The Return Material Authorization module notifies receiving to expect a return from a customer.
Once the material is received back from the Customer, this module is used to record the receipt, create the Re-Work Work Order, adds the product into the work order, and the applicable Credit Memo. Once the RMA is received, a Credit Memo automatically forwards to the Accounting Accounts Receivable Credit Memo module, if a dollar amount was entered for the return.
When the re-work/replacement is ready to re-ship, a Packing List and Invoice can be created.
Note: When an RMA is created, both the pending receipt of the items from the customer and the subsequent shipment of replacement product to the customer are entered. Reference is made to the original Sales Order and Invoice only to allow the Credit Memo (when created) to have a place to apply the credit. Utilizing this approach, the user is free to set different schedules for receiving and/or shipping the material without affecting the original Sales Order. It also allows the user to place different prices or costs on the line items. For example, it may be that full credit is issued on the RMA receipt, but extra charges apply on the reshipment because of non-warranty issues. Or the user may wish to have a “no-credit, no-charge” RMA policy where items are received and reshipped with no General Ledger affects. Or, the receipts may be at no credit, but the return shipment includes only the rework charges. Because of the variety of possibilities, trying to incorporate any of these actions into the original Sales order would make it really difficult to maintain data about the costs associated with the order. This also permits the user to develop reports for on-time shipments, and shipping/scheduling quality.
To review how an RMA impacts MRP see Article #2507.
NOTE: If you do not follow this procedure to bring material back into your plant, your rework work orders do not have the value of the original product placed in WIP, and therefore when completing your rework work orders, there will be a huge variance created because there were no items placed in WIP (except for a few replacement parts), yet the product is moved from WIP to FGI at standard cost. When you use the RMA module these accounts balance out, with the variance being only those items added to the work order.
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