Understanding Credit Orders

You use credit orders when a customer returns goods that you return to inventory, or when damaged goods are returned that you cannot return to inventory. In both cases, you must issue the necessary credits and make adjustments for the returned merchandise.

You enter a credit order manually to record a returned item and credit the current price to the customer. If necessary, you can override the default pricing information. You enter credit orders in the same way that you enter sales orders.

When the system generates a credit order, it retrieves the credit information from the S.O. Detail Ledger File table (F42199). The credit order amount is based on the unit price that the customer paid instead of the current price.

For credit orders, you can define the price that you refund the customer and the process that you use to receive the returned goods into inventory.

You can set up a document type for credit orders, which enables you to track credits in specific general ledger accounts and to record a separate credit history. You can set up automatic accounting instructions (AAIs) to direct entries to special accounts that are based on the credit order document type. The general ledger entries for credits are created when you run the Sales Update program (R42800).

To set up a credit order line type, you must activate the reverse sign option in the Line Type Constants program (P40205). When you enter a sales order, the system subtracts the quantity from available inventory. When you enter a credit order, the system does not subtract the quantity from available inventory.

You can set up a document type that identifies credit orders, and then set up status codes for the credit order document type and line type combination. Status codes define the steps that the system uses to process an order.

If you use price adjustments, you must set up negative quantity breaks to account for items in credit orders.