Return to Supplier (RTS)

 

The Return to Supplier (RTS) module is used to return faulty, damaged, incorrect, or unwanted goods to a supplier, either partially or in full.

 

When an RTS is processed, Smart-IT automatically:

 

•Debits the supplier's account

•Removes the returned items from stock

•Records the return against the supplier's account history

 

Key Features:

•Create an RTS directly from an existing Goods Received Note (GRN). (Recommended)

•Create an RTS manually.

•Process full or partial returns.

•Record courier details, waybill numbers and courier costs.

•Track goods sent to suppliers for repair, replacement, or credit.

•Generate a return letter without affecting stock.

•Manage serial-numbered items, including replacements and exchanges.

•Use a Pending RTS Warehouse to temporarily move stock while awaiting approval or collection.

 

Creating a Return to Supplier (RTS)

There are two ways to create an RTS.

Option 1: Create an RTS from a GRN (Recommended)

 

Go to Stock Items > GRN Lookup.

 

1. Locate the relevant GRN.

2. Right-click on the GRN.

3. Select RTS Items from this GRN.

 

Smart-IT will create a new RTS containing the items and costs from the selected GRN.

You can then adjust the quantities to reflect the goods being returned.

 

Option 2: Create an RTS Manually

 

Go to: Stock Items > New RTS

Use this option when you need to create a return without linking it to an existing GRN.

Enter the required supplier and stock information manually.

 

The Return To Supplier form will open.

 

Important: Stock Availability

Smart-IT does not normally allow you to return more stock than is currently available on hand.

If you need to process an RTS that will result in negative stock quantities, enable the following option:

 

Go to: Stock Items > Stock Options - Enable Allow Negative Stock.

 

Steps to Process a Return to Supplier (RTS)

 

1. Enter the RTS Information

Courier Details

If the goods are being sent back to the supplier using a courier, enter the following information:

 

•Courier: Select the courier from the dropdown list.

•Courier Cost: Enter the courier charge.

•Waybill Number: Enter the courier's waybill or tracking number.

 

The default expense account used for courier cost can be configured under: Ledger Options > Account Defaults > RTS Expense

 

When courier costs are entered, Smart-IT creates the following journal entry:

•Debit: Courier Costs (expense account). Reason: The courier charge is an expense to you.

•Credit: Supplier Control Account. Reason: You owe the courier company.

 

Quantity

Enter the quantity being returned in the Qty column.

Removing unwanted lines

Lines with a zero quantity must be removed before processing the RTS.

1. Right-click on the row selector.

2. Select Delete all Qty = 0 lines.

 

Tip: Any line with a quantity of zero will prevent the RTS from being processed and will generate a Quantity 0/Zero error message.

 

Document Imaging – Attach the Original Supplier Invoice

You can attach the original supplier invoice to the RTS using the Doc Image button on the menu bar.

When you email the RTS to the supplier using the Email button, the attached document will automatically be included with the email.

 

Tip: Many suppliers require a copy of the original supplier invoice when goods are returned. Attaching it to the RTS saves time and ensures that the supporting documentation is readily available.

 

 

2. Process the RTS:

Click: Process (Send to Supplier)

Smart-IT

•Create a debit transaction on the supplier’s account.

•Remove the returned items from stock.

•Mark the RTS as Sent to Supplier.

•Automatically tick the Send to Supplier checkbox.

•Disable the Process button to prevent duplicate processing.

Important: Once processed, the RTS updates both the stock quantities and the supplier's account.

 

3. Save Without Processing

Click: Save

This stores the RTS without updating stock or supplier balances.

Use this option when the RTS needs to be completed or reviewed later.

 

Reversing an RTS

A processed RTS can be reversed if you need to correct or amend it.

Steps to reverse a processed RTS:

1. Go to: Stock Items > RTS Lookup.

2. Locate the RTS you want to reverse.

3. Right-click on the RTS and select Open RTS.

4. Click the Extra button on the menu bar and select Reverse.

 

Once reversed, the RTS can be changed or deleted.

 

Important – Security Recommendation

 

Reversing a processed RTS affects the integrity of your stock and accounting records. Access to this function should therefore be restricted to authorised employees.

 

To prevent users from reversing an RTS: Go to: Security > Disable Allow Reverse.

 

Additional RTS Options

The RTS form provides additional options that determine how the return is handled.

Letter Alone

 

The Letter Alone option allows you to generate a return letter without processing a stock or financial transaction.

 

Use this option when you need to send goods to a supplier but the goods do not belong to your company's inventory.

 

 

Typical examples include:

 

•Returning a customer's item under warranty.

•Sending an item for inspection.

•Sending customer-owned goods away for repairs or replacement.

 

 

 

When using Letter Alone:

 

•No stock quantities are adjusted.

•No supplier debit transaction is created.

•You can still record courier and waybill details.

•You can generate and email the supporting return documentation.

 

Goods Received Back

Select Goods Received Back when goods are returned to you by the supplier following a repair, replacement, exchange or warranty claim.

This option records that the goods have been received back from the supplier.

 

Send to Supplier

The Send to Supplier checkbox is automatically selected when the RTS is processed.

It indicates that the goods have been dispatched to the supplier.

 

Warranty Repairs and Customer-Owned Goods

When a customer returns an item under warranty, the item often does not form part of your inventory.

In these situations, use:

Letter Alone

 

This allows you to:

 

✔ Track the return to the supplier.

✔ Record courier and waybill information.

✔ Generate supporting documentation.

✔ Avoid affecting stock quantities and stock values.

 

This method is ideal for customer-owned goods that are being sent away for repair or replacement under warranty.

 

Additional Features

Extra Tab

The Extra tab allows you to store additional information relating to the return.

•GRN Number

•Job Number

•Repair Reference

•Supplier Reference Number

•Sending Warehouse

These references make it easier to trace the return and link it to the original transaction or repair process.

 

Serial Number Tracking

Smart-IT supports serial number tracking when processing returns to suppliers.

This allows you to track:

 

•The serial numbers of returned items.

•Replacement serial numbers received from the supplier.

•Serial number swap transactions.

 

This is particularly useful when faulty equipment is exchanged for replacement units.

For more information, refer to Serial Number Tracking..

 

 

Pending RTS Warehouse

The Pending RTS Warehouse feature allows inventory to be moved temporarily to a holding warehouse before an RTS is processed.

 

This is useful when goods:

•Were delivered incorrectly.

•Need supplier approval before return.

•Are awaiting inspection.

•Are being exchanged.

 

1. Enable the Pending RTS Feature

Go to: Stock Items > Stock Options > RTS form

Configure the following options:

1.Enable the Pending Button option.

2.Select a Default RTS Pending Warehouse.

 

If you need to create a separate warehouse for pending returns:, go to: Stock Items > Extra > Warehouses

 

2. Move Stock to the Pending RTS Warehouse

•Go to: Stock Items > New RTS  Enter the RTS details.

•Click: Pending > Move to Pending RTS Warehouse.

 

3. Return Stock from Pending RTS Warehouse

 

When the goods are received back, select Return from Pending RTS Warehouse.

The inventory will be moved back to its original warehouse location.

This feature ensures better tracking of temporarily removed inventory without affecting financial records.

 

Which RTS Method Should I Use?

 

Use a Standard RTS when:

✔ Stock must be removed from inventory.

✔ The supplier will issue a credit, replacement, or repair.

✔ The supplier account must be adjusted.

 

Use Letter Alone when:

✔ Returning a customer's warranty item.

✔ No stock adjustment is required.

✔ No supplier debit transaction should be created.

 

Use Pending RTS Warehouse when:

✔ Goods need to be isolated temporarily.

✔ The return has not yet been approved.

✔ Inventory should not yet be removed permanently from stock.

 

See also: Warehousing