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Customer Returns in ERP - Advanced Returns

Management
Purpose
You can use this business process to manage customer returns in SAP ERP with advanced functions that provide
end-to-end support for the returns process. This business process supports all returns methods. This means that
you can handle returns made at the counter, returns that involve a shipment to the warehouse – including
subsequent reverse logistics – and direct shipments from customer to vendor.
Advanced Returns Management builds on the Basic Processing variant of the customer returns business process.
Similarly to basic returns processing, this business process for a customer returns business transaction starts with
the creation of a returns order in SAP ERP; returned materials are also received using a returns delivery and a
corresponding goods receipt posting. With Advanced Returns Management, however, you can also record the
results of a material inspection and define logistical follow-up activities, either directly in the returns order for
received materials, or in a new Material Inspection in Warehouse transaction for materials that have been returned
to the warehouse. In contrast to basic processing, the system speeds up the returns process in Advanced Returns
Management by creating follow-up documents automatically based on the defined logistical follow-up activities and
the settings for customer refunding. Advanced Returns Management also features a new Customer Refund
Determination transaction that makes it possible to take different inspection results into account to calculate the
refund amount, as well as a new Returns Overview transaction that makes it possible to monitor the whole returns
process and all associated documents.

Prerequisites
The Customer Returns business process is related to sales business processes. Therefore, you usually create
returns orders with reference to an preceding sales order or the corresponding billing document (invoice).
You can only use this business process if you have activated the Advanced Returns Management
(OPS_ADVRETURNS_1) business function.

Process Flow

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The following business process runs in SAP ERP:

1. Create returns order
You create the returns order in the same way as in basic processing. Additionally, you specify the returns-
specific data for Advanced Returns Management.
2. Change returns order (optional)
If you specify Inspection at Customer Site as the logistical follow-up activity for a returns order item, then you
subsequently change the returns order to specify whether you want to have the material returned or you want
to leave it at the customer site. Regardless of the logistical decision, you can define a refund for the
customer.
If you specify Delivery into Plant – Materials Still Unknown as the logistical follow-up activity for a returns
order text item, then you subsequently change the returns order to specify which materials have been
shipped to your warehouse. The intermediate returns order text item – which is relevant for delivery but not
goods receipt – can be used to schedule the shipment of the materials to be returned.
3. Create returns delivery
When you save the returns order, the system creates a returns delivery for the returns order. Returns order
items for which you specified Inspection at Customer Site as the follow-up activity are ignored.
4. Post goods receipt
If you have selected the Material Received checkbox for returns order items, the system posts the goods

receipt for the corresponding returns delivery automatically. In Customizing, you can specify the storage
location and the stock type for the stock of returned materials. You can make specific stock settings for the
logistical follow-up activities Receive into Plant, Immediately Move to Free Available Stock , Immediately
Move to Scrap, and Immediately Move to Specified Stock .
When you receive the materials into the warehouse after a shipment from the customer’s site, you post the
goods receipt as part of returns delivery processing.
5. Perform material inspection in the warehouse
You inspect the material in the warehouse for the returns delivery or handling unit as part of a returns
delivery. You can enter a single inspection result for the whole returns delivery or handling unit at header
level, or you can enter different inspection results at item level. You can even split an item if the inspection
reveals that different quantities of the returned material have different material statuses.

6. Define logistical follow-up activities

You define logistical follow-up activities at header level, at item level, or at split-item level. When you confirm
these activities, the system creates the relevant follow-up documents automatically.
In Customizing activity Business Add-Ins (BadIs) ® BAdI: Change Data for Automatically-Created Follow-Up
Docs of BAdI MSR_LFE , you can enter implementations for specific BAdI methods to change document data
of the different logistical follow-up documents.
If you specify No Further Activities, the returns process is complete from a logistical point of view.
7. Create goods movement (optional)
If you specify Transfer to Free Available Stock as the logistical follow-up activity for a delivery item or a split
item in the material inspection transaction, then the system posts the corresponding goods movement to free
available stock using the storage location and stock type that you specified in Customizing for that logistical
follow-up activity.
If you specify Transfer to Specified Stock as the logistical follow-up activity for a delivery item or a split item in
the material inspection transaction, then the system posts the corresponding goods movement to specified
stock. It uses the storage location and stock type that you entered in the Logistical Follow-Up area of the
Material Inspection in Warehouse screen.
8. Create goods issue (optional)
If you specify Immediately Move to Scrap as the logistical follow-up activity for a returns order item, or
Transfer to Scrap as the logistical follow-up activity for a delivery item or a split item in the material inspection
transaction, then the system posts the corresponding goods issue to scrap.
9. Create returns purchase order (optional)
If you specify Ship to Vendor as the logistical follow-up activity either for a returns order item with received
material or for a delivery item or split item in the material inspection transaction, then the system creates the
corresponding returns purchase order for the specified vendor. If necessary, you can change the returns
purchase order.
Then you continue with the returns process as described in Supplier Returns in ERP – Advanced Returns

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Management for returns purchase orders.

If you specify Direct Shipment to Vendor as the logistical follow-up activity for a returns order item, the
system creates the corresponding returns purchase order for the specified vendor. If necessary, you can
change the returns purchase order.
Optionally, you can create an outbound delivery for the returns purchase order, and post a statistical goods
issue similar to the procedure for returns purchase orders from own locations. This allows you to record the
results of a material inspection performed by the vendor. Financial settlement takes place as described in
Supplier Returns in ERP – Advanced Returns Management for returns purchase orders.
10. Create returns stock transport order (optional)
If you specify Ship to Other Plant or Ship to Vendor via Other Plant as the logistical follow-up activity either
for a returns order item with received material or for a delivery item or split item in the material inspection
transaction, then the system creates the corresponding returns stock transport order for the specified plant. If
necessary, you can change this document.
Then you continue with the returns process as described in Supplier Returns in ERP – Advanced Returns
Management for returns stock transport orders.
In the case of Ship to Vendor via Other Plant, the system proposes Ship to Vendor as the next logistical step
when you process the return in the material inspection transaction in the receiving plant of the returns stock
transfer.
11. Create outbound delivery to customer (optional)
If you specify Send Back to Customer as the logistical follow-up activity either for a returns order item with
received material or for a delivery item or split item in the material inspection transaction, then the system
creates an outbound delivery with the customer as the ship-to party. This outbound delivery completes the
returns process from a logistical point of view.
12. Create credit memo in the receiving company code (optional)
In the case of returns orders in which the company code of the material receiving plant at item level differs
from the company code associated with the sales organization at header level, you create a credit memo in
the receiving company with intercompany billing. In this way, the material receiving company compensates
the other company code for issuing the refund to the customer. You can create credit memos individually or
collectively, or you can schedule a background job to create pending credit memos.
13. Create credit memo in internal refund determination (optional)
For returns orders with different company codes, you can define (in Customizing) exceptional situations in
which the credit memo must be created in the material receiving company code using internal refund
determination.
14. Create credit memo for company code that refunds customer (optional)
You create the corresponding credit memo in the company code that refunds the customer. Usually, you set
up an ALE scenario so that this credit memo document is created automatically when you create the credit
memo for the receiving company code.
15. Create credit memo request in customer refund determination (optional)
If you select By Credit Memo Request or After Receipt of Credit Memo as the refund control in a returns
order item, you must use the Customer Refund Determination transaction to create a credit memo request

for the customer.

For more information, see Returns Refund Determination – Advanced Returns Management.
16. Create credit memo (optional)
If you select Immediately as the refund control in returns order items, you create a credit memo for those
items. If you make the appropriate settings in Customizing, the system can create credit memos
automatically when you save the returns order. Alternatively, you can create the credit memos in a separate
step, either individually or collectively. You can also schedule a background job to create pending credit
memos.
You follow the same procedure to create the credit memos for credit memos requests that you created in the
Customer Refund Determination transaction.
For more information, see Returns Refund Determination – Advanced Returns Management.
17. Cancel process steps (optional)
You can cancel each step in customer returns processing. For more information, see Cancel Process Steps
in Customer Returns – Advanced Returns Management.
18. Monitor customer returns

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In addition to the options available with basic processing, there is a specific Returns Overview transaction for
returns orders. This transaction allows you to monitor all the documents associated with a customer returns
business transaction and to check the overall processing status, the logistical processing status, and the
refunding status.
19. Archive data for process tracking
You archive the process-tracking data specific to Advanced Returns Management after you have archived all
the documents related to a customer returns process.

Result
A customer returns business transaction is complete when the returned materials have reached their final
destination, and you have determined and paid out the refund to the customer.

Example
For descriptions of typical customer returns scenarios in Advanced Returns Management, see Typical Scenarios in
Advanced Returns Management.

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