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Handling Returns

Once selling and purchasing are running, you will sometimes need to reverse part of a transaction. This is where return invoices come in.

Sales Return

Returns reverse an earlier transaction, so you must use the correct form for the returning party and the type of operation.

When Do You Use a Sales Return?​

Use it when a customer returns materials that were sold to them. The usual expected result:

  • The materials come back into the warehouse.
  • The financial effect of the operation is reversed, according to the payment type.

When Do You Use a Purchase Return?​

Use it when you return materials to the supplier after buying them. The usual expected result:

  • The materials go out of the warehouse.
  • The financial effect on the supplier or on cash is reversed.

What Do They Have in Common?​

  • The client or supplier.
  • The date.
  • Payment.
  • The warehouse.
  • The materials, quantities, and prices.

A Practical Tip​

Use a return when the operation is a real reversal of a purchase or sale, not as a quick way to correct a mistake that could have been fixed in the original invoice itself before it was approved.

Go Back to the Detailed Reference​

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Daily Receipts and Payments