Restock Drop Ship Sales Returns using RMA

Problem/Business Requirement/Unique Question:

 

Is there a way to for an Item marked as Drop Ship to become part of my Inventory once a customer returns that Item?

 

 

Symptoms/Details of Business Requirement/Any Additional Information:

 

Customer receives a returned item from their customer that is marked for Drop Shipment however customer would like to stock the item as part of their Inventory and not return it to the Vendor.

 

Solution/Workaround/Gotcha/Recommendation Details:

 

·          On the Sales Order page click the Authorize Return button. When you are taken to the Return Authorization page you have the option to set it to either Pending Receipt or Pending Approval.

·          Per Help Guide the Drop Shipment Column will automatically be checked if you click the Authorize Return on the Sales Order page. Since you want the Drop Ship Item to be part of your Inventory then you must uncheck the Drop Shipment Column checkbox on the Line Item Transaction.

·          Then click the Receive button on the Return Authorization page. On the Return Authorization page you will notice that the Restock Column checkbox is mark checked. Hit Save button once you have verified that all the information on the Item Receipt page is correct.

·          If you go back to your Drop Ship Inventory Item Record > Inventory Tab > It will now show that the Quantity on Hand is increased by the number of quantity you have set as to be Restock on the Item Receipt page.

 

NOTE: Your customer might ask you why on the Item Receipt it does not generate a GL impact for receipt of the Item. They would be expecting a Debit to the Inventory Asset and a Credit to COGS Account. Inform customers that the reason why there is no GL impact generated is because since it marked as Drop Ship Item at the time that the item was sold to customer by creating a Sales Order and then generate a linked Purchase Order by clicking the Mark Shipped button it will take you to the Item Fulfillment page which if you recall upon saving does not generate any GL Impact at all.

 

Normally if the Item is not marked as a Drop Ship or is not set for Drop Shipment a GL impact is necessary when the Item is returned and restocked to reverse the GL impact created on the Item Fulfillment which is a Debit to COGS and a Credit to Inventory Asset. Since on the Item Fulfillment of a Drop Ship item has no GL impact then there isn't a need to create a reversing GL impact on the Item Receipt.

 

When selling a Drop Ship Item, COGS Account is triggered when the Purchase Order is billed. The GL impact on the Bill will show as a Debit to COGS Account and a Credit to Liability Account.

 

When a Restock Drop Ship item is sold to Customer the GL Impact would only show as Debit to Accounts Receivable and a Credit to Sales. The logic here is that the COGS Account was already triggered upon Billing of the Purchase Order at the instance that the Item was first sold to customer by creating a Sales Order and a Purchase Order was linked to it. Since this is the part where in you are just reselling the item that was returned by your customer then there is no need to post a debit to COGS Account. There is also no need to Credit an Inventory Asset Account which will be explained on the above mentioned note on Item Fulfillment.