Zoho Inventory

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RMA or Sales Return

A Return Material Authorization (RMA) or Sales Return is the process of a seller accepting a purchased item back from the consumer. In turn, the customer receives credit, cash refund or a replacement. Some of the common reasons for return include receiving damaged/expired products, wrong delivery, fraudulent orders etc.


Workflow of a Sales Return

The various stages of processing a sales return in Zoho Inventory.

Sales Return workflow


Qualify Items for Return

Before you begin with sales return, your inventory items must be eligible for return. A sales return can only be initiated for items that you qualify as returnable.

Insight: Service items and items with only purchase information cannot be returned.

Insight: If the switch is not turned on, the item will be considered non-returnable and you won’t be able to raise a sales return for it.

Marking an item returnable

Bulk Action

You can also mark your existing items as returnable in one go. To do so:

Marking items returnable in bulk


Create Sales Return

Scenario: Let us consider a most common business scenario where you initiate a sale, ship the products and get paid for it. After receiving the product, the customer returns it due to unforeseen reasons. To handle this in Zoho Inventory:

1. Create a Sales Return

Insight: You cannot create sales returns for orders that are drop shipped or manually fulfilled.

Sales Return menu

Insight: The quantity specified in the Credit-Only field will not be taken into stock.

Sales Return new page

2. Receive Items in the Sales Return

A sales return is raised only as a proof of items being returned. The stock(physical stock) of the returned item increases only when you receive it in your warehouse. To record a receive:

Receiving items in the sales return

Serial/batch tracking

Insight: To enable tracking in packages, purchase receives and sales return receipts, go to Settings > Preferences > Items. Under Advanced Inventory Tracking, choose Track in packages, purchase receives and return receipts option.

Insight: If you have specified credit-only goods in the sales return, you will not be able to receive it as it will not be taken into stock.

3. Create Credit Note

To provide a refund or credit for the returned items, you have to create a credit note. Creating a credit note will also increase the accounting stock of the underlying items.

To create a credit note:

Create credit note menu

Insight: Learn how you can handle the return of batch tracked or serial number tracked items here.

4. Record a Refund or Apply Credits to Invoices

A sales return process is not usually complete without a refund. To record a refund:

Refund menu

If the customer is a regular buyer, then instead of giving cash refunds you can provide credits. These credits can be applied to their pending or future invoices.

To apply credits to invoices:

Applying credits to invoices

Insight: A credit note created for a customer can only be applied to the invoices created for the same customer.

To learn how you can handle more of such cases of sales return in Zoho Inventory, visit our FAQ section.


Import Credit Notes

If you already have a list of credits for your customers, you can import them into Zoho Inventory in CSV, TSV or XLS format.

To know the format of the import, i.e. the columns and data to be included in the import file, you can download the sample import file which we’ll be looking at in the steps below.

  1. Click the Returns dropdown on the left sidebar and go to the Credit Notes module.
  2. Click the Menu icon icon.
  3. Click the Import Credit Notes option.

    Import credits menu
  4. Click the Choose File button to browse and upload your import file. You can download the sample CSV or XLS file for your reference.

  5. If you want to auto-generate the credit note numbers, select the Auto-generate Credit Note Number option.

  6. Click Next to proceed to the field mapping page.

    Import credits - upload file
  7. Map the columns in Zoho Inventory with the appropriate column in your import file.

  8. Click Next to proceed to the preview section.

    Import credits - map fields
  9. Preview the summary of the records that can be imported.

  10. Click Import if you’re ready, or else, click Previous if you need to make any changes.


Export Credit Notes

To download the credit note details to your system:

  1. Click the Returns dropdown on the left sidebar and go to the Credit Notes module.
  2. Click the Menu icon icon.
  3. Click the Export Credit Notes option.

    Export credits menu
  4. If you want to only export credits from a specific period, select the period.

  5. Select an export template (optional). Learn how you can create an export template.

  6. Choose the export format.

  7. Enter a password to protect your file (optional).

  8. Click Export.

    Export credits

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