APER (SAP COE)

Gupta & Gaurav Sharan

January 2013

Supplier Returns using

Advance Returns
Management

Parinit Agarwal
Table of Contents

OBJECTIVE ............................................................................................................................................................ 3
SCOPE ................................................................................................................................................................... 3
Setting up Advance Returns Management for Supplier Returns: ........................................................................ 3
a. Activate Advance Returns Management ............................................................................................. 4
b. Define Return Reasons for Supplier Returns ....................................................................................... 4
c. Define Rejection Reasons for Supplier Returns ................................................................................... 5
d. Specify Settings for Replacement materials from Vendor ................................................................... 6
e. Specify delivery types for returns ........................................................................................................ 6
Supplier Returns using Advance Returns Management ...................................................................................... 7
Contacts ............................................................................................................................................................. 14
Author: ....................................................................................................................................................... 14

Advance Returns Management Page 2

OBJECTIVE

Advance Returns Management is a new Enterprise Business Function available as of SAP ERP
6.0, Enhancement Package 4.

If a material needs to be returned back to the vendor, this package is useful in not only tracking the
status of return, but also the status of replacement part as well as the invoices. It also provides
ability to create replacement purchase orders automatically.

SCOPE

You can use this business function to manage returns business transactions with greater efficiency and
transparency. This business function supports both customer returns returns from a known customer to
either a company location or an external vendor and supplier returns returns from a company location
to either an external vendor or another company location further up the supply chain.

With features for recording inspection results, specifying logistical follow-up, determining refunds, and
tracking all the documents associated with a returns business transaction, this business function provides
you with end-to-end support for the entire returns process. Given the importance of returns in many
industries (for example, construction and pharmaceutical wholesale), improving the efficiency and
transparency of the returns process helps you to cut costs and improve the level of service you provide to
your customers.

Supplier returns involve the return of goods from a company location to either:

An external vendor: This is known as a return to vendor.

Another company location further up the supply chain: This is known as a store return.

Advanced Returns Management integrates all the steps involved in returns handling:

Creation of the returns purchase order or returns stock transport order

Recording of material inspection results
Decision regarding logistical follow-up
Internal refund determination
Process monitoring

Setting up Advance Returns Management for Supplier Returns:

It will be described how to configure Advance Returns Management

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 a. Activate Advance Returns Management
IMG Path: IMG Materials Management Purchasing Purchase Order Returns Order
Advance Returns Management

Activate the Advance Returns for a specific document type. Please note that this means that the document
type ZMR in the below example would always be used for returns

b. Define Return Reasons for Supplier Returns

IMG Path: IMG Materials Management Purchasing Purchase Order Returns Order
Advance Returns Management

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 Maintain the list of reasons for return back to vendor

c. Define Rejection Reasons for Supplier Returns

IMG Path: IMG Materials Management Purchasing Purchase Order Returns Order
Advance Returns Management

Maintain the reasons for rejection of the particular material

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 d. Specify Settings for Replacement materials from Vendor
IMG Path: IMG Materials Management Purchasing Purchase Order Returns Order
Advance Returns Management

Here you specify the link to the document type to be used for procurement of replacement material

e. Specify delivery types for returns

IMG Path: IMG Materials Management Purchasing Purchase Order Returns Order

In this step we specify the specific delivery types to be used for returns orders

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Supplier Returns using Advance Returns Management

Create a Purchase order with the Returns Document type

Transaction Code: ME21N

You see the Returns tab enabled once you enter the document type

Continue to fill all the item level details. You will also notice a similar Returns tab at the Item Details:

The key fields in this tab are:

1. Return Reason: Use this to let Vendor know the reason for returning the material
2. Vendor RMA Number: This is used to capture the RMA Number given by the Vendor
3. Replacement Material Required: Use this checkbox if you want to get a replacement part
instead of the credit memo from vendor

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 Once you save the PO, the tracking of this Order can be enabled using two ways:

1. The Returns Overview button in the order gets activated

2. The second option is to use the navigation path to access the overview dashboard

Transaction Code: MSR_TRC_I

Navigation Path:Logistics Central Functions Advance Return Management Returns

Overview Display Returns Overview for Supplier Returns

The returns overview will be used to constantly track the status of this returns order

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 The dashboard provides information in terms of the needed steps, the status of the refund
and the status of logistics process.

It also provided information for each document along with the link to access the documents
from the dashboard directly.

After the PO creation, complete the Outbound delivery and Goods Issue Process using
transaction codes VL10D and VL02N. After the completion of these steps the status
overview is updated as below:

Please note at this stage, the logistics status for returns is complete but the refunding is open.
Refunding can be achieved either by a credit memo or by receiving a replacement part.

To receive a replacement material in return, we use the below:

Transaction Code: MSR_VRM_GR

Navigation Path: Logistics Central Functions Advance Return Management Replacement

Materials from Vendor Receive Replacement Materials from Vendor

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The transaction provides a screen to enter the new PO specific details (Ex: quantity, batch number,
Storage location) and create the replacement PO automatically.

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The transaction in the background automatically creates the order as well as the inbound delivery

In the next step once we post the Goods receipt, the system will complete the GR along with the
invoice/credit memo for both the orders (original returns order and the replacement order)

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Status after posting the GR:

The system posts the invoice in the background closing both the purchase orders

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The invoice/credit-memo is posted with $0 amount.

Following are the accounting entries:

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Contacts
Author:

Parinit Agarwal
Consultant, SAP Package Technology
Deloitte Consulting.
[email protected]
+91 7032 818388

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