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Sending replacement product without appearing to be selling more units

  • 1.  Sending replacement product without appearing to be selling more units

    Posted 4 days ago
    Edited by Tonia Freeman 3 days ago
    Maybe a better question...

    If we are sending replacement product to a customer who is going to keep the original product that is being replaced, what is the best way to do that? $0 amount on the invoice? Do a return/damages trx on the original product off setting the cost of the replacement units and if so, what do I do with the balance then sitting in damages?

    All thoughts are welcome and appreciated.
    Thanks,
    Tonia





    Good morning,

    We are a manufacturing company and in Jan we sent one of our Distributors x amount of bottles of product. Since then, the bottles have changed and we are sending them, free of charge, bottles to replace their existing inventory of the old version. We won't be charging for this product and they won't be sending the old bottles back to us. in addition to invoicing for the bottles at a $0 amount, how can I show the bottle leaving inventory but not as a unit sold?

    We are asked weekly to report units sold b product. To get that info, I created a smartlist that pulls units sold during the period. Those replacement bottles will be on that smartlist and I am concerned someone will forget to remove them before reporting.

    Any suggestions?
    thanks in advance,
    Tonia

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    Tonia Freeman
    Seven Oaks Ranch
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    Conference-GPUG_200x200


  • 2.  RE: Sending replacement product without appearing to be selling more units

    Posted 3 days ago
    Tonia,

    Yes, a $0 charge Sales Order is probably the most proper way to send the item to your distributor.  Though you are correct that the units will show up on any unit-based sales reports, unless manually removed by the individual creating the report.  Is your report a smartlist?  Maybe modify it to exclude sales line items with $0 extended price?

    Since you are receiving no item back, there would be no return transaction, and so no balance that you would need to reclass or post.  Note that a no charge sale will still have cost of goods sold, so your COGS% when compared to sales may be higher this month compared to other months.

    Regards,


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    Mark Verbeek
    Controller
    Carstens
    Harwood Heights IL
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    Conference-GPUG_200x200


  • 3.  RE: Sending replacement product without appearing to be selling more units

    Posted 3 days ago
    Why not remove the inventory via an inventory transaction rather than a sales transaction?  It can then be expensed as customer samples or something similar instead of COGS, and it won't appear on any sales reports.

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    Patti Lattray
    Handi-Craft
    Saint Louis
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    Conference-GPUG_200x200


  • 4.  RE: Sending replacement product without appearing to be selling more units

    Posted 3 days ago
    Thank you Patti and Mark,

    I agree with both of you, the only problem with the inventory transaction is we loose visibility on where it went unless I can find a way to link it to the customer. All of our products are lot coded. I really appreciate both of your suggestions, grateful I can run this stuff by people who get it.

    Happy Friday eve!

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    Tonia Freeman
    Seven Oaks Ranch
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    Conference-GPUG_200x200


  • 5.  RE: Sending replacement product without appearing to be selling more units

    TOP CONTRIBUTOR
    Posted 2 days ago
    Just an idea - You could set up specific sales document type for the invoice.  If you use orders, and flip them to an invoice you will need 1 of those too for the order, so the transfer of specific order type goes to the correct invoice type.  This is done in the Sales Order Processing Setup - Sales Document Setup.
    Then when you run the smartlist, don't include that document type.  Nice thing is, you can then also run a smartlist just on that document type of know exactly what you're sending out the door for replacements.  The hard part is to have users remember to choose the right type when entering the transaction.

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    Pat Kleser
    Hastings Air-Energy Control
    New Berlin WI
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    Conference-GPUG_200x200


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