Allowing Customers to Field Scrap

SOLVED

What is the most efficient way you have found to process a field scrap?  There are instances when it is not cost effective to have a customer return a damaged item so we allow them to keep the item (field scrap it).  Right now we create an RMA to issue the customer a refund and then we issue the item out of inventory to our scrap expense account.  But is there a better way to do this?  I know there is a scrap option in the RMA module but this puts the scrap item to a balance sheet account (since we also have scrapped items physically here) and we don't want a field scrap to hit the balance sheet.  We would like to try to avoid the item going back into our inventory.  Would the best way to handle this be to simply issue a credit memo to the customer without using the part number and instead just hitting the scrap expense account?

  • 0
    Go into RMA options and fix the g/l account for the scrap account to be an expense account.
  • 0 in reply to TomTarget
    This would work if we didn't have scrap that was physically being returned to us. When customers return items to us and then upon inspection we see that's not repairable we scrap the item and we need the balance sheet account to be the default account for the RMA in these instances. So we really need two different processes. One for a field scrap (to an expense account) and one for a plant scrap (balance sheet). Thank you!
  • 0 in reply to Sue F.
    So you really don't know if it is scrap until it is returned? Why not return to inventory in a separate warehouse. Once you get it back in house and determine that it is truly scrap then adjust it out of inventory. Otherwise if it is useable it is already in inventory. You then just move it to the "for sale" warehouse.
  • 0 in reply to TomTarget
    I'm sorry that I'm not being clear on the issue. I am trying to get suggestions for field scraps - which is when we do not require the customer to physically return the part because it is not cost effective to do so. For example, we sold a customer a part for $10 and and they are unhappy with the product or the product is defective. Instead of paying $7 to have a $10 item shipped back to us we allow the customer to keep the item (or toss it or whatever) and then we just send a new one. So my boss wants to create RMA's for the items even though an item isn't actually coming back and we want our scrap account to get expense but we do not want any inventory counts to increase. My guess assumption is that it's not possible because an RMA assumes that a product is physically being returned.

    As a note of clarification - we also do regular RMA's and put those items into a separate warehouse and after an inspection we either put those items into the for sale warehouse or we move it to the scrap warehouse. However, I'm just looking for suggestions in processing field scraps.
  • 0 in reply to Sue F.

    Apologies. You just corrected a misconception I had about the scrap action.

    Thinking out loud.

    So if the customer is not going to return the item then why enter an RMA at all as this isn't truly a return in the physical sense. Why not just create a sales order to effect the shipment of the replacement?

    The RMA module was really created so that you could create a sales order for shipping and a track the physical return of goods and maybe even a purchase order simultaneously. In this case you are really just creating a sales order with no price being charged.

  • 0 in reply to TomTarget
    verified answer

    ...and to extend Tom's thought, you could skip the RMA, then invoice the replacement with a negative /M line pushing the cost of the replacement to your field scrap GL account, netting out the invoice to zero.

  • 0 in reply to TomTarget
    You make a great point. Since there is no part coming back then an RMA isn't appropriate.
  • 0 in reply to Kevin M
    That's a great idea. I just talked to my boss and this is exactly what we will be doing going forward. Thank you!