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SAP S4 HANA MM - Vendor Return & Subsequent Delivery

Comprehensive Guide for Materials Management Consultants

2
Return Processes
5+
Key TCodes
3
Movement Types
S/4
HANA Optimized

Understanding Vendor Returns in SAP S4 HANA

In SAP MM, there are two primary methods to handle vendor returns:

  1. Return Delivery with Subsequent Delivery - When the vendor will replace the returned goods
  2. Vendor Returns (Return Purchase Order) - When the vendor will not replace the goods but issue a credit

Return to Supplier Process

Return to supplier processing enables you to return damaged, unwanted, or poor quality goods to your supplier. This process is initiated when goods received do not meet quality expectations or specifications.

Common Reasons for Returns

  • Damaged during transport
  • Poor quality goods
  • Wrong product delivered
  • Quantity discrepancies
  • Expired items

Key Process Benefits

  • Accurate inventory management
  • Proper financial reconciliation
  • Complete audit trail of returned goods
  • Proper vendor performance evaluation
  • Compliance with accounting standards
Feature Return Delivery with Subsequent Delivery Vendor Return (Return PO)
When to Use Vendor will replace the returned goods Vendor will not replace goods but issue credit
Movement Type 122 (Return), 101 (Subsequent) 161 (Return)
Document Required Original GR Document Return Purchase Order
Financial Settlement Regular Invoice Credit Memo

Decision Tree: Which Return Process to Use?

Will the vendor replace the returned goods?

Use Return Delivery with Subsequent Delivery process

1. Use MIGO with Return Delivery option (Movement Type 122)

2. Process Subsequent Delivery (Movement Type 101)

3. Process regular Invoice (MIRO)

Use Vendor Returns (Return Purchase Order) process

1. Create Return PO with "Return Items" checked (ME21N)

2. Process Goods Return (Movement Type 161)

3. Process Credit Memo (MIRO)

Return Delivery & Subsequent Delivery

When to use: Use this process when the vendor agrees to replace the returned goods with new ones.

What is Subsequent Delivery?

Subsequent delivery is an additional delivery of goods to fulfill demand or replace a previous defective delivery. It's used when an order cannot be fulfilled with just one delivery, or when goods were returned and the vendor is sending replacements.

Process Flow

Create Purchase Order

Create a standard purchase order for the material

ME21N

Goods Receipt

Receive the goods from vendor

MIGO 101

Quality Inspection

Identify damaged/defective items

Return Delivery

Return goods to vendor

MIGO 122

Subsequent Delivery

Receive replacement goods

MIGO 101

Invoice

Process regular invoice

MIRO

Step-by-Step Procedure

Step 1: Create Purchase Order & Receive Goods

  1. Execute transaction ME21N
  2. Enter vendor, material, quantity, and other details
  3. Save the purchase order
  4. Execute transaction MIGO
  5. Select "Goods Receipt" and enter PO number
  6. Enter quantity received and post

Result: Goods receipt is posted with movement type 101

Step 2: Process Return Delivery

  1. Identify defective/damaged items during quality inspection
  2. Execute transaction MIGO
  3. Select "Return Delivery" option
  4. Enter the material document number from the goods receipt
  5. Specify quantity to return (only the defective items)
  6. Select reason for return (e.g., "Poor Quality")
  7. Post the return delivery

Result: Return is posted with movement type 122

Step 3: Process Subsequent Delivery

  1. Execute transaction MIGO
  2. Select "Subsequent Delivery" option
  3. Enter the material document number from the return delivery
  4. The system automatically proposes the returned quantity
  5. Post the subsequent delivery

Result: Replacement goods are received with movement type 101

Step 4: Check Purchase Order History

  1. Execute transaction ME23N
  2. Enter the purchase order number
  3. Review the history tab

Result: You should see three documents:

  • Initial Goods Receipt (Movement Type 101)
  • Return Delivery (Movement Type 122)
  • Subsequent Delivery (Movement Type 101)

Step 5: Process Invoice

  1. Execute transaction MIRO
  2. Enter purchase order number
  3. Enter invoice details (date, amount, tax)
  4. Verify that the system calculates correct amounts based on net quantity
  5. Post the invoice

Result: Invoice is posted for the net quantity (original quantity minus returned quantity plus subsequent delivery)

Best Practices

  • Always document the reason for return in the system
  • Keep track of return material document numbers for easy reference
  • Ensure that the subsequent delivery quantity matches the return quantity
  • Verify PO history to confirm all movements are correctly recorded

Vendor Returns (Return Purchase Order)

When to use: Use this process when the vendor will not replace the returned goods but will issue a credit.

What is Vendor Return?

Vendor Return is used when you need to return goods to a vendor without expecting a replacement. Instead, the vendor will issue a credit for the returned goods. This is often used for:

  • Consolidated returns of unsold items (e.g., newspapers, magazines)
  • Returns without reference to original purchase document
  • When vendor cannot or will not replace goods

Process Flow

Create Return Purchase Order

Create PO with "Return Items" checked

ME21N

Goods Return

Return goods to vendor

MIGO 161

Credit Memo

Process credit memo from vendor

MIRO

Step-by-Step Procedure

Step 1: Create Return Purchase Order

  1. Execute transaction ME21N
  2. Enter vendor, material, quantity, and other details
  3. Go to the Item Detail and check "Return Item" checkbox
  4. Notice the price becomes negative automatically
  5. Save the purchase order

Result: Return Purchase Order is created with negative values

Step 2: Process Goods Return

  1. Execute transaction MIGO
  2. Select "Goods Receipt" and enter the Return PO number
  3. System automatically selects movement type 161
  4. Enter quantity to return
  5. Post the goods return

Result: Goods return is posted with movement type 161

Step 3: Process Credit Memo

  1. Execute transaction MIRO
  2. Select "Credit Memo" option (not regular invoice)
  3. Enter Return PO number
  4. Enter credit memo details (date, amount, tax)
  5. Verify that the system calculates correct amounts
  6. Post the credit memo

Result: Credit memo is posted, completing the return process

Important: You must select "Credit Memo" option. If you select "Invoice," the system will keep adding to the negative amount rather than balancing it.

Use Case Example: Newspaper Returns

A retail shop orders 100 copies of a newspaper daily. At the end of the week, they have 50 unsold copies that need to be returned to the vendor. The vendor will not replace these but will issue a credit.

  1. Create Return PO for 50 newspapers (ME21N with "Return Items" checked)
  2. Process Goods Return (MIGO, Movement Type 161)
  3. Process Credit Memo (MIRO with "Credit Memo" option)

Best Practices

  • Always use the "Return Items" checkbox when creating a return purchase order
  • Verify that prices show as negative values after checking "Return Items"
  • Always select "Credit Memo" in MIRO, not "Invoice"
  • Maintain consistent documentation for return reasons
Common Issues and Troubleshooting +

Issue: Prices not showing as negative in Return PO

Solution: Ensure "Return Items" checkbox is checked in the Item Detail screen

Issue: Movement type not changing to 161 in MIGO

Solution: Verify that the PO is a return PO with "Return Items" checked

Issue: Invoice posting error when processing credit memo

Solution: Ensure you selected "Credit Memo" option in MIRO, not "Invoice"

TCodes & Tables Reference

Key Transaction Codes

TCode Description Used For
ME21N Create Purchase Order Creating standard PO or return PO (with "Return Items" checked)
ME22N Change Purchase Order Modifying existing purchase orders
ME23N Display Purchase Order Viewing purchase orders and their history
MIGO Goods Movement All goods movements including receipt, return, subsequent delivery
MIRO Enter Invoice Creating invoices or credit memos
MMBE Stock Overview Viewing current stock levels
MB51 Material Document List Viewing all material documents for a specific material

Important Movement Types

Movement Type Description Used In
101 Goods Receipt for PO Initial receipt and subsequent delivery
122 Return Delivery to Vendor Return delivery process
161 Returns (to Vendor) Vendor returns process (Return PO)

Key Database Tables

Table Description Contains
EKKO Purchase Order Header Header data for all purchase orders
EKPO Purchase Order Item Item data for all purchase orders
MKPF Material Document Header Header data for all material documents
MSEG Material Document Item Item data for all material documents
RBKP Invoice Document Header Header data for all invoice documents
RSEG Invoice Document Item Item data for all invoice documents
S/4 HANA Specific Considerations +

In SAP S/4 HANA, several improvements have been made to the vendor returns process:

  • Simplified User Interface: Fiori apps provide a more user-friendly interface for returns processes
  • Enhanced Performance: Due to HANA database capabilities, processing is faster
  • Simplified Table Structure: Some tables have been replaced by views in S/4 HANA
  • Real-time Analytics: Better reporting capabilities for returns analysis
Configuration Parameters +

The following configuration parameters can affect vendor returns processing:

Parameter Purpose TCode
Movement Types Define valid movement types for goods movements OMSL
Valuation Class Affects how returns are valued OMWM
Account Determination Determines GL accounts for returns postings OBYC

SAP S/4 HANA MM Consultant Guide - Vendor Return & Subsequent Delivery

Based on SAP S/4 HANA MM best practices and configuration.

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