Purchase Returns & Debit Notes

The Purchase Returns & Debit Notes module handles returning damaged, defective, or over-shipped goods to vendors (Return to Vendor - RTV), generating return documentation, emailing vendors, and recovering financial value via Debit Notes.

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Return to Vendor Lifecycle & Business Logic

stateDiagram-v2
    [*] --> Draft : Create RTV Request
    Draft --> Confirmed : Vendor Authorizes Return
    Confirmed --> Dispatched : Ship Goods Back (Perpetual Inventory Decrement)
    Dispatched --> Completed : Post Debit Note & Allocate to AP
    Draft --> Cancelled : Cancel

1. Purchase Order State Reversion Trigger

When an outbound return shipment is marked Dispatched:

• The system deducts the returned quantity from the PO’s cumulative Quantity Received.
• If net received quantity drops below the ordered quantity, the rules engine automatically executes auto-revert-to-partially-received-on-return, reopening the PO to Partially Received so replacement items can be received at the dock.

2. General Ledger Postings for Debit Notes

Posting a Debit Note reduces the Accounts Payable liability owed to the vendor:

Debit:  Accounts Payable Control Account    (Reduces total vendor liability)
Credit: Inventory Asset / Returns Clearing  (Decrements inventory asset balance)
Credit: Input Tax / GST Recoverable         (Reverses claimed input tax)

3. Allocation Against Open Supplier Invoices

Debit notes can be matched directly against outstanding supplier bills:

Supplier Bill Outstanding = Bill Gross Total - Allocated Payments - Allocated Debit Notes
Debit Note Unallocated Balance = Debit Note Gross Total - Sum(Allocated Invoice Amounts)

• No Secondary GL Entry: Allocation is an operational subledger action that decrements open balances on both documents simultaneously.
• Cash Payout: If the vendor remits a bank refund rather than offsetting future bills, a supplier_refund payment entry debits the Bank Account and credits Accounts Payable.

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Step-by-Step Workflows

1. Returning Goods to a Supplier

1. Go to Purchasing → Purchase Returns (/purchase-orders/returns).
2. Click New Purchase Return (/purchase-orders/returns/new) and select the originating Purchase Order.
3. Choose the items, return quantities, origin storage/quarantine bins, and select a Reason Code.
4. Click Confirm Return.
5. Click Email Return Slip to send the return docket to the supplier’s RMA desk.
6. Warehouse staff pack and dispatch the items via Inventory → Shipping → Supplier Returns (/shipments/returns).
7. When the vendor authorizes credit, open Purchasing → Debit Notes (/purchase-debit-notes), click Post Debit Note, and allocate the balance to open bills.

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Field Reference

Field	Description
Return Number (RTV)	Unique return authorization reference (e.g. RTV-2026-00012).
Purchase Order	Original PO for relational details like vendor and price history.
Debit Note Number	Legal debit adjustment identifier (e.g. DBN-2026-00008).
Debit Amount	Total gross deducted balance including tax.
Unallocated Balance	Remaining credit remaining on the vendor’s AP ledger.
Reason Code	Classification for the return (Damaged, Over-shipped, Defective, Wrong Item).
Status	Stage (Draft, Confirmed, Dispatched, Completed).