Calculate Credit for Referenced Returns

Specify whether to calculate credit according to the secondary quantity that you actually receive or to the quantity that your customer requests when they place a return order. This feature applies to a referenced return that has a dual UOM item that you price in the secondary UOM. For details, see Overview of Setting Up Dual Units of Measure.

If your customer returns an item that uses more than one unit of measure, and if the return references the original sales order, then Order Management sets the return quantity and the secondary return quantity to the actual quantity that you fulfilled on the original order, by default. Pricing calculates price on the return in the same way that it calculated price on the original order.

If you price the item in the secondary unit of measure, then Pricing calculates credit for a referenced return according to the secondary fulfilled quantity on the referenced order.

Consider an example.

• Assume your customer orders 3 cases of a dual UOM item, and the secondary unit of measure for the item is Pounds.
• You set up a rule that converts the primary unit of measure Case to the secondary unit of measure Pounds from 1 case to 12 pounds.
• You place an order for 3 cases and Order Management sets the secondary quantity to 36 pounds.
• You ship all 3 cases but you set the secondary quantity when you ship the item in Oracle Shipping to 34 pounds to account for some variability in the actual weight that you ship.
• The secondary quantity that you fulfil and invoice for the 3 cases is 34 pounds, where each case weighs 11.33333 pounds.
• You invoice the customer for 34 pounds.
• Sometime later, your customer returns 3 of the 3 cases that you shipped.
• Pricing calculates the Secondary Return Quantity as 34 pounds. Pricing uses this quantity to calculate credit regardless of the secondary quantity that you actually receive and deliver back to the warehouse. This way, the credit matches the amount that you invoiced the customer on the original order line.

In some situations, such as in the consumer goods and food processing industries, the quantity that you originally shipped might be less than the quantity that you receive on the return. You can use this feature to select the quantity you want to use to calculate credit for the referenced return. You can calculate credit according to the secondary quantity that you actually receive.

Assume the secondary quantity is 34 pounds on the original order, but its 35 pounds when the item on the return order actually arrives at your receiving dock. You can use this feature to record the quantity as 35 pounds instead of 34 pounds and calculate credit to your customer for 35 pounds. Your customer will receive a credit that's higher than what they paid on the referenced order.

Here's your setup.

1. Go to the Setup and Maintenance work area, then go to the task.
   • Offering: Order Management
   • Functional Area: Orders
   • Task: Manage Order Management Parameters
2. On the Manage Order Management Parameters page, set the Type of Secondary Quantity for Referenced Returns parameter.

   Value	Description
   Returned Quantity in the Secondary UOM	Calculate credit according to the quantity that you actually receive on the return order from your customer, in the secondary unit of measure.
   Ordered Quantity in the Secondary UOM	Calculate credit according to the quantity that you shipped on the referenced order, in the secondary unit of measure.

You can also specify whether to accept a credit amount that's more than the invoiced amount.

1. Go to the Setup and Maintenance work area, then click Tasks > Manage Transaction Types.

   For details, see Transaction Types.

2. Search for, then open the Manage Transaction Types page.
3. On the Manage Transaction Types page, in the search area, enter Invoice in the Name attribute, then click Search.
4. In the search results, in the Name column, click the transaction type that you use in your implementation, such as Invoice_1.

5. On the Edit Transaction Type page, enable the Allow Overapplication option.

   If you don't enable Allow Overapplication, and if the credit amount is more than the original invoice amount, then the credit will fail, and you can't remove the failure from Oracle Receivables until you enable it. We recommend that you consult with your sales and finance departments about whether to enable this option.