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Exclude Item application entries from inventory Items that have been returned due to a defect

Posted on by 8
Dear Community Experts
 
I have a Client that has inventory items for wich Item Ledger Entries are applied to each inventory transaction. One of the cases is, when a Customer of the Client returns an Item that has no worth, as it is broken or defect. When the return is posted, the sale, to which the Item has previously been applied is cancelled, so that the balance of his Inventory ledger higher than expected. Another case is, the Client has Inventory Items with no Inventory value, as those Items are accounted directy in the P&L. Is there a way I can exclude the item application for this exceptional cases? What is the best practice to deal with such cases? 

Your help will be much appreciated!
 
Many thanks
Juliana
  • Suggested answer
    Inge M. Bruvik Profile Picture
    Inge M. Bruvik 32,744 Moderator on at
    Exclude Item application entries from inventory Items that have been returned due to a defect
    If you have inventory that you want to reduce the inventory value for you should do what we call a revaluation.
    I did a blog post about that a while back where you can read about that process.
     
    For items that are broken I think there are basically two scenarios.
    In some cases you will get / request a credit memo from your vendor. And then that creditmemo will reduce the inventory on hand so you get the correct physical inventory and inventory value.
     
    If the company needs to take the cost them self I would recommend to adjust the inventory.
    That can be done in two ways. You can use the adjust inventory functionality as described here:
     
    Or you can post a transaction directly in a item journal.
    Then you will have to use the entry type of  "negative adjustment".
     

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