Inventory Returns

This help topic is applicable to the following TireMaster applications:

TireMaster Point of Sale

TireMaster Plus

TireMaster Corporate

 

When you need to send items back to a vendor, perform an inventory return. The inventory return process includes slight differences depending on whether items being returned are inventoriable or noninventoriable. You also have the option to return items and receive new items at the same time.

Returning items to a vendor includes the following tasks.

Create a negative receiving document, which removes the item from the inventory and records the cost and federal excise tax of the returned item. When you create the negative receiving document, you can use the item’s system-generated next cost and federal excise tax, or you can use the cost and FET or your choice.

Note: If you change the cost, FET, or both, the total of the inventory subledgers might not match the balance of the general ledger’s inventory account. In such instances, you need to create adjusting entries.

Create a negative vendor charge (VC), which records the credit or reimbursement that will reduce the vendor’s balance. TireMaster can create the charge automatically or you can create it manually.

Note: When the negative vendor charge is created automatically, it posts to the vendor’s subledger and includes a reference number such as VID:1-13.

Once the negative vendor charge is created, either automatically or manually, you need to apply it to one or more invoices in the vendor’s subledger. Before you can return items to a vendor, you need to define an inventory clearing account.

To perform inventory returns, you need to include an inventory clearing account in your chart of accounts. This account can be an existing liability account (such as Accounts Payable – Expected Credits), or you can create an account solely for the purpose of tracking inventory returns. Once you decide which account to use, you need to define the inventory clearing account.

Note: Defining the inventory clearing account is required to successfully validate the database.

To define the inventory clearing account

1. Select Setup > System Controls. The System Controls screen opens.
2. Click the General Ledger tab.
3. Select Inventory Clearing Acct and press Enter.
4. Select the account you want to use for tracking inventory returns from the chart of accounts and click OK.
5. Close the System Controls screen.

When you return an inventoriable item to a vendor, you can post one of the following to the general ledger:

The item’s next cost and next FET

The cost and FET of your choice

Tip: You can return both inventoriable and noninventoriable items on the same receiving document. For more information, see Return Noninventoriable Items.

To an return inventoriable item

1. Create a receiving document for the vendor who sold you the item. For more information, see Create a Receiving Document.
2. Enter a reference number for the return if needed.
3. Click Add and look up the item you want to return or scan the item’s bar code. For more information, see Inventory Searches or Enter Bar Codes on Purchase Orders and Receiving Documents .
4. Type the returned item’s quantity as a negative number and press Enter. The Price and FETax fields turn green.
5. Define how to post the cost and FET of the returned item to the general ledger:

To post the next cost and next FET (if any) make sure the Price and FETax fields are green and the amount in both is $0.00.

Note: Because an item’s next cost and next FET are generated by TireMaster, posting these amounts reduces the potential for discrepancies between the inventory subledgers and the inventory accounts in the general ledger.

To post the cost and FET of your choice, change the values in the Price and FETax fields. Those fields turn pink to indicate you’re no longer performing a standard return.

Note: If you override the cost, federal excise tax, or both, you might need to make adjusting journal entries to ensure that the total of the inventory subledger accounts matches the value of the inventory accounts in the general ledger..
6. To return additional items, repeat steps 3 through 5.
7. Click Receive. TireMaster prompts you to price the RD.
8. Click Yes. The Vendor Invoice screen opens.
9. Click Complete. The Create Correct VC screen opens.
Note: Depending on the system control settings, you might be required to add a reference number if you haven’t already.
10. Define whether the vendor charge will be a system-generated amount or an amount of your choice:

To base the vendor charge on the next cost and next FET calculated by TireMaster, select Create VC with system generated amount.

Note: The vendor charge number and amount listed are subject to change if other transactions involving returned items are completed before you finish the inventory return.

To use the amount of your choice, select Create VC with User defined amount and type the charge amount.

11. Select a method for processing the vendor charge:

To automatically create the vendor charge and post it to the vendor’s subledger, select Create and process a negative Vendor Charge when the VID is processed.

To create the vendor charge yourself, select Create a negative Vendor Charge manually. For more information, see Enter a Vendor Charge.

To automatically create the charge and add it to an open batch of charges for the vendor, select Create a negative Vendor Charge as part of an open batch. When the AP Batch Charge screen appears, choose a batch or create a new batch.

In TireMaster Corporate, this option is not available when a user at the corporate site is pricing a receiving document for a store.
12. Click OK. The Report Window opens and displays the Vendor Invoice Document.
Note: If you click Cancel instead, you’ll need to create the negative vendor charge manually.
13. Print the VID and close the Report Window.
Note: On this copy of the VID, the returned item’s cost is $0.00. Once the transaction is completed, reprinted copies of the VID will display the cost that posted to the general ledger.

After the negative charge is created, apply it to the vendor’s subledger to reduce the vendor’s balance. For more information, see Apply Payments and Credits to Vendor Balances.

When you return a noninventoriable item to a vendor, you need to enter your cost or an estimated cost for the item on the negative receiving document.

Note: If the item being sent back to a vendor is assigned the option cost costing method, performing the following steps might not be necessary because the negative receiving document and possibly a negative charge might already exist. This is always true for tracked option cost items that customers purchase and then return, because creating the negative receiving document during the return is required. It can also occur when a customer purchases and returns an untracked option cost item. In this scenario, you have the option to create the negative receiving document and negative vendor charge during the return. For more information, see Return Tracked Option Cost Items and Return Untracked Option Cost Items.
Tip: You can return inventoriable items on the same receiving document as noninventoriable items. For more information, see Return Inventoriable Items.

To return noninventoriable items

1. Start a receiving document for the vendor who sold you the item. For more information, see Create a Receiving Document.
2. Enter a reference number for the return, if needed.
3. Click Add and look up the item you want to return or scan the item’s bar code. For more information, see Inventory Searches or Enter Bar Codes on Purchase Orders and Receiving Documents .
4. Change the item’s description if needed.
5. Type the returned item’s quantity as a negative number.
6. Enter the item’s cost using one of the following methods:

For relief percent items, type the estimated cost (Parts Price x Relief Percent) in the Price field. For example, If an item’s parts price is $50 and its relief percent is 10%, type $5 in the Price field.

For option cost and expense method items, type your cost in the Price field.

Note: The cost or estimated cost of a returned item is not included in the receiving document’s total.
7. To return additional items, repeat steps 3 through 6.
8. Click Receive. TireMaster prompts you to price the RD.
Note: Depending on how the system controls are set, you might be required to add a reference number if you haven’t already.
9. Click Yes. The Vendor Invoice screen appears.
10. Click Complete. The Create Correcting VC screen appears.
Note: Depending on how the system controls are set, you might be required to add a reference number if you haven’t already.
11. Define whether the vendor charge will be a system-generated amount or an amount of your choice:

For a vendor charge based on the next cost and next FET calculated by TireMaster, select Create VC with system generated amount.

Note: The vendor charge number and amount listed are subject to change if other transactions involving returned items are completed before you finish the inventory return.

For a vendor charge amount of your choice, select Create VC with User defined amount and type the charge amount.

12. Select a method for processing the vendor charge:

To automatically create the vendor charge and post it to the vendor’s subledger, select Create and process a negative Vendor Charge when the VID is processed.

To create the vendor charge yourself, select Create a negative Vendor Charge manually. For more information, see Enter a Vendor Charge.

To automatically create the charge and put it in an open batch of charges for the vendor, select Create a negative Vendor Charge as part of an open batch. When the AP Batch Charge screen appears, choose a batch or create a new batch.

In TireMaster Corporate, this option is not available when a user at the corporate site is pricing a receiving document for a store.
13. Click OK. The Report Window opens and displays the Vendor Invoice Document.
Note: If you click Cancel instead, you’ll need to create the negative vendor charge manually.
14. Print the VID and close the Report Window.

Once the negative charge is created, apply it to the vendor’s subledger to reduce the vendor’s balance. For more information, see Apply Payments and Credits to Vendor Balances.

You can perform an inventory return when you're receiving items from a vendor. The receiving document created in this scenario, includes items with both negative and positive quantities.

To combine inventory returns and receivings

1. Start a receiving document for the vendor. For more information, see Create a Receiving Document.
2. Type a reference number for the receiving.
3. Add each item you’re receiving from the vendor, along with its quantity, price (your cost), and FET.
4. Add each item you want to return to the vendor and its quantity entered as a negative number. Then enter the price (your cost) and FET using one of the following methods:

For an inventoriable item, leave $0.00 in the Price and FETax fields or change the cost and federal excise tax to amounts of your choice. For more information, see Return Inventoriable Items.

For noninventoriable items, type your cost (expense or option cost method) or the estimated cost (relief percent method) in the Price field. For more information, see Return Noninventoriable Items.

5. Click Receive. TireMaster prompts you to price the RD.
Note: Depending on how the system controls are set, you might be required to add a reference number if you haven’t already.
6. Click Yes. The Vendor Invoice screen appears.
7. Click Complete.
8. The Combine PO & VC Documents screen appears. It lists the following:

The total of the newly received items

The total cost of the returned items

The difference between those two amounts

Note: The amounts are subject to change if other transactions involving returned items are completed before you finish the combined receiving and return.
9. Define whether you want to combine the payable entries:

To post the listed amounts to the GL and skip creating a vendor charge for the cost of the returned items, click Yes. Then print the vendor invoice document. The receiving is completed and you can disregard steps 10 through 12.

Note: When payables are combined in this manner, no inventory return (IR) entry is created in the general ledger.

To create a vendor charge for the returned items instead, click No. The Create Correcting VC screen appears.

10. Define whether the vendor charge will be a system-generated amount or an amount of your choice:

For a vendor charge based on the next cost and next FET of the returned items, select Create VC with system generated amount.

Note: The vendor charge number and amount listed are subject to change if other transactions involving returned items are completed before you finish the inventory return.

For a vendor charge amount of your choice, select Create VC with User defined amount and type the charge amount.

11. Select a method for processing the vendor charge:

To automatically create the vendor charge and post it to the vendor’s subledger, select Create and process a negative Vendor Charge when the VID is processed.

To create the vendor charge yourself, select Create a negative Vendor Charge manually. For more information, see Enter a Vendor Charge.

To have TireMaster automatically create the charge and add it to an open batch of charges for the vendor, select Create a negative Vendor Charge as part of an open batch. When the AP Batch Charge screen appears, choose a batch or create a new batch.

In TireMaster Corporate, this option is not available when a user at the corporate site is pricing a receiving document for a store.
12. Click OK. The Report Window opens and displays the Vendor Invoice document.
Note: If you clicked Cancel instead, you’ll need to create the negative vendor charge manually.
13. Print the VID and close the Report Window.

After the negative charge is created, apply it to the vendor’s subledger to reduce the vendor’s balance. For more information, see Apply Payments and Credits to Vendor Balances.