Consignment is a sales method in which products are not initially sold to the end consumer. After the goods are used and paid for by the client, ownership of the products at the customer's location is transferred from the provider to the consumer. If a customer which has received consignment goods from the vendor is not satisfied with them, then the customer sends the goods back to the vendor.
The procedure of accepting returns for the products that were initially billed to the customer using document type KE (Consignment Issue) is known as consignment returns. You use the transaction code VA01 to make a consignment returns order. Document type KR is accessible for consignment pickup in standard SAP. The arriving stock is actually a customer return rather than a pickup of your own inventory from a consignment location. An accounting record for a cost of goods sold (COGS) reversal is passed when you perform the PGR for a delivery for a consignment returns order. In order to record the sales returns entry into the accounting, a credit note is created with reference to the delivery document.
Consignment Return Flow Steps
- Create Consignment Return Order (Tcode VA01)
- Create Return Delivery (Tcode VL01N)
- Remove the Billing Block from the Consignment Return Order (VA02)
- Create Credit Memo (Tcode VF01)
- Create Consignment Return Order (Tcode VA01)
Step 1: Enter T-code VA01 in command field. Choose order type KR(Consignment Returns)and enter Sales area data in Organizational Data block. To create with reference go to More ➢ Sales Document ➢ Create with Reference.
Figure 1 Consignment Returns Order Creation: Initial Screen
Step 2: Most of the data will be copied. Enter Order reason and returned quantity and save it.
Figure 2 Consignment Returns Order Creation: Overview
- Create Return Delivery (Tcode VL01N)
Step 1: Enter T-code VL01N in the command field. Enter the shipping point and the consignment return order number.
Figure 3 Delivery Creation for Consignment Returns: Initial Screen
Step 2: The data will be copied into the delivery.
Figure 4 Delivery Creation for Consignment Returns: Overview
- Remove the Billing Block from the Consignment Return Order (VA02)
Step 1: Enter T-code VA02 in command field, in the field Billing Block change the value to blank and save it.
Figure 5 Consignment Return Order – Remove Billing Block.
- Create Credit for Returns (Tcode VF01)
Step 1: Enter T-code VF01 in command field and enter Return Delivery number.
Figure 6 Create Billing Document: Initial Screen
Step 2: Check the data and save the billing document.
Figure 7 Consignment Credit for Returns Creation: Overview
Figure 8 Consignment Credit for Returns Creation: Item Data
The Document flow of Consignment Return Order is shown below:
Figure 9Document Flow – Consignment Return
Customer consignment stock will be reduced, to check it go to transaction MMBE and enter the material number.
Figure 10 Stock Overview - Consignment Process
