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Procurement · Supplier returns
Goods go back to the supplier. The credit comes back to you.
Raise a return against the purchase order the goods came in on, or against a supplier who has sold you the item before. Approving it takes the stock out of the bin it leaves from, marks the named serials as returned, and raises a debit note for the value with the VAT reversed — ready to set against their next bill, offset in a payment run, or close as refunded.
Goods returned to supplierRTV-0042
Goods have left | Item | Qty | Unit | Line |
|---|---|---|---|
| Export carton 60×40order price | 12 | 1,250.00 | 15,000.00 |
VAT at 16%2,400.00
Debit note · raised on approvalDN-0042
Open Net15,000.00
VAT2,400.00
Owed back by the supplierKES 17,400.00
DrAccounts payable17,400.00
CrInventory (at average cost)14,160.00
CrPurchase price variance840.00
CrInput VAT2,400.00
One approval, three effectsstock out of its bin, serials marked returned to the supplier, and a debit note in the ledger
Never more than receivedagainst an order, you return only what arrived on it and has not gone back already
Inventory at its own costany gap between the agreed price and average cost lands in purchase price variance
Credit taken onceapplied to a bill, offset in a payment run, or recorded as refunded — never twice
Two ways to raise a debit note
With goods leaving the building, or with only money changing.
Both live on one screen, Returns & debit notes, reached from the purchase orders list and from the bills panel on an order. A return moves stock and raises its note in the same step; a debit note without a return is for the credits that come with no goods attached.
Return goodsThe stock leaves; the note follows from it
- Pick the order the goods came in on, or start without one. With an order, its supplier and items fill in and the VAT rate is suggested from that order’s bills.
- Say where they leave from — warehouse and location — the return date (today or earlier), the VAT rate the supplier charged, and why they are going back.
- Add whole-unit quantities. Leave the unit cost blank to use the order price, or the item’s average cost when there is no order. Name the serial numbers for a serial-tracked item.
- Save it as a draft, which you can still edit or cancel.
- Approve — goods have left. Stock comes out, serials are marked returned to the supplier, the debit note is raised, and the order’s three-way match runs again.
Numbered from your own document sequence, RTV- for the return and DN- for its note.
Debit note without a returnA credit with no goods attached
- Choose the supplier and what the note is for: a price adjustment, or other — a short-delivery credit, a rebate.
- Enter the amount the supplier owes back including VAT, as it appears on their credit note, and how much of it is VAT.
- Pick the account to credit for the net — Purchases unless you choose another — and optionally the purchase order it relates to.
- Raise it. It posts at once and is open to apply or refund.
This is also the route for a disputed service. A return refuses a service item outright, because there is no stock to send back — the form says to raise a debit note instead.
What a return checks
Every line is held to what actually happened.
Which items may go back is checked when the return is saved. How many may go back is checked at approval, inside the same transaction that moves the stock and with the order locked, so two people approving returns against one order at once cannot both slip past the limit.
Only what the order received
Against an order, every item must be on it, and the quantity can be no more than was received on that order and not already returned.
Export carton: 200 received on PO-0311 and not yet returned, so 201 cannot go back against it.Only to whoever sold it
Without an order, the item must be on one of that supplier’s orders or bills already. Goods cannot be returned to a supplier who never supplied them.
Only stock that is there
At approval, the warehouse and location must hold the quantity as available stock. A user tied to one warehouse returns from that warehouse only.
Serials up to the units
A serial-tracked line can name as many serial numbers as units going back, never more, and those units leave the register as returned to the supplier.
A second approver, if you want one
Under Settings → Procurement Defaults, require a second person: whoever prepared a return then cannot approve it. Off by default, for teams where one person does both.
Goods only
A service item is refused on a return. Quantities are whole units, and the return date cannot be in the future.
What posts to the ledger
Inventory falls by what the stock cost, not by what you agreed.
The supplier credits you at the order price. Your inventory account carries the goods at their average cost. When those differ, the difference goes to purchase price variance, so the inventory account keeps agreeing with the stock valuation report.
| Account | Debit | Credit |
|---|---|---|
| Accounts payable — Pwani Packaging | 17,400.00 | |
| Inventory (12 × 1,180) | 14,160.00 | |
| Purchase price variance (12 × 70) | 840.00 | |
| Input VAT (16% of 15,000) | 2,400.00 | |
| Balanced | 17,400.00 | 17,400.00 |
Debit note without a returnPayable down, chosen account credited
Dr Accounts payable for the gross; Cr the account you chose for the net; Cr Input VAT for the VAT part.
Note set against a billNothing posts
The payable already fell when the note was raised. Applying it only reduces what that bill still owes, so the same credit cannot be taken twice.
Supplier refunds itMoney in, payable restored
Dr the account the money arrived in — Bank unless you choose another — Cr Accounts payable.
Withholding taxA note settles its share
On a bill carrying withholding tax, an applied note books its share of the withholding exactly as a payment would.
Using the credit
Three ways a debit note closes.
A note stays open until what it is worth has been applied, refunded, or both. Its status follows from the amounts — open, applied or refunded — never from a field someone typed.
Apply
Set it against a bill
From the note, choose one of that supplier’s open bills and an amount, up to the smaller of what is left on the note and what the bill still owes. A note can be split across several bills, and the bill page lists the supplier’s open credit beside its balance.
BILL-0093 balance290,000.00
DN-0042 applied− 17,400.00
Still owed272,600.00
Offset
Let the payment run net it off
You do not have to apply notes by hand before paying. A payment run counts the supplier’s open credit against their bills, pays only the rest in cash, and applies the notes when the run is paid. A bill wholly covered by notes settles with no payment at all.
Refund
Record the supplier’s refund
When the supplier has no open bill and pays you back instead, record the amount received, the account it went into and a reference. Part of a note can be applied and the rest refunded.
A debit note is valued in your organization’s base currency. Against a bill in another currency it is refused with a clear message, and taken as a refund instead, so base units are never knocked off a foreign balance.
The stock side
Which stock a return may take.
Export carton 60×40 · Nairobi Main, Bay C2
140 on the shelfAvailableCan go back
12 from an expired batchAvailableCan go back
20 under quality holdQuarantinedRelease first
30 held for a customer orderReservedKept for the order
- Available stock at that bin. A return draws on stock that is available at the warehouse and location it names, and approval is refused when there is not enough there.
- Expired and recalled batches may go back. They are blocked from sale and issue, but returning them to the supplier is often the reason for the return, so a return can take them.
- A quality hold stays a hold. Stock marked quarantined, damaged, inspection pending or returned is not drawn on by a supplier return. Release the quantity from its hold first, then approve the return.
- Reservations and counts are respected. Stock promised to a customer order or a manual reservation is not taken, and a location locked for a stock count refuses the movement until the count closes.
Undoing
When the supplier refuses the goods, the books follow them home.
Draft return
Cancel it
Nothing has moved yet, so cancelling a draft changes no stock and posts nothing.
Approved return
Reverse it
The goods come back into the warehouse and location they left from, the serials return to the register, the debit note is cancelled with its journal reversed, and the order’s three-way match runs again. Refused once the note has been applied or refunded — undo that first.
Note without a return
Cancel it
While nothing has been applied or refunded, cancelling reverses its journal. A note raised by a return is undone by reversing the return, never on its own.
Web, app and API
Approve the return from the loading bay.
On the web
Lists of returns and debit notes with filters, the return form, approval, reversal, cancellation, and the apply and refund panels on each note. One permission, Manage supplier returns, covers all of it.
In the mobile app
See returns and notes, raise a return against an order, approve it once the goods are on the truck, raise a price debit note, and apply a note to a bill or record a refund.
Over the API
The app’s API lists returns and notes at /payables/returns, creates and approves returns, and raises, applies and refunds notes under /payables/debit-notes, behind the same permission.
What AWRA OpsHub does today
- Returns against a purchase order, limited to what was received on it and not already returned, with the order’s three-way match re-run on approval and on reversal.
- Returns without an order, limited to items the supplier has sold you on an order or a bill.
- One approval that moves stock and raises the debit note, with serial numbers marked returned to the supplier and expired or recalled batches allowed to go back.
- An optional second approver, so whoever prepared a return cannot approve it.
- Debit notes without a return for price adjustments and other credits, entered gross with the VAT part stated.
- Inventory credited at average cost, with the difference from the agreed price posted to purchase price variance and the VAT reversed to input tax.
- Applying a note to the same supplier’s open bills, split across several, with withholding tax booked for the share it settles.
- Payment runs that offset open notes and pay only the remainder in cash.
- Recorded supplier refunds into the account you choose.
- Reversal of an approved return that puts the stock and serials back and reverses the note’s journal.
- Web, mobile app and API for listing, raising, approving, applying and refunding.
More we can add to your workspace
- A printable goods-out note and debit note, emailed to the supplier from the record.
- Returns raised straight from a quality hold, taking the held quantity without releasing it first.
- Debit notes in the supplier’s currency, to apply against a foreign-currency bill.
- Debit notes in the vendor portal, so the supplier sees and acknowledges each credit.
- Fractional quantities on a return, for items held in decimal units.
- Reversal and cancellation in the mobile app, alongside approval.
- Replacement tracking, linking a return to the goods the supplier sends in its place.
Where we point you to a specialist
- We will not take a credit twice. A note set against a bill posts nothing more, and a note that has been applied or refunded cannot be cancelled until that is undone.
- We will not move stock before you say the goods have left. A return is a draft until someone approves it; approve when the goods are on their way back.
- We will not decide what the supplier owes you. The note carries the amount on their credit note or the price on your order; agreeing it is between you and the supplier.
A printable debit note emailed to the supplier and returns raised from a quality hold are the two items in that middle column most procurement teams ask for first. Tell us how returns run in your warehouse today and we will come back with a written spec, a timeline and a price.
Around the return
Where returns meet the rest of procurement.
Purchase orders, receiving and matchingThe order and receipt a return is checked against. Supplier bills and payablesThe bills a debit note is set against. Payment runsPay a week of bills with open credit netted off first. Inventory status and quality holdsHold damaged or suspect stock before it goes back. Withholding taxBooked for the share a payment or applied note settles. Purchase order change ordersRevise an issued order instead of returning against it.
Frequently asked questions
Do I have to return goods against a purchase order?
No. A return can be raised against the order the goods came in on, which limits it to what was received on that order and not already returned. Without an order, the item must be on one of that supplier’s earlier orders or bills.
What happens when a supplier return is approved?
The stock comes out of the warehouse and location it leaves from, any named serial numbers are marked returned to the supplier, a debit note is raised for the value including VAT, and a return against an order re-runs that order’s three-way match.
How is a supplier return valued in the ledger?
Accounts payable is debited for the gross value. Inventory is credited at what the stock cost, its average cost, input VAT is credited for the VAT part, and any difference between the agreed price and the stock cost goes to purchase price variance.
Can I raise a debit note without returning goods?
Yes. For a price agreed down after billing, a short-delivery credit or a rebate, raise a debit note without a return: the amount the supplier owes back including VAT, the VAT part, and the account to credit, Purchases unless you choose another. A disputed service also goes this way, because a return refuses a service item.
How do I use a debit note?
Set it against one or more of the same supplier’s open bills, let a payment run offset it and pay only the rest, or record the supplier’s refund into the account the money arrived in. Applying a note posts nothing further, so the credit cannot be taken twice.
Can a return take stock that is under a quality hold?
Not directly. A return draws on available stock at the bin it names. Release the quantity from quarantine or damaged status first, then approve the return. Expired and recalled batches can go back without that step.
Can I undo an approved return?
Yes, while its debit note has not been applied or refunded. Reversing it puts the goods back where they left, returns the serials to the register, and cancels the note with its journal reversed.
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