Managing Damage Service Scrap Returns and Credit Process
Objective
The objective of this SOP is to provide a step-by-step guide for handling damage service scrap returns and the credit process efficiently. By following these procedures, the team can ensure that damaged products are properly managed, credits are claimed from manufacturers, and inventory is accurately updated.
Key Steps
Initial Damage Identification and Documentation
Take at least two pictures of each damaged product, including the serial tag and shipping carton.
Use the PocketScan app to log and upload pictures.
Return the original carton with the damaged product.
Warehouse Management
Segregate damaged products in a designated area separate from good stock.
Create a "damage warehouse" location in the system for tracking.
Notify the sales team of damaged products for replacement orders.
Manufacturer Communication and Authorization
Create a list of manufacturers and their specific procedures for damage returns.
Follow manufacturer's instructions for returns, whether they require return or on-site disposal.
Obtain necessary documentation for returns, such as pickup documentation or bill of lading.
Credit Claim Process
Create a vendor return in the system and input all required information.
Add any restocking fees or labor charges as negative numbers.
Submit the vendor return and follow up regularly to ensure credit is received.
Alternatively, create a sales order to bill the manufacturer and track payment in accounts receivable.
Product Disposal
Follow manufacturer's instructions for scrapping products, which may include removing serial tags or cutting cords.
Scan the product out of inventory and dispose of it properly.
Credit Reconciliation
Once credit is received, pay off the AR account or complete the vendor return in the system.
Ensure push and pull credits are accounted for separately in the general ledger.
Cautionary Notes
Failure to follow manufacturer's instructions may result in loss of credits.
Regular follow-up is crucial to ensure timely credit reimbursement.
Proper documentation and disposal of damaged products are essential for credit processing.
Tips for Efficiency
Review damage inventory at least once a week to start the credit process promptly.
Maintain clear and concise procedures for handling scrap returns to maximize profitability.
Stay current with unsellable products and handle claim processes promptly to avoid unclaimed credits.
By following these steps, the team can effectively manage damage service scrap returns and credit processes, ensuring that credits are claimed efficiently and inventory is accurately maintained.