Almost every business has to handle returned merchandise. In this article, learn the steps for processing a return order in D365. When a customer contacts a company to return a defective or unwanted product, the return process begins. A return order is created with lines that either reference the original invoice or do not. Additionally, for a physical return, the customer must return the products. For a ‘Credit only‘ return, the customer does not need to return the products. Lastly, some return orders will include a replacement order, whereas many will only be returns.
Microsoft Documentation
For detailed information on return orders, including the setup needed, please review this Microsoft Documentation.
Here is a chart from Microsoft that describes the initiation of a return order.
Return Order Process
Before jumping into the specific steps, it helps to have a general overview. Unlike a regular sales order, when you create a return order in D365, there are some additional steps to verify that the product has been returned. See this flow chart from Microsoft.
These are the high-level steps for a physical return order:
- Create a return order
- Arrive at warehouse for inspection
- Determine disposition
- Generate a packing slip
- Generate an invoice
Create Original Sales Order
Before we can create a return order in D365, we need to have a sales order to return. Here are the steps to create and invoice a sales order.
First, navigate to Accounts receivable>Orders>all sales orders.
Second, click the New button to create a new sales order.
Third, in the dialog that opens, specify a customer account. Then, click Ok.
Fourth, in the order that is created, enter an ‘ItemId‘ in a new line, in the ‘Sales order lines‘ fast tab.
Complete The Sales Order
First, click the ‘Complete‘ button in the top ribbon bar.
Second, in the order recap screen, click the ‘+Add’ button to add a method of payment to the order.
Third, in the dialog that opens, select ‘Cash’ in the ‘Payment method’ field. Next, set the ‘Payment amount’ field to be whatever is in the ‘Balance’ field to cover the order total. Then, click ‘Ok‘.
Fourth, after the method of payment has been added to the order, click ‘Submit’ to complete the order.
Invoice The Sales Order
First, go to the Invoice button tab. Select the ‘Invoice‘ button under the ‘Generate‘ group.
Second, in the dialog that opens, set the ‘Quantity‘ parameter to ‘All‘. This will include all sales lines to be invoiced, regardless of whether they have been picked or packed yet.
Notice, the Lines section should include at least one sales line.
Third, click the ‘Ok‘ button. If another dialog pops up warning that the order will be invoiced without printing, click the ‘Ok‘ button on that dialog box also.
Finally, if the sales order invoiced without issue, you will see a message saying ‘Operation complete‘, and the status will now be ‘Invoiced‘.
For later, make note of the sales order ID you created.
Create An RMA (Return Merchandize Authorization)
When a customer requests a return, the first step is to create a return order in D365.
First, navigate to Accounts receivable>Orders>All return orders.
Second, click the New button to create a new return order (RMA).
Third, in the dialog that opens, enter the customer account of the customer initiating the return, then select Ok. Notice, a return order will be created.
Fill In The Return Order
First, in order to bring in sales lines from an original order, navigate to the ‘Return order‘ button tab and click the ‘Find sales order‘ button.
Second, in the dialog that opens, in the Headers grid, mark the ‘select all‘ checkbox for the sales order(s) you want to create the RMA to be against.
Third, in the Lines grid, mark the ‘select‘ checkbox for each item the customer wants to return. Then, click Ok.
Fourth, back in the return order form, specify a ‘Return reason code‘.
Fifth, in the ‘Line details‘ fast tab, on the General tab, set the ‘Disposition code‘ field to ‘Credit only‘ if you wish to perform a ‘Credit only‘ return. To explain, ‘Credit only’ returns do not require the product to be returned. For this example, leave the ‘Disposition code‘ blank.
Sixth, to complete the return order in D365, click the ‘Complete’ button in the ribbon bar.
Finally, in the dialog that opens, click the ‘Submit‘ button.
For the next step, go to the ‘Header’ tab, and write down the RMA number and associated sales order created.
Register The Receipt Of Returned Items
After the products arrive at the warehouse for a return order in D365, the system needs to be made aware. To do this, there are a couple of different ways. See Microsoft’s documentation here.
For this example, I will show you how to register the items using the Arrival overview and Item Arrival forms.
Arrival Overview
First, navigate to Inventory management>Inbound orders>Arrival overview.
Second, in the ‘Arrival overview profile name’ field, select ‘Return order‘. Next, enter the ‘RMA number‘ from the previous step, then click the ‘Update‘ button up top.
Third, in the Receipts grid, notice that the RMA lines will appear. Select the checkbox ‘Select for arrival‘ for each item that has arrived.
Fourth, click the ‘Start arrival‘ button. Notice, a message will indicate that a journal has been created.
Item Arrival
After indicating that returned products have arrived, we need to register them back into inventory, depending on their state.
First, navigate to Inventory management>Journal entries>Item arrival>Item arrival.
Second, open the journal that was just created, if it is not open already.
Third, adjust the ‘Quantity‘ in the ‘Journal lines’ fast tab to indicate how many were returned.
Fourth, in the Line details fast tab, set the ‘Disposition code‘ to the appropriate value.
Fifth, click the ‘Validate‘ button up in the top bar. Finally, click the ‘Post‘ button and click ‘Ok‘ in the dialog boxes that open to post the journal.
Notice, if you navigate back to the return order in D365 and refresh the form, the Return status field on the line will now show as ‘Registered‘.
Click on the order shown in the ‘Sales order’ field, and invoice the sales order to complete the return process.
Conclusion
This was a basic run-through of how to perform a return order in D365. There are several different options based on whether the customer is refunded, whether inventory can be returned to general inventory, and whether a replacement order is created. However, this should get you started as you explore those options further.
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