Vendor Charge Back Overview

Purpose: Use the vendor charge back function in CWDirect to track the return of merchandise to a vendor for credit. This function allows you to:

• associate the charge back with a specific purchase order

• process inventory transfers and, optionally, adjust the inventory "off the books"

• create an A/P credit for the charge back, using either the cost from the item/SKU record or a different cost

• track reasons for returning merchandise to vendors

• add additional charges to the charge back

• process a credit for a different vendor than the one who shipped you the merchandise

• reverse a charge back

• print notifications to vendors and reports

In this topic:

• Process Overview

• Step 1: Create the charge back

• Step 2: Process the charge back

• Step 3: Reverse the charge back

• Additional Functions

• Vendor Charge Back Setup

• Related System Control Values

• Related Secured Features

• Vendor Charge Back Reason Codes

• Additional Charges

• Inventory Transaction Codes

• Writing Off Inventory

Process Overview

Purpose: The basic steps involved in creating and processing a vendor charge back are:

Step 1: Create the charge back

Using Working with Vendor Charge Backs (WVCB):

Define the vendor information:

• indicate whether the charge back is associated with a purchase order

• specify an Invoice vendor (the vendor who shipped you the merchandise)

• specify a Charge vendor (the vendor against whom you are processing the A/P credit). The Charge vendor may not be the same as the Invoice vendor, although the Invoice vendor number defaults. The Charge vendor may be different from the Invoice vendor if, for example, the original vendor was acquired by a different company.

• indicate the reason for returning the merchandise

• indicate the vendor's return authorization number

Define the item information:

• indicate the item(s) and quantity(ies).

• indicate the cost. The cost from the most recently received purchase order defaults.

• indicate where the stock should be picked.

• indicate where the stock should be transferred. If you do not specify a "To" location, the system performs a V inventory transaction, which removes the item from your inventory. See Writing Off Inventory.

Define additional information:

• additional charges. You can add charges to the vendor charge back, such as handling, duty, etc.

• messages. You can add message lines, and optionally print those lines on the vendor charge back notification.

• override address. You can specify an alternate address for the notification.

Step 2: Process the charge back

At any time after you have entered the vendor charge back, you can process it using Working with Vendor Charge Backs (WVCB). The steps involved in processing the charge back are:

Transfer the inventory:

The system performs a T (transfer) if you specify a "To" location; otherwise, it performs a V (return to vendor) transaction out of the item's "From" location. The system uses the cost from the item/SKU record when you process the inventory transaction.

Important: The system does not validate that you have sufficient stock in the "From" location to fulfill the vendor charge back. You can create inventory transaction errors by processing a vendor charge back if, for example, there is a printed quantity in that location; the location is frozen; there is a pending transfer quantity; you print pick slips for the item/location after creating the charge back but before processing the transfer; or if there is just not a sufficient quantity on-hand. To avoid inventory transaction errors, be sure to check the inventory in the location before creating and processing the vendor charge back.

Process the A/P credit:

The system creates a credit invoice for the Charge vendor, using the item cost that appears on the vendor charge back. If you have the VCB Perform Inventory Write Off During A/P Posting (E36) system control value set to Y, and you specified a "To" location for the inventory transfer, the system performs a V (return to vendor) transaction at this time as well. See Writing Off Inventory.

Ship the inventory:

The system changes the status of the charge back to S (shipped) if you enter a ship date. If you process the inventory and A/P credit without entering a ship date, the status remains P (processed). You can enter a ship date at any time, either at the same time as processing the other transactions or afterward.

Step 3: Reverse the charge back

You can reverse a processed or shipped charge back at any time if necessary using Working with Vendor Charge Backs (WVCB). When you reverse a charge back, the system:

Reverses the inventory transactions:

The system performs a V (return to vendor) reversal into inventory; the on-hand quantity increases by the item quantity on the charge back. See Writing Off Inventory.

Reverses the A/P credit:

The system creates an A/P invoice record in the amount of the original charge back credit.

Additional Functions

Printing: You can print or reprint notifications to the Charge vendor, either within Working with Vendor Charge Backs (WVCB) or through Printing Vendor Charge Back Notifications (PVCN). You can also print a report listing vendor charge backs in your company through Printing the Vendor Charge Back Report (PVCB).

Purging: You can purge all shipped or reversed vendor charge backs entered prior to a given date through Purging Vendor Charge Backs (PVCR).

Vendor Charge Back Setup

Purpose: You should make sure that you have completed all necessary or desired setup before working with vendor charge backs.

Related System Control Values

The system control values related to vendor charge back are:

• VCB Default "To" Warehouse (D86): Use this field to indicate to the warehouse code that should default in the "To" warehouse field on the Vendor Charge Back Detail Screen (Create A Vendor Charge Back). You can override this value.

• VCB Default "To" Location (D87): Use this field to indicate the location code that should default in the "To" location field on the Vendor Charge Back Detail Screen (Create A Vendor Charge Back). You can override this value.

• VCB A/P Invoice Number Default Method (E34): Enter VCBNUM in this field to have the system default the vendor charge back number followed by CR into the A/P credit invoice field that appears in the pop-up window when you process a vendor charge back. You can override this value.

• VCB Reverse A/P Invoice Number Default Method (E35): Enter VCBNUM in this field to have the system default the vendor charge back number followed by DR into the A/P invoice field that appears in the pop-up window when you reverse a vendor charge back. You can override this value.

• VCB Perform Inventory Write Off During A/P Posting (E36): Enter Y in this field if you want the system to perform a V (return to vendor) inventory transaction when you process the A/P credit for a vendor charge back, if you had specified a "To" location for the inventory transfer. See Writing Off Inventory.

Related Secured Features

The secured features related to vendor charge back are:

• VCB Cost Maintenance (A42): controls access to the Cost field on the Vendor Charge Back Detail Screen (Create A Vendor Charge Back).

• VCB Reverse Authority (A44): controls the ability to reverse a vendor charge back.

• VCB Delete Authority (A43): controls the ability to delete a vendor charge back.

Vendor Charge Back Reason Codes

The system requires a reason code for each vendor charge back. Use Working with Vendor Charge Back Reason Codes (WCBC) to create these codes.

Additional Charges

To add additional charges to a vendor charge back, you must set them up first in Working With PO Additional Charges (WPAC). You can also specify the general ledger account number to use when posting such charges.

Inventory Transaction Codes

Depending on whether you specify a "To" location for an item and the setting of the VCB Perform Inventory Write Off During A/P Posting (E36) system control value, the system performs either transfers (T) or return to vendor (V) inventory transactions, or both, when you process or reverse a vendor charge back. You can specify the general ledger account number to use for posting inventory transactions to the general ledger.

You use Work with Inventory Transaction Codes (WITC) to create these codes.

Writing Off Inventory

The system handles the inventory transactions related to vendor charge back differently depending on two factors:

• whether you specify a "To" location

• the setting of the VCB Perform Inventory Write Off During A/P Posting (E36) field in the System Control file.

The effects of each factor on how the system handles inventory transactions when you process or reverse a vendor charge back are described in this table.

VCB Perform Inventory Write Off During A/P Posting Setting	"To" Location Specified	Inventory Transactions when you Process Inventory	Inventory Transactions when you Process the A/P Credit	Inventory Transactions when you Reverse the Charge Back
N	Yes	T (transfer) out of original location and into "To" location	none	V (return to vendor) into the original location -- on-hand increases
Y	Yes	T out of original location and into "To" location	V out of "To" location -- on-hand decreases	V into the "To" location -- on-hand increases
N or Y	No	V out of original location -- on-hand decreases	none	V into the original location -- on-hand increases
If the system control value is set to N, and you specify a "To" location, you will need to adjust the inventory down at the "To" location outside of the vendor charge back process.

Note: The system always uses the cost from the item/SKU record for each inventory transaction, and the cost from the vendor charge back for each A/P transaction.