Purchase Return

How to | See Also | Summary

Purchases returns, or returns outwards, are a normal part of business. Goods may be returned to supplier if they carry defects or if they are not according to the specifications of the buyer. If purchase was initially made on credit, the payable recognized must be reversed by the amount of purchases returned. If the purchases in respect of the goods returned were made for cash, then a receivable must be recognized to acknowledge the asset resulting from the expected reimbursement to be received from the supplier in respect of the returned goods.

The Buyer can issue two type of documents in order to return the purchase goods, which include:

1. Debit Note:
In accounts there were many instances when buyer have to issue a debit note to their suppliers. When buyer issue debit note to supplier then the supplier have to credit the account of issuer of the note and debit the related expenses /item account.
2. Rate Difference Debit Note:
Suppose you have purchased an item at a rate of Rs.100 however by mistake your supplier had billed you at a rate of Rs.120, then you can issue the debit note for balance of Rs. 20 as rate difference. In such a case, Supplier have to debit respective purchase as narrated in the debit note and credit the buyer account.

Now,Supplier also have several options for compensating the buyer for any returned goods, which include:

1. A credit against future purchases
2. A credit memo that the buyer can apply against its next payment to the seller
3. An outright cash payment to the buyer

• Create new Purchase Return
• Create new Purchase Order
• Create new Purchase Invoice

See Also: Purchase Order | Purchase Invoice