Open return orders in sd module

Question

hi all,
can any one explain me wht are open return orders in sd module and also credit memo issued for opem return order and goods receipt processed against the delivery.
if possible can u explain me with example.
                                     thanks

Answer 1

Hi Dilip,
1. Return orders are created with reference to sales orders which have been rejected due to some reasons. There are many reasons as to why a sales order is rejected like incorrect deliveries, Damages during transits, Delayed deliveries,etc. Before the finance department processes them these return orders are blocked by applying a billing block. Such documents which havent been cleared by the finance department are called Open Return Orders.
A credit memo is released by the vendor based upon pre sales agreements since the customer has to be paid for the return orders.
Ex:
Lets assume there is a textile company. They have three Plants producing Textiles at three different locations (A, B and C). They get raw material like dyes, buttons and zips from third party supplier. An agreement was made with the supplier to send a consignment of 100 Litres of Dye and 10 Cartons of buttons to Plant B. A sales order (SD01) was created based on this consignment. But the Dye reaches plant C instead of Plant B. So a return order is created for the sales order (SD01) and a billing block is applied to it. Then the return order is considered to be open for review. Once the finance guys validate the document and approve it the order is closed and released.
Once that is received by the Vendor he issues a credit memo to the Textiles company since he has to cover for the wrong deliveries and loss of production hours.
I hope your doubt is cleared, Reward if helpful.