Return Material Authorization is a feature that is used to enter and authorize a customer's request to return previously delivered parts, with or without a known customer order number. The Return Material Authorization feature also enables to credit the customer with or without an associated debit invoice. Returns from a customer occur for a variety of reasons including damage, shipment error, or sampling. The Return Material Authorization process enables you to manage the expectations of customers while controlling inventory receipts and customer credit processing. It can also generate a return note, which could be sent to the customer as a confirmation of the return agreement, and used by the warehouse personnel for knowing what to expect in return from the customer.
Return material authorization is further used to keep track of all the events concerning returning of parts. Besides the originally debited amount for the returned part, or any other agreed amount, it is also possible to credit charges related to the return. These charges can be connected to any return material authorization line or any order charge line.
When the material has been directly delivered by an external supplier, the RMA can be used to register the direct return to the external supplier. The RMA can be used to facilitate direct returns to another site if the material has been previously directly delivered by that site, provided that both sites are registered in the same database.
Within this about description, Return Material Authorization will be referred to by the abbreviation RMA. The term Approver or Authorizer is also referred to as the Coordinator in this about description. The Coordinator therefore, plays the role of approving or authorizing any assigned customer return.
Handling of RMA is a supporting process to customer relationship management in all companies. An RMA entered in IFS/Customer Orders will assist you in keeping track of all customer returns.
Where service levels play an important part in any company in any industry, the RMA process gives you the opportunity to analyze your current service levels and how they could be further improved.
Before you can use return material authorization, you must have entered some basic data.
The people who are allowed to act as an Authorizer or Approver for customer returns, must have been entered as a Coordinator initially. To each customer return entered, a coordinator will be assigned. It will therefore be the coordinator's responsibility to either approve, deny or cancel the customer's return request.
Example of Coordinators
| Coordinator ID | Name | Phone | Coordinator Group |
| DaCo | David Coulthard | 2647851 | Supply |
| JeAl | Jean Alesi | 5478363 | Supply |
| NiMa | Nigel Mansell | 5347512 | Manufacturing |
In addition to Coordinators, the return material reasons must have been entered as well. You can enter return reasons in the form of codes defined specifically by you, for which you could later connect to any RMA entry.
Example of Return Material Reasons
| Return Reason | Reason Description | Inspection Info. |
| 10 | Packaging damaged during transport | Check for product damage. If none, repack and reship. |
| 20 | Return of samples | Check if samples are OK for resale. If yes, then restock. |
| 30 | Delivered wrong part | Validate part number. If wrong, repack and reship. |
In the event of needing to scrap returned parts due to damage or some other reason at the point of receiving returns, it is necessary to also have the scrapping causes maintained in advance.
Example of Scrapping Causes
| Scrap Cause ID | Scrapping Cause Description |
| 10 | Transport damage |
| 15 | Cosmetic deficiency |
| 20 | Damaged in the warehouse |
On receiving a customer's request to return previously delivered parts, the request must be registered in the form of an RMA entry. The RMA is built in two levels comprising of an RMA header and one or several RMA lines. The first step in a new entry is to enter the RMA header. When valid data has been entered for the header and saved, it assumes the Planned status. The second step in a new entry is to enter the lines. When a RMA line is entered, it also assumes the Planned status. At this point, the status of the RMA header does not change and still remains as Planned. The status will always show you the current status of the RMA line. The possible values for the status include: Planned, Released, Partially Received, Received, Completed, and Denied. Thus, an RMA process cycle will result in a change of the status.
In an RMA line, you can specify the relevant parts comprising of both inventory and non-inventory parts, and their quantities that the customer requests to return. At this point, you can also specify the reason for return and the relevant customer order number and debit invoice associated with the return. Specifying the customer order and debit invoice is not a must. If the debit invoice number is specified for an RMA line, and the quantity to return is not manually specified, then the value fetched in the Qty to Return field would be the quantity specified in the invoice. However, this amount can be manually changed if required, up to a maximum value of the total quantity of the customer order line. You should also note that associating an order number and debit invoice will have an effect on price retrieval for the RMA, as follows:
Note: If the RMA line is connected to an order, and for some reason you have made changes to the debit invoice, this price adjustment will be lost and the original price from the order will be taken. As a result, the credit invoice will not show the same amount as the debit invoice.
Similar to that stated for pricing, the retrieval of tax codes for an RMA will vary depending on the connection of an order and debit invoice for which the following will apply:
Note: If the price is changed in the preliminary debit invoice or in the RMA line, the taxes will change according to the percentage of the price. You should also note, if changes are made to the tax information in the debit invoice and the RMA is connected to an order, these changes will be lost when crediting the RMA line.
You can also enter charges on the Return Material Authorization/Credit Charges tab for which you may want to credit the customer, as well as specify on the Return Material Authorization/Return Handling Address tab a different customer to whom you want to send the credit invoice. The customer specified here must differ from the original customer, e.g., when the returned parts were sold to a customer with a different invoice customer.
At the RMA entry point, you can also enter notes and document text, which are entered for two different reasons. While you can use notes as a means of passing information and making personal notes and comments for internal purposes, document text is entered only if you require them to appear on your credit invoice to the customer.
If you have been associated to the entered RMA as a coordinator, you will have the authority to either release, deny or cancel the return request having a Planned status. In the event of choosing the latter, the RMA process will not continue and will be considered closed or final.
However, if you choose to release the RMA, you confirm to accept the customer's request to return parts. On releasing an RMA, you can print the return note, receive the returns, and create the credit invoice as well. It is possible to release all RMA lines or specific lines only. The RMA header status will however change to the Release status, even though only specific lines were released and not all the lines.
Once the RMA is released you can proceed to print the return note if required, as well as approve the customer for credit. By approving the customer for credit, a credit invoice must be produced and sent to the customer on actual receipt of the returned parts.
When receiving parts that are returned by the customers, you should either to scrap the returned parts, or return the parts back to the inventory stock.
Prior to receiving returns into inventory stock locations, the returned parts must be sorted to decide whether they should be scrapped or returned back to inventory stock for re-use. For example, in the event of encountering damaged returns that cannot be put back to inventory stock for reuse, you can choose to scrap the returns instead.
On the subject of returning package parts, you should note that the return is made for each component in the package, and not for the package as a whole. The price for a component is always retrieved from the order, regardless whether the RMA is connected to an order or debit invoice. In the event of returning a component on an RMA without an order connection, the price will be zero by default and you have to manually enter an applicable price. This means, if the price for the complete package is higher or lower than the total price of the components, the total price for the RMA lines will not match the package price.
On receiving returns with no defects into inventory stock locations, the status on the RMA line automatically acquires the Return Completed or Partially Received status, depending on whether all or only specific parts were received. If more than one inventory location is available for the returned part, you can select whether you want to return the current part to a specific inventory location or to several different inventory locations.
When all the parts on a return material authorization line with non-inventory parts have been received, the line will automatically acquire the Return Completed status. This means that non-inventory parts do not need to be handled.
A shortage occurs when the quantity on hand is not enough to meet the quantity required for a reservation. When parts in short supply are returned to inventory stock through an RMA, a message is displayed indicating that there is a need for that part. This message however will only appear if you have the following maintained.
As a result of the above settings, you can either distribute the newly arrived parts to inventory stock— between the different orders with shortages for these parts—or choose not to do so. When shortages have been duly managed, an order will continue in the normal work flow prescribed in the respective order type.
In the event of scrapping returned parts that cannot be returned back to inventory stock, a scrapping cause must be indicated. Scrapping causes allow you to analyze the reasons why parts have been scrapped. For example, you may determine that there has been significant loss because of the parts that were damaged during transport. This enables you to correct such problems and thus avoid further financial loss. In the case of scrapped parts, it is also possible to generate a credit invoice to the customer based on the associated RMA.
To complete an RMA process cycle, you will need to pass through the stages of entry, approval, and receiving or scrapping. After receiving all returned parts to inventory stock, or deciding to scrap the parts instead, the RMA will automatically assume the Completed status.
You can finally credit the customer for the returns. If the entered RMA indicated an approval for credit, you can generate the relevant credit invoice for the customer. The credit invoice can be created and printed even before the receipt of the returned goods. It is up to each company to decide on the business flow.
The RMA does not handle discounts, which means the net price is retrieved if a discount has been given. In such cases, no contra account will be created for the discount on the credit invoice to balance the discount account on the debit invoice. For a company that has set up its posting control to follow up on the given credits to the customer, it will look as if more discounts have been given if credit invoices have been made for debit invoices with discounts. As for the generated credit invoice, it must be printed so that you could forward it to the customer.
If the material has been directly delivered by an external supplier, then the RMA coordinator at the site may need their customer to return material directly to the supplier. In that case, you should specify the supplier that should receive the returned material. Each RMA line should be connected to a customer order line which has been directly delivered by the supplier specified as the Return to Supplier in the RMA header.
When the return has taken place, you can register direct returns to the supplier. This will also lead to the creation of a return record in the respective purchase order receipt that was created while registering the direct delivery. This purchase order return is considered as a return for credit.
If the material has been directly delivered by an internal supplier, then the RMA coordinator at the demand site may need their customer to return material directly to the internal supplier. (i.e. supply site). This is achieved in IFS Applications using two RMAs. The first RMA, also called the originating RMA, should be created in the demand site. The demand site is the site contacted by the customer for the original delivery and is the site that creates invoices for the external customer. Therefore, the coordinator should decide at the demand site whether the external customer should directly return material to the internal supplier. If the material should be directly returned to the internal supplier, then the supply site should be specified as the return to site in the originating RMA. Each RMA line should be connected to a customer order line that has been directly delivered by the site specified as the return to site.
When releasing the RMA in the demand site, the second RMA, also called the receipt RMA, is created automatically in the supply site. Material can then be received to the supply site via the receipt RMA (Note that the originating RMA cannot receive returned material). When the receipt RMA receives the returned material, the originating RMA also receives the Partially Received, Received and Return Completed status respectively. The received return material can either be returned back to the inventory or scrapped via the receipt RMA. The returned inventory quantity and scrapped inventory quantity will be updated in the receipt RMA lines and the respective originating RMA line in the demand site. This will also lead to the creation of a return record in the respective purchase order receipt that was created while registering the direct delivery. This purchase order return is considered as a return for credit.
The credit/correction invoice for the external customer is created in the demand site using the originating RMA. The credit/correction invoice for the internal customer is created in the supply site using the receipt RMA, if the two sites belong to two companies.
It is possible to return material to a different site in the same company even though that site has not been involved in the delivery of the material. You should first create an RMA in the sales site and specify the return to site in the RMA header. All RMA lines should be connected to a customer order line whenever the return site is different to the RMA site. When releasing that RMA, a second RMA also called the receipt RMA will be automatically created at the return site. The first RMA, also called the originating RMA will include information about the receipt RMA and vice versa. The RMA line in the originating RMA will include the RMA line number of the respective receipt RMA and vice versa.
When material is received via the receipt RMA, the originating RMA gets the same status as the receipt RMA.