Crediting a dealer for returned goods

How a manufacturer credits a dealer for faulty or wrong goods from the original invoice, gets returned stock back on record, and inspects before crediting.

By Achekam · 11 October 2026 · 5 min read · For Manufacturing businesses in South Africa, Nigeria, Kenya

Returns are where a manufacturer's dealer relationships are tested. A dealer phones to say a batch of pumps has a seal fault, or that the courier delivered the wrong gauge of sheeting, or that a customer's order was cancelled and the dealer wants to send stock back. The dealer wants credit quickly. The factory wants to know whether the goods are really faulty, whose fault the wrong delivery was, and whether the returned items can go back on the shelf.

Handled loosely, returns leak money: credits issued for goods that never came back, faulty units restocked and sold again, and stock figures that drift away from what is in the warehouse. This article covers how to credit a dealer properly in Achekam and how to get the returned stock back on record, including what has to be done by hand.

A credit note from the original invoice

In Achekam, a credit note is always issued from the invoice it corrects. There is no free-standing credit note without an invoice. That is a useful discipline for returns: before any credit is raised, someone has to identify which invoice the goods were sold on.

Once issued, the credit note is posted to the ledger and can be downloaded as a PDF or e-mailed to the dealer. If the dealer has already paid the invoice, the leftover credit is held on the dealer's account, ready to set against the next invoice or to refund by agreement.

The credit note uses its original invoice's date and tax codes. That matters when the original sale was at a VAT rate or tax code that has since changed, or when a dealer returns goods months after buying them: the VAT reversed is the VAT that was charged, not today's rate.

Full or chosen lines

A credit note can cover the whole invoice or chosen lines. For returns, chosen lines is almost always right:

Crediting the whole invoice and re-invoicing the rest creates two extra documents and confuses the dealer's accounts team. Credit only what is coming back.

Returned stock back on record

This is where the gaps are. In Achekam, invoice lines are typed in and are not picked from the product list, so invoices do not move stock, and neither do the credit notes made from them. Returned goods credited through receivables do not find their way back into stock on their own.

With the Warehousing add-on, the way to bring returned items back on record is a stock count. A count sets a location's quantity to what was counted and records the difference as an adjustment. A simple method:

1. Keep a returns location, separate from saleable stock, for goods awaiting inspection.
2. When returns arrive, count that location so the quantity on record matches what physically came back.
3. After inspection, count again: good units move to saleable stock, faulty ones to a quarantine or scrap location.

There is a second gap your accountant needs to know about. Stock counts, wastage, transfers and opening quantities do not post to the general ledger; only till sales and till returns move the inventory account. So a count that brings returned stock back on record changes quantities, not values. If you carry inventory in your ledger, agree a month-end journal for the value of returned and scrapped stock, based on the count records.

Returns at the trade counter till

Some manufacturers sell over a trade counter as well as through dealers. Returns of goods sold at the till work differently. A supervisor or manager can refund all or part of a till sale with a reason, as its own document linked to the sale, and the goods are put back into stock. Because till returns do move the inventory account, the value follows the goods.

That makes it important to send each return back down the route it came in. A dealer's invoice-based purchase should be credited from the invoice; a walk-in customer's till purchase should be refunded at the till. Mixing them leaves stock or receivables wrong.

Inspecting before crediting

The most expensive return is the one credited before anyone looked at the goods. Make inspection a gate:

• Agree a returns authorisation. The dealer asks first and quotes the invoice number; nothing comes back unannounced.
• Inspect on arrival. Quality or workshop staff record what was found: fault confirmed, no fault found, damaged in transit, or wrong item.
• Credit what inspection supports. A unit with no fault found goes back to the dealer, or is credited by agreement with a handling charge.
• Keep the evidence. Photographs, serial numbers and the inspection note belong with the credit note.

Investopedia's explainer on warranties covers express and implied warranties, why claims are denied and how warranty disputes are resolved, which is useful background when a dealer disputes the inspection result.

A dealer return, in words

A dealer reports that four of the ten valves on an invoice leak. The factory issues a returns authorisation against that invoice. The valves arrive and are counted into the returns location. Inspection confirms three faulty and one damaged by the dealer's fitter. The factory credits three valves from the original invoice's line, returns the fourth with the inspection note, counts the three into the quarantine location, and posts the month-end journal for the scrapped value.

Setting up for returns

Write a one-page returns procedure for dealers, create returns and quarantine locations, and decide who inspects and who may raise credit notes. Dealer pricing and dispatch are covered in dealer price lists, credit limits and waybills, and crediting part of an invoice for a service rather than goods in crediting a seat downgrade.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.