Thursday, November 19, 2009

Understanding Purchase Return in Dynamics GP.

In Dynamics GP for Purchase Return available 4 options, which option should I select to make Purchase Return?

Let see
1) Return
2) Return with Credit
3) Inventory
4) Inventory With Credit

1) Return
Select “Return” type when you received the Item and it’s not Matched to Invoice. Vendor Credit is not applied with above type.

Inventory A/c Cr $ XXX
Accrued Purchase A/c Dr $ XXX

2) Return With Credit
Select “Return with Credit” option when Item is Received and Matched to Invoice. Vendor Credit is applied.

Inventory A/c Cr $ XXX
Accounts Payable A/c Dr $ XXX

Above Entry will applied to your GL as well as Vendor Balance

3) Inventory
When should user select the above option?
a) When there is No Receipt or Matched Invoiced that means if user enter Inventory Adjustment from Inventory Transaction((Transaction-->Inventory-->Adjustment) and want to make Return Entry against those Adjustment
b) Variance Transaction (Transaction-->Inventory-->Variance)

Again Vendor Credit is not applicable; Inventory On Hand Qty will reduce.

Inventory A/c Cr $ XXX
Accrued Purchase/Wastage A/c Dr $ XXX

4) Inventory w/Credit
On Same “Inventory” scenario for “Inventory w/Credit” option but Vendor Credit are applicable.

Your Distribution will look like:
Inventory A/c Cr XXX
Accounts Payable Dr XXX

Above Entry will affect only your GL balance to get applied against your Vendor Balance
do not forget to apply your Return with Vendor Invoice (Transaction-->Purchasing-->Apply Payable Documents”)

Option 3 and 4 i.e. “Inventory” and Inventory w/Credit can be applied for your Opening Qty return.


  1. Hello, so a Return type creates a credit document called Return that needs to be applied to an open invoice? And a Return with Credit creates 2 credit documents: a Return AND a credit Memo and both need to be applied to open invoices?

  2. Return will just return 'Items' it won't apply to vendor balance. Return with Credit will create only one document but it will 'Return' Items as well as it will reduce your vendor balance.

  3. I am trying to customize the Purchase Returns Document using Report Writer. I've looked high and low for the report's name in the Report Writer listing. Does anyone know the title of this report so I can customize it?

  4. Hello, on a Return With Credit you are crediting inventory. But what about the cost layer table IV10200? If this table is not adjusted for the same amount then the value of the cost of the items will not equal the inventory gl account. How does the IV10200 table fit into the equation? Thanks.

  5. Hi i have a scenario, by mistake user has forget to check the option replace the return goods but has selected invoice expected for return goods and posted a return with credit document, but user needs to replace the goods, now how to receive the replaced goods

    1. Hi Arun,
      Is your vendor balance is affected? I will recommend to do Inventory Adjustment -Negative & positive with replace item.
      Let me know how it goes.
      Thanks Much
      Sandip Jadhav