Yesterday’s Round 19 handled the money-only credit memo. Today the box actually comes back. A customer returns goods, and now your ERP has three jobs at once: put the items back in inventory, credit the customer, and — the part people forget — take the cost back out at the right value, so your margins don’t quietly drift.
We saw this same story from the buying side in Round 12. Now it’s your customer shipping things back to you. Here’s how each system handles it.
How You Do It in Dynamics GP
Step 1: Enter a Return in Sales Transaction Entry. Per Microsoft’s Sales Order Processing documentation, you open the Sales Order Transactions list, choose Return, and select a return Type ID. Same window as orders and invoices — by now, a familiar GP theme.
Step 2: Distribute into quantity buckets. Here’s GP’s signature move. Every returned item must be split across return quantity types: On Hand (ready to resell), Returned (needs inspection), In Use, In Service, or Damaged. Five phones come back and three are sellable while two are broken? You split 3/2 across buckets, and GP creates a separate purchase receipt for each bucket. It’s genuinely useful discipline — your warehouse knows exactly what’s sellable — but it’s also a decision your clerk must make on every line, every time.
Step 3: Get the cost right — yourself. The return puts items back into inventory at a cost, and GP largely leaves that value to you and your setup. If the item’s cost changed since the sale, a careless return re-enters inventory at the wrong value, and your margin report pays for it later. GP does offer a helper: from Sales Transaction Entry, the Additional menu has a Create Return option that looks up the original invoice and pulls the items and costs from it. It works well — but it’s tucked in a menu many users never open, and it still ends in the same manual bucket-and-post routine.
Step 4: Post. Posting the return increases inventory, creates the credit in Receivables, and writes the GL entries. Then — Round 19 flashback — you apply that credit to the right invoice in Apply Sales Documents.
Step 5: Look it up later, creatively. One quirk: GP has no standard report showing how a posted return was split across quantity types. The common workaround is a SmartList on Sales Line Items with the quantity columns added by hand.
How You Do It in Business Central
BC handles returns with a dedicated document — the Sales Return Order — described in Microsoft’s process sales return orders guide.
Step 1: Create the return order from the original sale. Open Sales Return Orders, choose New, pick the customer — then choose Get Posted Document Lines to Reverse. BC lists every posted shipment and invoice for that customer. Check Show Reversible Lines Only and BC hides anything already returned, so the same line can’t be credited twice. Pick the lines, click OK, done typing.
Step 2: Exact cost reversing — automatically. This is the headline. Lines pulled in with Get Posted Document Lines to Reverse are linked to the original item ledger entries through the Appl.-from Item Entry field, so the items come back into inventory at exactly the cost they left at. Not today’s cost, not an average — the original cost. Your inventory value and margins stay clean without anyone doing math. (Want this enforced everywhere? Turn on Exact Cost Reversing Mandatory in Sales & Receivables Setup.)
Step 3: Receive, then credit — separately if you like. Just as shipping and invoicing are separate events in BC (Round 17), receiving a return and crediting the customer are separate too. Post the return receipt when the box hits the dock; post the credit memo after inspection, or let the return order create it. Goods that need inspection can sit received-but-not-credited, in plain view.
Step 4: Handle the real-world extras. Return reason codes tag every return with why it came back. Restock charges can be added right on the return. And if the customer needs a replacement, you can create the replacement sales order from the same process.
Side by Side
| Dynamics GP | Business Central | |
|---|---|---|
| Return document | Return type in Sales Transaction Entry | Dedicated Sales Return Order |
| Starting from the original invoice | Additional > Create Return (easy to miss) | Get Posted Document Lines to Reverse |
| Cost of returned items | Your setup, your care | Exact cost reversing via item entry link |
| Double-return protection | Manual vigilance | Show Reversible Lines Only |
| Receive vs. credit | One posting does both | Separate return receipt and credit memo |
| Condition tracking | Five quantity-type buckets per line | Locations, bins, and inspection workflow |
| Why-did-it-come-back | Not captured natively | Return reason codes |
| Reporting on posted returns | SmartList workaround | Posted return receipts, filterable |
Why BC Comes Out Ahead
GP’s return handling is thorough, and its quantity buckets show real warehouse thinking. But the costing burden sits on your team: return at the wrong value and nothing complains — until the margin report does. The helper that avoids retyping is hidden in a menu, and the credit still needs manual applying afterward.
Business Central makes the safe path the default path. The return starts from the posted document, the cost reverses exactly by construction, the system blocks double returns, and receiving is decoupled from crediting so inspection has room to happen. GP asks your team to be careful; BC makes careful automatic.
Thinking About the Switch?
Aisling Dynamics helps GP teams keep returns and inventory values tidy, and helps companies move to Business Central when exact cost reversing should just be the default. If returns season makes your margins wobble, meet our team, browse the GP vs. BC hub, or contact us at (251) 293-0555.
Come back tomorrow for Round 21: customer setup — GP’s Customer Maintenance windows vs. BC’s Customer Card with templates.