Returns
Record goods a customer sends back against the original invoice, so stock and money are both corrected.
Why and when you use it
Customers return goods for many reasons: damage, expiry, wrong item or excess supply. If you just take the goods back without recording it, your stock is understated and the customer still appears to owe the full amount. A return linked to the original invoice fixes stock and gives you the basis for a credit note or refund.
Before you start
- Find the original sales invoice number (Sales Invoices)
- Physically check the returned goods and note which are resaleable and which are damaged or expired
Step by step
- Open ReturnsOpen Returns from the Sales area. The list shows Return #, Date, Customer, Reason, Items and Total.
- Start a new returnPress New Return and link the original invoice. Linking the invoice makes sure you return at the price and GST rate you sold at.
- Add the returned itemsPress Add Item for each product coming back and enter the quantity. Only return what you physically received.
- Give the reasonChoose or write the reason, for example Damaged or Expired. Reasons let you see later why goods are coming back.
- Save the returnPress Save Return. The return starts in the Pending status.
- Approve and completeA manager checks the return and moves it through Approved to Completed, or Rejected if the claim is not valid. Use the status filters to find returns waiting for action.
- Settle the moneyAfter the return is approved, issue a Credit Note to reduce what the customer owes, or a Refund if they have already paid and want money back.
Worked example
Gupta Kirana Store returns 3 of the 20 cartons of detergent bought from Sharma Traders on invoice dated 12 Nov 2026, because the packs were torn in transit. The rate was ₹1,200 per carton plus 18% GST.
- Imran collects the cartons and brings them to the godown on 14 Nov 2026.
- Open Returns, press New Return and link the 12 Nov invoice to Gupta Kirana Store.
- Press Add Item, choose Detergent Powder 1 kg (carton), quantity 3.
- Reason: Damaged. Press Save Return; status is Pending.
- The owner checks the cartons and approves the return.
- Return total: ₹3,600 plus CGST ₹324 and SGST ₹324 = ₹4,248.
Result: The return for ₹4,248 is recorded against the original invoice. The returned quantity is accounted for in stock, and Sharma Traders can now issue a credit note of ₹4,248 to reduce Gupta Kirana's balance.
💡 Tips
- Use the Damaged and Expired filters every month to spot products or routes with too many returns.
- Keep damaged goods aside and record them as Damage / Spoilage in Inventory if they cannot be resold or sent back to the supplier.
- Always link the original invoice; a return without it makes the GST adjustment hard to explain.
⚠️ Common mistakes
- Recording a return but never issuing the credit note or refund, so the customer still shows the old balance.
- Returning more quantity than was sold on the invoice. Check the original invoice before saving.
- Using Stock Adjustment instead of Returns for customer returns. That fixes stock but not the customer's account or GST.
Questions
Does a return reduce my GST?
The GST adjustment is made through the credit note issued against the original invoice. Check with your CA about time limits for issuing credit notes.
What if the customer wants a replacement instead?
Record the return, issue a credit note, and raise a new invoice for the replacement goods.
🎬 Video walkthrough (script — recording coming soon)
- Scene 1: The Returns list and the status filters Pending, Approved, Rejected, Completed, Damaged, Expired.
- Scene 2: Press New Return and link the original invoice.
- Scene 3: Add Item for 3 cartons and choose the reason Damaged.
- Scene 4: Save Return and show it as Pending.
- Scene 5: Approve it and explain the next step: credit note or refund.