SAP Return Purchase Order Process Flow

Prepared by Harshvrdhan Rathore

Returning material to the vendor with a return purchase order — from the rejected stock, through the return PO and goods issue to the vendor, to the credit note, adjustment against the vendor payable and closing. Solid boxes are the main flow (number = sequence); dashed boxes are setup, supporting or automatic SAP steps. Hover over a box to see details.

Rejected stock→ Return purchase order→ Goods issue to vendor→ Credit note→ Adjust payable

Main process step (number = order) Supporting / master data activity Document flow Input / support

Department-wise role

Step-by-step flow

#	Department	Activity	What happens	Output

Key return PO concepts

Return purchase orderA PO with the returns item flag, created with reference to the original PO. It carries vendor, quantity, price and tax, and links the goods issue and the credit memo.

Goods issue to vendorPosted against the return PO; it reduces stock and debits GR/IR, so a credit is expected from the vendor.

Movement type161 — goods issue against a return PO (returns item).

Credit memoThe vendor's credit note is posted in invoice verification as a credit memo referencing the return PO; it clears the GR/IR from the return.

Debit noteWhen the vendor does not issue a credit note, the company raises a debit note. Under GST, either document reverses the input tax credit.

GR/IR clearingAfter the goods issue and the credit memo, the GR/IR balance for the return should be zero. An open balance means a missing or mismatched credit.

Note: codes and settings vary by client configuration.