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Returning Items under Warranty

Last Updated on November 19, 2022 by maximosecrets

I was asked the other day what the process would be if I wanted to return a purchased item that was still under warranty. My answer was it depends on how long ago you made the receipt and whether it had been invoiced, but the actual process of return should be the same. Later I thought, I should have said that it might be a bit different if it was a rotating item versus a non-rotating item, as you would need to treat the asset being returned. Then, I thought, what happens when you receive a replacement item or asset and are you sure you can return an item after receipts have been completed, yes of course, don’t doubt yourself, yes but are you sure Andrew!

So, this article is all about returning items that have been received, items that are assumed to be under warranty. It will assume that the item has not been rejected as part of the receipt inspection process, it had got past that point and the serialization of assets. The article will not be looking at Warranty Contracts, just a regular item that has been purchased.

There will be six parts to examine in this article:

We need an example for both a non-rotating item and a rotating item. As we have just sent back my wife’s Christmas present of a new Apple iPhone 12 Pro, lovely colour, great pictures, but microphone did not work when using Facetime or WhatsApp, I’ll use that as an example of a rotating item. I’ll use Apple AirPods Pro as an example for a non-rotating item. As there are 6 scenarios, I’ll need to raise a PO with two lines and a quantity of 3 each.

Summary

When there are items to return under warranty, we use the Receiving application and for non-rotating items we use the button Select Items for Return and for rotating items we use the button Select Rotating Assets for Return. Before you save the record (it would be read-only after save), you should enter a Remarks and a Reject Code, perhaps:

There will probably be other reject codes, think of using this field as a Reject/Return Reason code. An ALN domain should be configured to support the values used for rejection as part of receipt inspections or return reasons. You could use conditions on the domain value to create two different lists of values depending on the MATRECTRANS Issue Type value of RECEIPT or RETURN. It is also a good idea to configure that the Remarks and Reject Code fields are mandatory when the transaction type is RETURN.

For items that have been returned where you do not expect a replacement then a credit note should be raised in the Invoices application, a record of type CREDIT. This should be tied to the Invoice using the Original Invoice field. You should not approve this record until the credit note has been received from the supplier so that you can enter the details from the document they have sent you, Vendor Invoice and Invoice Date fields should at least be entered. 

If no replacement is required, then as you are now expecting a reduction in quantity to satisfy the whole purchase order you should think about revising the PO. If you do not do this then the Receipts Status will be set as PARTIAL instead of COMPLETE. If you are not expecting any more receipts for a PO then it is best if the receipt status indicates COMPLETE, and so a revision of the PO would be considered good practise.

There isn’t anything in Maximo which ties the Receipt transaction to the Return transaction, only that they are referenced by the same PO Number, PO Line Number and Item Number. The transactions in the Material Receipts tab of the Receiving application are ordered by PO Line Number. To understand what has happened over time, then filter by the PO Line number and sort by Actual Date. 

For a return to vendor of a rotating asset then the asset must be moved to the original receiving location, the location on the PO line, and not the HOLDING location used in the receipt process. But you may still not be able to locate the asset when you use the Select Rotating Assets for Return button. There is an Organizations setting in PO Options titled “Do not allow assets to be returned to vendor if transactions are posted?” which if set will not allow an asset to be returned if it has been moved from its original receiving location. There is currently little documentation other than the field help to explain what this field is actually doing, and I will write a separate article on this after I have done some further testing. With this article already exceeding 20 pages, it would be too much to have added the results of those tests to this article as well.

When an asset is returned then the asset moves to a DECOMMISSIONED status and the field “Returned To Vendor?” is set. If there is a replacement for the asset then you cannot reuse the previous asset number, you must create a new one.

This article has only been looking at Issue on Receipt purchase order lines. It is expected that purchase orders made against a storeroom will follow a similar process, except there is likely to be different validations involved in determining when a rotating item can be returned based on the Organization setting “Do not allow assets to be returned to vendor if transactions are posted?”. So, I will cover those differences in that article.

Preparing the Data

In Company Master application I’ve created a company APPLE – Apple Inc with currency USD. I’ve then used the action Add Company Master to Organization and selected Organization EAGLENA.

In Companies application I’ve checked the APPLE company and added a company type of V – Vendor.

In Item Master application I have created new items for:

For both items I have used action Change Status and set status to ACTIVE, with Roll New Status to Organizations and Inventory = 1. Then used action Item/Organization Details to check ACTIVE state at organization level.

I do not intend to add either item to a storeroom, they will be purchased on demand.

In Purchase Orders application I’ve created a new PO 1100 – Apple Products for A.Jeffery, with Vendor = APPLE and Required Date 05-February-2021 17:00.

On PO Lines tab I’ve used the Vendor Items button and selected both items. For each line I have set – Conversion = 1, Quantity = 3, GL Debit Account = 6000-300-000 and unit cost as follows:

Here is PO 1100, now at APPR status with the two PO Lines quantity 3 each of our two apple products. Each PO line has Issue on Receipt = 1, it defaulted I did not need to set that.

In Receiving application, I will receive quantity of 1 for each item so that I have 6 individual MATRECTRANS records.

Both items have now been received fully, quantity received is 1 for each transaction. The extra 3 transactions are because item 1006 is a rotating item, and so the serialization of the asset is needed. It is received into the HOLDING location called RECEIVING and then transferred from there after serialization. I used action Receive Rotating Items for this, creating assets 2114, 2115 and 2116.

Staying in the Receiving application I have used the Move/Modify Assets action and then the Select Assets button, filtering assets at status=NOT READY, vendor = APPLE, and Rotating Item = 1006. The three assets have been selected.

For each of the assets I am moving them to the OFFICE location, all assets should exist in a storeroom or an operating location. I added OFFICE to the To Location field in the Mass Move section and then used the adjacent Apply button. This has added OFFICE to the To Location in the Assets table window.

The final step, while still in the Move/Modify Assets dialog, is to add myself AJE – Andrew Jeffery as the Primary person, a custodian of these assets, all three of the iPhones will be registered under my name with Apple. The Modify All tab can be used, Person = AJE, Custodian=1, Primary=1, then the Apply button used.

Incidentally, I had to repeat the Users and Custodians step, I don’t know why this was the case because later in this article I moved an asset and changed the user/custodian record as part of the same action. 

Finally, in the Assets application I selected all three assets by performing an advanced search on Custodian = AJE, this verified the User/Custodian setting, and then I used the action Change Status from the List tab to change the three iPhones from NOT READY to ACTIVE status.

That’s all the steps I would expect to do for the receiving of a rotating item or a non-rotating item of these types of items. I wouldn’t expect to inspect them, they would stay sealed and be sent to the person who ordered them.

Non-rotating item, returned before invoice, no replacement, expect a credit note

Using the button Select Items for Return I have selected one of the lines to return a quantity of 1.

On using the OK button, a new MATRECTRANS transaction has been created, do not rush to hit the save button as it will become read-only after this. Note the Quantity attribute is negative for a Return transaction, you can’t see it here, but the line cost will also be negative.

I’ve added a Remark – “Noise cancellation isn’t working effectively”. You could add more details in the remark’s long description to describe the conversation you had with Apple. I’ve also added a Reject Code of WAR to indicate a warranty claim. There is no domain on this field, but it is well worth setting up an ALN domain of type UPPER-6 so that reject codes can be consistently applied.

I’ve now saved the transaction.

In the header area on the Material Receipts tab for PO 1100 the Receipts status has now changed from COMPLETE to PARTIAL as there has been a quantity returned. The Received Cost has also reduced by the value of the Apple Air Pod Pro ($249) that was returned from $3,744.00 down to $3,495.00.

For this item I just want a refund, you might put a comment like that in the remarks long description to give the Accounts Payable department some idea of how to proceed with the return. Incidentally there are some standard attributes in the MATRECTRANS object IT1-IT10 which can be configured for use, so you might, for example use one of these attributes to have a coded set of values to help support AP matching processes.

On the Invoices application I have created a Credit Note, type = CREDIT with description – Apple Credit Note for PO 1100 value $249.00. The PO is set to 1100 and then this fills out the rest of the fields on the Invoice header. I have entered a Due Date of 2/12/21. 

Apologies if you wondered why the date format has suddenly changed mid-way through this article, that is because I did a test to see whether I could work out an issue that has been bugging me, related to Graphical Work Week application, and I had changed the WILSON profile, Locale was set to en_US, I have now changed it back to en_GB, so from now on you will see date formats DD/MM/YY instead of MM/DD/YY. 

We haven’t received the credit note yet from Apple, this is a record ready to receive the credit note which should be issued when Apple has received back the iPhone.

On the Invoice Lines tab, we use the button Copy PO Lines and on the Materials tab we can select the item that has been returned. Notice that as it is a credit note only the material lines that are returned are selectable.

With the invoice line created the totals in the header are accumulated. The button on the right-hand end of the invoice line View Related Records can be used to track back from the invoice line to related PR’s, PO’s, Receipts and Contracts. On the Material Receipts tab, you can see the MATRECTRANS records associated with the PO Line.

Similarly, on the Receiving application there is the same button to View Related Records, this finds just the one Invoice Line of type CREDIT, a credit note. 

In the details area of a Material Receipt line in the section called Receipt Details there is an Invoice field. This is used by a feature of a PO called Pay on Receipt where an invoice is generated at APPR status from the receipt, and so it will not be filled with the Credit Note record.

Non-rotating item, returned after invoice, no replacement, credit note expected

In this section we will receive an invoice for the three Apple AirPod Pros, approve the invoice, then look to make a warranty claim, returning a quantity of one.

I’ve created a new invoice, 1073 for PO 1100 and entered Apple’s Invoice Number IN006174210 and Invoice Date 28 January 2021. The Due Date for payment is 1 month later on 28 February 2021. I have entered the PreTax Total of $747.00 taking the value from the physical invoice.

In the Invoice Lines tab, I have used the Copy PO Lines button and on the PO Lines tab I have selected the second record corresponding to the Apple AirPods Pro item 1007, PO line 2.

As the Pretax Total and the Line Total are the same we can use the action Approve Invoice to move the status to APPR. All three of the Apple AirPods will presume to be paid at the next invoice payment run.

Back on the Receiving application any of the four records that reference PO Line 2, Item 1007 will now show both the Credit Note and Invoice in the View Related Records dialog and Invoices tab.

Using the Select Items for Return button as before, we have selected one of the records, returning a quantity of 1.

I have entered a Remark – One pod has crackles – and this time a long description. Again, a reject code of WAR has been entered.

In the Invoices application I have created a new record of type CREDIT, a credit note, entered the PO 1100 and this time I can search in the Original Invoice field for the approved invoice 1073, tying the two records credit note and invoice together. For the Original Invoice field there is no look-up only a Go To Invoices action. We are expecting the Credit Note in the next week, so I have entered a Due Date of 05 February 2021.

On the Invoice Lines tab, I used the button Copy PO Lines and on the dialog that opened and Materials tab there were two MATRECTRANS records to choose from. Using the radio button View all lines that are not invoiced, will show just the 2nd line the one with Uninvoiced Quantity of -1:00, this is the one to select. The other one would have resulted in a credit note line with no value to it, Uninvoiced Cost is $0.00 on that line.

Before we move onto the third scenario, I will assume that two credit notes have now arrived from Apple and now we can fill in the details for the two invoice records of type CREDIT we have created, they can then be approved.

After filling in the Apple credit note details, the Vendor Invoice reference and Invoice Date, and for our first credit note, invoice record 1071, it has been linked in the Original Invoice field to invoice record 1073, then both credit notes records were approved, status = APPR.

Approved invoice records will go into history. To see them in the Advanced Search you will need to clear the field marked History, its default is set to ‘N’, showing records up to but not including APPR.

Non-rotating item, returned after invoice, replacement received

The process for return is the same as it has been for the other two scenarios of the same item. You use the Select Items for Return button, there is only a quantity of one that can be selected now that the other two of the same items have been returned. I added a remark – Faulty right AirPod, replace under warranty, and this time in the Reject Code field I used REPL – short for Replace.

When the new Apple AirPods Pro arrive, in the Receipts application and for PO 1100, on the Material Receipts tab you use the Select Ordered Items button. Only the one item and PO Line is shown, because PO line 1 for Item 1006 – Apple iPhone 12 Pro has been fully received. 

The Quantity Due defaults to that which is on the PO line, i.e. 3.00 and I changed it to 1.00 and added the Remarks Replacement AirPods.

There is nothing which ties this particular transaction to the return transaction, only that they are both tied to the same PO line, line 2 and item 1007.

Maximo will still assume that there is a quantity of two remaining to be received for item 1007, this is because we have not made a revision of the PO. The Receipts status is set to PARTIAL.

In the Purchase Orders application, we can use the action Revise PO on PO 1100 entering a revision description of – Item 1007 reduced to quantity 1. The revision is 1 and the status will be changed to PNDREV – Pending Revision.

After making the quantity change on PO line 2 to Quantity = 1.00, we can now use Change Status action and set the status to Approved (APPR).

The Receipts status will now be set to COMPLETE, and in Receiving application if you tried to use the button Select Ordered Items there will be no quantities/records left to be received.

Rotating item, returned before invoice, no replacement, credit note expected

Now that we understand the general process, I will move much faster for the next three scenarios. We are returning a rotating item and in the Receiving application we use the button Select Rotating Assets for Return.

When the Select Rotating Assets for Return button is used for PO 1100 we find no assets. The assets need to be in the location in which they were originally received. The original PO was purchased against a GL Debit Account and did not reference a Location, but it was originally received into the HOLDING location for the BEDFORD site, this is called RECEIVING.

Before I move the asset, I’ll use the Assets application’s action Associate Users and Custodians to delete the reference to Person AJE – Andrew Jeffery as Primary and Custodian, I’ve used the trash can button to mark the row for deletion. 

We need to use the Move/Modify Assets dialog. I’ll select just asset 2114.

We will then move the asset from the OFFICE location to the RECEIVING location.

Hmm, that did not work, so I’ll try again moving from RECEIVING location to a blank To Location.

Hmm, that did not work either. My recollection on how this worked was that if a return of asset which was purchased for a storeroom then it must be returned to the original storeroom, for a direct issue rotating item the asset needed to be moved back to the location on the original purchase order. In both cases the asset can’t have been moved to another site, therefore ASSET.MOVED=0, which is the case for my assets.

After investigation (nothing online that I could find), in the Organizations application there is a setting in action PO Options “Do not allow assets to be returned to vendor if transactions are posted?” and on my system this was checked. The field help says:

“If checked, this option will disallow rotating assets to be returned to a vendor even if the asset has been ‘used’ within the system. For storeroom-received assets, the system will require the asset’s location and inventory cost to match the storeroom and receipt cost of the original receipt. For direct-issue received assets the system will require the location of the asset to be equivalent to the location the asset was originally received, and that no other financial transactions reference the asset.”

My colleague Liliana Malaescu who is always so helpful when I get stuck, confirmed that the underlying code did look at the ASSETTRANS object, and probably would disallow fetching of asset records if there were more than one ASSETTRANS record. The first ASSETTRANS record is the one with a transaction type of CREATED. Therefore, if you move the asset, you may no longer be able to return it to the vendor. ASSETTRANS is considered a financial transaction.

I’ll uncheck this field and see what happens.

Success, asset 2114 now appears in the Select Rotating Asset for Return dialog. I’ll do some further testing on this Organization setting in another article. 

The result after save of record is that we have a RETURN transaction of item 1006 – Apple iPhone 12 Pro with a quantity of -1.00, I have highlighted the row for you. The Received Cost has been reduced by $999.00 and the Receipts status now shows PARTIAL.

The Asset 2114 in the Assets application now shows a status of DECOMMISSIONED and the “Returned To Vendor?” attribute is checked.

To complete the process, I have created a credit note in the Invoices application, type = CREDIT, as we did before, we are expecting to receive a credit note from Apple, PO 1100 is entered on the Invoice tab. On the Invoice Lines tab, using the Copy PO Lines button and Materials tab I have used the radio button “View all lines that are not invoiced” and then selected the row for item 1006 with the -1.00 quantity. The credit note record can now wait until we have received the actual credit note from Apple.

In my eagerness to check what would happen when I saved the return of the rotating asset, I completely forgot to mark the Reject Code as WAR – Warranty Claim or to put in any remark to provide assistance to the Accounts Payable team. In a production environment this might also be expected, and so it is probably worth a bit of conditional configuration to make both fields mandatory when the transaction type is RETURN.

Rotating item, returned after invoice, no replacement, credit note expected

In this section we will receive an invoice for the three Apple iPhone 12 Pros, approve the invoice, then look to make a warranty claim, returning a quantity of one, for asset 2115. I have done the first part and created and approved invoice 1076 for item 1006, quantity 3.00.

In the Receiving application, for asset 2115 I used the Move/Modify Assets action to move the asset, the To Location was left blank, then it appeared in the dialog for Select Rotating Assets for Return. This time before I saved the record, I managed to enter the Reject Code of WAR – Warranty Claim, and the Remarks of “Microphone not working on FaceTime or WhatsApp, no replacement, want money back.” which unfortunately was the case with my wife’s iPhone, we’ll probably try and get her another one next month. 

Asset 2115 is now at DECOMMISSIONED state with “Returned To Vendor?” checked. You’ll have to remember to remove any User/Custodian records using the Associate Users and Custodians action, it doesn’t do it automatically.

I have added a second line to the previous credit note for return of asset 2115, the invoice line does not specifically reference the asset returned but the transactions will be linked via the PO and PO Line and the button at the end of the Invoice Lines record allows you to View Related Records. The Credit Note has been approved.

Rotating item, returned after invoice, replacement received

In the Receiving application, for the last asset 2116, I have moved the asset using the Move/Modify Assets action (no location referenced) and removed the user/custodian record for AJE. Then used Select Rotating Assets for Return button to record the return of the asset to the vendor, adding the comment “iPhone faulty under warranty replacement requested” and a Reject Code of REPL – Replace. The Asset record is at DECOMMSSIONED status with “Returned to Vendor?” attribute checked.

In the Purchase Orders application, I have revised the PO using the action Revise PO entering a remark – “Only 1 iPhone 12 Pro required”. While at PNDREV status I have reduced the quantity of item 1006 from 3.00 to 1.00, the other two we had received a credit note. The PO has now been reapproved using the action Approve Purchase Order.

When the new IPhone is received, the replacement, then in the Receiving application we use the button Selected Ordered Items, and the Quantity Due will now show just 1.00 instead of 3.00. I entered the Remarks – Replacement iPhone received”.

When you know that the quantities will change because you have returned items for which no replacement is expected, you should use the Revise PO to reduce the quantity, perhaps checking the Internal Change attribute in the Revise PO dialog.

The material receipt in this case moves to WASSET inspection status. I have used the action Receive Rotating Items to perform the asset serialization. You cannot reuse the same asset number (2116) that is at DECOMMSSIONED status you will get the errors:

I’ve used the Autonumber button, the replacement iPhone will be asset 2123. The Material Receipt inspection status now moves to COMP and the Receipt Status for the PO as a whole is at COMPLETE. It would not have got to a COMPLETE status unless you had corrected the PO to reflect the new quantities expected.

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