How to Credit a Drop Shipment Vendor Bill Without Affecting the Inventory

When a customer wants to return an item that they received directly from the vendor via a drop-shipment, the return in NetSuite can be processed without affecting the inventory records.

When entering the vendor return authorization, on the Items subtab, check the box in the ‘Drop Shipment’ column for any items the customer received via a drop shipment.

When returns for items are fulfilled that are marked ‘Drop Shipment’, the return is processed as a non-inventory item and has no accounting impact. The return transaction verifies that the item has been returned to the vendor and makes the authorization eligible for a vendor credit.

Here are the correct steps:

  1. Open the ‘Drop Shipment Purchase Order’ and click ‘Authorize Return’Tip Image 1

    Click image to enlarge

  2. A ‘New Vendor Return Authorization’ is opened with the detail on the line with ‘Drop Shipment’ marked yesTip Image 2

    Click image to enlarge

  3. Save the ‘Vendor Return Authorization’Tip Image 3

    Click image to enlarge

  4. Approve the returnTip Image 4

    Click image to enlarge

  5. Click on the return button and the ‘New Item Fulfillment’ will openTip Image 5

    Click image to enlarge

  6. Check the fulfill option and then click save. The option ‘Drop Shipment’ with the value yes shows that the Items will not be returning to the warehouseTip Image 6

    Click image to enlarge

  7. Click on the credit button to create the ‘Vendor Bill Credit’Tip Image 7

    Click image to enlarge

  8. Here is the GL impact of this transactionTip Image 8

    Click image to enlarge