If you use customer returns (scope item BKP) in S/4HANA Cloud, when you refund a customer (either with a replacement or a credit memo), you take over the product ownership from the customer and the product gets valuated.
However, there may be cases where you want to refund the customer but do not want the refund to signal the decision on the ownership because the product inspection has not yet been completed. Considering such cases, we delivered this new function on CE2302 HFC09. The user can decide if the early refund will cause the returned product to be valuated or not. If user wants only the final logistical follow-up activity (which is confirmed in the inspection) to determine whether the product valuation should be carried out or not, they can select this ‘Suspend Valuation’ checkbox on the returns order item.
How it works on S/4 HANA Cloud:
The function is inactive by default in S/4 HANA Cloud, if you want to use it, you need to find the configuration activity 106396 – Configure Returns Order Type for Standard Return and activate the feature of ‘Suspension of Product Valuation Initiated by Refund’.
If user activates the function via above configuration activity, they will see ‘Suspend Valuation’ flag on returns order item.
Scenario 1: Early refund decision made during returns order creation
User selects follow-sup activity 0001 (Receive into Plant) and gives an early refund with refund control ‘P – Create Credit Memo Request / Create Replacement Order’.
If “Suspend Valuation” flag is not checked, the special stock ‘E’ is removed after goods receipt, and the return stock is valuated. The accounting document and controlling document is created. The ownership of returned product is changed from customer to seller.
If the “Suspend Valuation” flag is checked, even if the refund already happened, the special stock ‘E’ is kept after goods receipt, and the return stock is not valuated. The ownership of returned product still belongs to the customer. Whether the product is valuated or not is decided by the final follow-up activity in the material inspection step. For example, after inspection, the product is decided to ship to the supplier (0005), then the product will not be valuated. If the product is decided to move to available stock (0011), the product will be valuated and ownership will be transferred.
Scenario 2: Early refund decision made after returns order released
User selects follow-up activity 0001 (Receive into Plant) and refund control ‘R – Decide Later’. The user is urgently requested by his customer to send a replacement product as early as possible and the user have to create refund document before inspection.
Attention: user needs to decide whether to suspend valuation or not at the time of the returns order creation. There is no opportunity to set the flag after returns order creation.
If user does not select the “Suspend Valuation” flag on the returns order, the returns goods will be valuated after the early refund.
If user selects the “Suspend Valuation” flag on the returns order, even if the refund happened before material inspection, the returns stock is not valuated, and the ownership of return goods will not change.
If the feature is activated in your system, the option to suspend the product valuation can be supported by using the following channels:
- Manage Customer Returns – Version 2
- Manage Customer Returns app under Create Customer Return or Change Customer Return
- Customer Return (A2X) – API_CUSTOMER_RETURN_SRV
- Customer Return (A2A) – CustomerReturnBulkRequest_In
- Customer Return – Replicate (A2A) – CO_SDSLS_ESR_CUST_RETURN_REPL
You also can use BADI ‘SD_SLS_MODIFY_RETURNS_ITEM’ to set the suspend valuation flag in your own business logic.
- Product valuation cannot be suspended if the following refund controls are selected:
- Refund Control: ‘I’ – Indicates an immediate refund and a takeover of the product ownership from the customer. As a result, the system immediately posts the goods receipt to the valuated stock.
- Refund Control ‘N’ – Indicates that the customer return is irrelevant for a refund and thus the product valuation is not applicable.
- Product valuation suspension is not applicable if any of the following logistical follow-up activities is selected:
- 0002 – Immediately move to available stock
- 0003 – Immediately move to scrap
- 0007 – Direct shipment to supplier
- 0008 – Inspection at customer site
- 0013 – Product remains at customer site
- 0014 – Immediately move to specified stock
- 0021 – Send back to customer
- 0026 – In-house repair (service)
- Product valuation suspension is not applicable in cross-company returns process. When we do a cross-company movement, by legal requirement, we must move the value to the receiving company code. This means the movement must be valuated. In this scenario, it is impossible to post the stock into sales order stock (special stock ‘E’) and the stock must be received into valuated stock due to the change of ownership.
You could get useful Information to understand more from below links:
Returns Logistics and Returns Stock
Non-Valuated Stock (with Special Stock Indicator) and Valuated Stock in Customer Returns