Vendor Returns and Credits

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When to Use Vendor Returns

Create or manage a vendor return when:

• A customer RMA item was inspected and should go back to the supplier.
• A warranty claim needs vendor tracking before credit or replacement is issued.
• A wrong item or defective item should leave sellable stock and be tracked until resolved.
• Purchasing needs a vendor RMA or RA number tied to the returned goods.
• Accounting needs a clear link between the returned item, expected credit, and final vendor credit.

Do not use vendor returns for ordinary customer refunds, order edits, or write-offs where no supplier follow-up is expected.

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Create a Vendor Return from a Customer RMA

The current operator path starts from the customer return detail.

1. Go to Returns and open the customer RMA.
2. Receive and inspect the returned item if it has arrived.
3. Set the line disposition to Vendor Return.
4. Confirm the quantity to send to the vendor.
5. Click Create Vendor Return.
6. Select the vendor.
7. Enter the vendor RMA or RA number if the supplier gave you one.
8. Choose the return type: Warranty, Defective, or Wrong Item.
9. Add notes for purchasing, warehouse, or AP review.
10. Click Create Vendor Return.

After creation, use View Vendor Return from the RMA or open Vendor Returns from the navigation to manage the supplier-side workflow.

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Manage Vendor Returns

Go to Vendor Returns to review open supplier returns. The workspace includes status cards, search, a list of vendor return records, and a detail panel for the selected return. Use this page to:

• Search by vendor return number, vendor, source RMA, or tracking context.
• Filter by status.
• Review vendor, source RMA, items, quantity, unit cost, disposition, and credit amount.
• Record shipment to the vendor.
• Record a vendor credit or receive replacement inventory.
• Close, cancel, or delete eligible records.

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Status Flow

• Pending: the vendor return exists, but shipment has not been recorded.
• Shipped to Vendor: tracking and carrier details were recorded. Inventory can be deducted when a ship-from holding location is selected.
• Received by Vendor: the vendor has acknowledged receipt when that state is captured.
• Credit Issued: the vendor issued a credit and Arcus recorded the credit outcome.
• Replacement Received: replacement stock was received into inventory.
• Closed: no more action is expected.
• Cancelled: the return was stopped before a vendor credit or replacement was recorded.
• Deleted: a pending draft was soft-deleted and removed from active lists.

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Ship Items to the Vendor

1. Open Vendor Returns.
2. Select a return with Pending status.
3. Click Ship to Vendor.
4. Enter the tracking number if available.
5. Select the carrier.
6. Select Ship From Location only when Arcus should deduct inventory from that holding location.
7. Click Mark Shipped.

If no ship-from location is selected, Arcus records the shipment status and tracking information without deducting stock from a location.

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Record the Vendor Outcome

After the return is shipped or received by the vendor, record the supplier’s resolution.

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Vendor Issues a Credit

1. Open the shipped vendor return.
2. Click Record Credit.
3. Enter the credit amount from the supplier.
4. Click Record Credit.
5. Review the status, item credit amount, and timeline.

The return moves to Credit Issued. AP can use the recorded amount and source return when issuing, matching, or reviewing the supplier credit.

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Vendor Sends Replacement Inventory

1. Open the shipped vendor return.
2. Click Receive Replacement.
3. Select the receiving location.
4. Click Receive into Inventory.
5. Confirm the replacement quantity appears in inventory.

The return moves to Replacement Received.

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Close the Return

Close the return after the vendor has issued the credit or replacement and your team has no remaining follow-up.

1. Open a return in Credit Issued or Replacement Received.
2. Click Close.
3. Confirm the timeline shows the close event.

Closed returns remain available in history, but active action buttons are removed.

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Accounting and Inventory Outcomes

Vendor returns can affect inventory, vendor returns receivable, accounts payable, and vendor credits.

• Ship to Vendor with inventory deduction: decreases inventory and posts the outbound vendor return value to vendor returns receivable.
• Record Credit: records the supplier credit outcome and clears vendor returns receivable against AP for the credit amount.
• Receive Replacement: increases inventory at the selected receiving location and clears vendor returns receivable for the replacement value.
• Cancel from Pending: has no GL effect because no shipment accounting was posted.
• Cancel from Shipped to Vendor: reverses the shipment accounting so inventory and vendor returns receivable are restored.
• Delete from Pending: soft-deletes the draft and has no GL effect.

AP applies open vendor credits during Accounting > Pay Bills. Credits only apply to bills for the matching vendor and reduce the cash portion of the vendor payment.

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Common Scenarios

• Defective customer return: receive the customer RMA, disposition the item as Vendor Return, ship it to the vendor, record credit or replacement, then close.
• Wrong SKU from supplier: create the vendor return from the related RMA when the wrong item came through customer returns, then record replacement inventory when the supplier sends the correct item.
• Warranty review: create the return with return type Warranty, add the vendor RMA number, and leave it open until the vendor issues credit or replacement.
• Drop-ship vendor sent the wrong item: process the customer RMA first, then create the vendor return so the supplier follow-up stays linked to the customer return.
• AP needs the credit: record the supplier credit amount on the vendor return, then issue or review the corresponding credit in Accounting > Vendor Credits and apply it in Pay Bills.

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Common Blocks

• Create Vendor Return is missing on the RMA: at least one returned item must have the Vendor Return disposition and a quantity to send to the vendor.
• Vendor search does not find the supplier: confirm the supplier exists as an active vendor account.
• Ship to Vendor is unavailable: only pending vendor returns can be shipped.
• Record Credit is unavailable: ship the vendor return first.
• Receive Replacement is unavailable: ship the vendor return first.
• Replacement cannot be received: select a valid receiving location.
• Cancel is unavailable: only Pending and Shipped to Vendor returns can be cancelled. Returns with vendor credit, replacement, or closed status must follow the normal resolution path.
• Delete is unavailable: only pending draft vendor returns can be deleted.
• Credit does not appear in Pay Bills: confirm the vendor matches the bill vendor and the credit is open, unexpired, not voided, and has a remaining balance.
• Accounting amount looks wrong: compare the vendor return item unit cost, shipped quantity, vendor credit amount, and original PO or RMA context before applying the credit.

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