Complaints Processing

Overview
• Focuses on the complaints processing options available for sales
and distribution processes

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Objectives
After completing this unit, you’ll be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail credit memo processing
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail returns processing
• Process a complaint with reference to a previous sales and
distribution process
• Use an invoice correction request and explain the process in detail
• Cancel a billing document

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Contents
• Credit Memo Requests
• Returns
• Invoice Correction Requests

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Credit Memo Requests
Lesson Overview
• Explains how credit memos are processed

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Objectives
After completing this lesson, you’ll be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail credit memo processing

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Complaints Processing
• All business run into complaints from customers, and these
complaints typically have to do with:
• Receiving the wrong merchandise
• Damaged merchandise
• Simply an incorrect invoice
• To resolve these situations, adjustments have to be made in the
system
• If the complaint involves valuable goods, then the goods must be
sent back
• Once return, they will be put in stock under a different stock category and
will be block from being available for sale again until they are inspected, and
the customer will receive a credit
• Blocked stock is the category where the stock is received and it’s represented in the
system with an S
• Customer will receive a credit when they have a justifiable reason for their complaint
• Customer might have been overcharged, or they might have received damaged goods
• User make sure the correct amount is credited to the customer account
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Processes in Complaints
Processing
• User creates returns, a credit and debit memo request, a credit and
debit memo or an invoice correction request after he has:
• Created a sales order
• Delivered the goods to the customer, and billed the customer for the goods
• Create a return request (authorization) if the customer returns the
goods to user
• User creates an invoice correction request if there is a price or
quantity deviation
• User can create the returns or a credit or debit memo request with
reference to a sales order or a billing document.
• User creates the invoice correction request or credit/debit memo
(without credit/memo request) with reference to the billing document
• For returns, credit/debit memo request or invoice correction request,
billing takes place after checking and approval, by creating a credit or
debit memo
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Processes in Complaints
Processing

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Processing Credit and Debit Memos
• Credit memos are processed in a similar manner to debit
memos
• Credit and debit memo requests can be created with reference to
a billing document or a sales order
• In this way, the system can determine the correct amount from the
preceding document
• For evaluation purposes, user must enter an order reason
• The credit/debit memo request contains a billing block, which
prevents immediate billing
• Once the process has been checked, it is approved by removing the billing
block
• When the billing documents are posted (credit/debit memo), the
required accounting documents are generated automatically
• In this way, the correct amounts are credited to or debited from the
customer account
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Processing Credit and Debit Memos

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Approving A Credit Memo
• Before a credit memo can be created, the process requires that an
approval or check step is carried out
• This is implemented by means of a billing block
• The return, credit memo request, debit memo request, and invoice
correction request documents contain a billing block
• These documents are checked by an employee with the
appropriate authorization
• Unjustified complaints are rejected and the reason for the rejection is
entered against the item(s) in question
• Once all the items have been checked, the document can be released for
billing
• At this point, the billing block is removed
• Rejected items are not copied to billing documents although
they are still available for evaluation purposes
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Approving A Credit Memo

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Credit and Debit Memo
• The credit and debit memo billing documents are created with
reference to credit or debit memo request sales document
types
• If your business process allow it, you can also create both document type
directly with reference to a billing document
• User can create credit and debit memo request referencing
previous business transaction such as an order or a billing
document, using VA01 (Sales Order Create)
• User have to specify the document type desired:
• CR – Credit Memo Request
• DR – Debit Memo Request
• When user create the credit memo request, user can define
whether the system will set the billing block automatically,
which forces an approver to open the document, either release
the request or reject it, and specify the reason code for each
item 15
Credit and Debit Memo

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Credit and Debit Memo
• The billing block applied to a credit memo request
• It’s a standard practice to block credit memo request for billing because it
requires user to send the money back to customer
• User can define the release procedure to be value driven, for
example:
• If the value of the credit memo request is below a predefined minimum
limit, it can be released automatically
• If the value of the credit memo request is above a certain value, the
workflow process routes the credit memo requests to the approver

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Credit and Debit Memo

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Credit and Debit Memo
• The final step in this process is to create the actual credit memo
• User can run transaction VF01 (Create Billing Document), and
then specify the credit memo request you want to process on the
initial screen and continue
• The billing document type will be determined for you
automatically based on the Customizing setting converting user
credit or debit memo request to the following:
• G2 – Credit Memo
• L2 – Debit Memo
• Debit memo request sales documents and debit memo billing
documents are processed exactly the same way as credit memos
and credit memos requests

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Lesson Summary
You should now be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail credit memo processing

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Returns
Lesson Overview
• Provides an overview of returns processing

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Objectives
After completing this lesson, you’ll be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail returns processing

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Returns Processing
• User create return orders when customer is sending goods
back because goods :
• were damaged during shipment
• Were the wrong items
• Were outside of the allowed shelf life
• Return process start with the customers returning the
goods
• If customer wants a refund for the amount user has invoiced, user
create a credit memo with reference to returns order
• If customer still wants to replace the originally shipped goods, user
create a free-of-charge subsequent delivery referencing returns
sales order
• Free-of-charge subsequent delivery is a sales document, which is created
to supply customer with replacement goods if the customer wants a
replacement product
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Returns Processing
• Returns can be created with reference to a billing document or a sales
order
• In this way, the system receives all the required data about, for example,
quantities and price agreements from the original document, thereby ensuring
that the correct document is processed further
• For evaluation purposes, user must enter an order reason
• Returns processing requires that an approval step is carried out, which is
implemented by an automatic billing block
• When the damaged/defective goods arrive at user’s warehouse, post the
goods receipt on the basis of a returns delivery
• It is usually posted to a separate returns stock rather than to the unrestricted-
use stock
• This posting can be made before or after the credit memo has been created
• Once the returns have been approved (that is, the billing block has been
removed), the credit memo and the required accounting documents are
generated as a result of the billing process
• The correct amount is automatically credited to the customer account
• This step can be carried out independently of the inbound delivery of the
damaged/ defective goods 25
Returns Processing

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Lesson Summary
You should now be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail returns processing

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Invoice Correction Requests
Lesson Overview
• Explains the function of an invoice correction
request

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Objectives
After completing this lesson, you’ll be able to:
• Process a complaint with reference to a previous
sales and distribution process
• Use an invoice correction request and explain the
process in detail
• Cancel a billing document

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Processing Invoice Corrections
• The invoice correction is used to correct quantities or
values for which the customer has already been billed
• An invoice correction request is always created with
reference to the incorrect billing document
• The customer receives a document containing the
following information: the quantity and price that were
originally calculated, the correct quantity and price,
and the amount credited to or debited from the
customer account

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Processing Invoice Corrections

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Invoice Correction Procedure
• In the invoice correction request, a credit/debit memo item is
generated for each item on the incorrect billing document
• When processing begins, therefore, the net value of the document is
zero
• All the credit memo items are listed in the document followed by the
debit memo items
• Changes can only be made to the debit memo items
• The credit memo item reflects the original (incorrect) price and
quantity
• The debit memo item will reflect the quantity and price that should
have been charged
• The net values to be credited are derived from the difference between
the credit and debit memo items
• Credit/debit memo items are always deleted in pairs
• Item pairs that have not been changed can be deleted
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Invoice Correction Procedure

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Invoice Correction
• The invoice correction request represents a combination of
credit and debit memo requests applied with reference to a
billing document
• When user create the invoice correction request, the billing
document items copied into the request are automatically
duplicated, so for every item in the billing document, user will
see a credit item reversing fully the incorrect line and second
debit item, allowing user to make quantity and value correction
• The difference between the two lines created will show user the
final correction amount to be credited back to customer
• User can create this document with reference to a billing
document using transaction VA01 (Sales Order Create), where
user set the document type to RK (Invoice Correction
Request)
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Invoice Correction

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 Invoice Correction
• First the credit memo items will appear and then all the debit memo
items
• If user is expecting customer to send the goods back in business
scenario, user should be using a returns order
• A credit memo item can’t be changed, whereas a debit memo item
quantity and price can be adjusted as needed
• If user need to delete any of items, user has to delete them in pairs,
including credit and corresponding debit memo items
• User can perform quantity difference adjustments when a customer
complaint is due to changed or inaccurate delivery by changing the
debit line quantity
• User can use price difference adjustments if customer complaint is
due to incorrect pricing by changing the pricing value on the pricing
details part of the screen (access this screen by clicking the ITEM
CONDITION button)
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Invoice Correction

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Canceling A Billing Document
• A billing document may have to be canceled, for
example, if the payment terms or address of the payer
have changed
• In this case, a separate billing document (cancellation
billing document) and a new accounting document are
generated
• This revises all the postings made as a result of the incorrect
billing document by reposting each posting item with the opposite
symbol

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Canceling A Billing Document

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 Canceling Billing Documents
• To cancel any billing document, user has to create a cancellation
document that records the reverse postings into Financial Accounting
as well
• The most commonly use billing document cancel transaction is
Transaction VF11 (Cancel), which user can get to by choosing Logistic -
> Sales and Distribution -> Billing -> Billing Document -> Cancel
• If user pick a sample sales order with completed billing status, user
can use the cancellation transaction for the sales order to verify the
status of the order
• Standard invoice can be cancelled with document type S1 (Invoice
Cancellation), and credit memos can be cancelled with document
type S2 (Cancel Credit Memo)
• The completion of cancellation allows user to make necessary
correction and rebill your delivery or sales order

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Lesson Summary
You should now be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Use an invoice correction request and explain the process in detail
• Cancel a billing document

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Unit Summary
You should now be able to:
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail credit memo processing
• Process a complaint with reference to a previous sales and
distribution process
• Carry out and explain in detail returns processing
• Process a complaint with reference to a previous sales and
distribution process
• Use an invoice correction request and explain the process in detail
• Cancel a billing document

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