your accounts payable (representing the credit that the vendor issued) and a credit to inventory (representing the inventory returned) as well as entries in the vendor sales and vendor cost of sales accounts.

Note: If there are any discrepancies between the inventory value and the unit 'prices' on the sales order, the vendor sales and vendor cost of sales accounts will be unequal. If there are discrepancies between the sales order and the resulting credit received from the vendor, there will be remaining balances in the clearing account. These will need to be cleared out via journal entry.