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Anonymous Controller

Accounting Treatment of RMAs when it is a product swap ....

Asked on Nov. 17, 2014

We have a high volume of RMAs due to either product not working and/or customer wanting to swap it for a different product. If this was simply an RMA, then there would be a credit memo and a reduction of HW sales, however, how do folks handle when the inventory items are simply swapped (i.e, customer sends us a tablet and we issue them another). Trying to put in a policy to deal with this from an accounting and a controls perspective. Thank you.

Answers

Len Green Performance Improvement Consultant and ERP Strategist • January 21, 2015

Hi Anon
There is a recent thread on this which may help: See
https://www.proformative.com/questions/how-account-rmas

If you'd like to go through "T-accounting" scenarios for your needs, I'm happy to chat with you offline.

Wayne Spivak President & CFO • January 21, 2015

It comes down to two issues:

1. Is the item returned available for sale
2. Was their costs incurred in receiving the item (return paid postage, re-shipping postage, re-condition/packaging charges, etc.).

Each needs to be recorded appropriately.

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