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SAP MM RTP (Return to Vendor) Process

The Return to Vendor (RTP) process in SAP MM is utilized for returning defective, excess, or incorrectly delivered goods to vendors, ensuring inventory adjustments and vendor notifications. Key steps include creating a Return Purchase Order, posting a goods return, verifying invoices, and receiving a credit memo from the vendor. This process enhances inventory management, cost control, vendor relationships, and compliance with audit trails.

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27 views

SAP MM RTP (Return to Vendor) Process

The Return to Vendor (RTP) process in SAP MM is utilized for returning defective, excess, or incorrectly delivered goods to vendors, ensuring inventory adjustments and vendor notifications. Key steps include creating a Return Purchase Order, posting a goods return, verifying invoices, and receiving a credit memo from the vendor. This process enhances inventory management, cost control, vendor relationships, and compliance with audit trails.

Uploaded by

praful
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SAP MM RTP (Return to Vendor) Process

1. Overview of RTP (Return to Vendor) in SAP MM


The Return to Vendor (RTP) process in SAP MM is used when goods or
materials that were previously purchased from a vendor are returned due to
defects, excess quantities, or incorrect deliveries. This process ensures that the
inventory is adjusted, and the vendor is notified for the return of materials.
RTP is part of the procurement cycle and is typically used in the following
scenarios:
 Material quality issues or defects
 Incorrect quantities received
 Goods received that do not match the order or specification
 Goods not needed anymore (for example, over-ordering)
The RTP process involves several key steps: identifying the return, creating a
return purchase order, returning goods, processing the goods receipt, and
handling the vendor’s invoice.

2. Key Elements of RTP Process


 Purchase Order (PO): The original PO is essential for initiating the return
process since it contains information about the materials and vendor.
 Return Material: The materials or goods that are being returned to the
vendor.
 Return Purchase Order (RPO): A special type of PO created for
processing the return transaction.
 Goods Receipt (GR) for Return: A transaction in SAP to post the goods
being returned to the vendor.
 Credit Memo: The vendor issues a credit memo to the company as a
result of the returned goods, which offsets the payment made.

3. RTP Process Steps in SAP MM


Step 1: Create a Return Purchase Order (RPO)
To initiate a return, a return purchase order (RPO) is created in the system. This
special PO references the original purchase order and contains information about
the goods that will be returned.
1. Transaction Code: ME21N (Create Purchase Order)
2. In the PO type field, select Return (RE) as the order type.
3. Enter the Vendor and Purchase Organization as per the original PO.
4. Select the Material and enter the Quantity of the material being
returned. The material data is fetched from the original purchase order.
5. Make sure the Return Indicator is selected and the Return Delivery
Date is set.
6. Save the Return PO.

Step 2: Post Goods Return (GR for RTP)


After the return PO is created, the goods are physically returned to the vendor.
This requires posting a goods return transaction to reflect the change in stock.
1. Transaction Code: MIGO (Goods Movement)
2. Select the Return movement type (usually 201).
3. Enter the Return PO Number and the Item Number related to the
material being returned.
4. Enter the Quantity and any relevant Storage Location where the
material will be placed (if applicable).
5. Post the goods return to update the inventory and adjust stock levels.
After posting, the system updates the inventory and removes the returned items
from stock.

Step 3: Invoice Verification for RTP


Once the goods are returned and the goods receipt is posted, the vendor may
issue a credit memo. The next step is invoice verification in SAP MM to process
the return and ensure the payment is adjusted accordingly.
1. Transaction Code: MIRO (Enter Incoming Invoice)
2. In the invoice verification screen, enter the Return PO Number.
3. Select the Invoice Type as Credit Memo.
4. Ensure that the vendor’s credit memo is linked to the return purchase
order and that the amount is accurately reflected for the returned goods.
5. Post the invoice verification to complete the process and adjust the
vendor’s account balance.

Step 4: Credit Memo from Vendor


When the vendor receives the returned goods, they usually issue a Credit
Memo. This document serves as confirmation of the return and adjusts the
financial transaction by reducing the amount owed to the vendor.
 The Credit Memo is posted against the original purchase order and linked
with the returned materials.
 The accounting entry is created to reflect the reduced liability in the
company's books.

4. Benefits of the RTP Process in SAP MM


 Inventory Management: The RTP process ensures that inventory is
accurately updated and reflects the returned goods, which helps in
maintaining stock levels.
 Cost Control: It helps in managing costs by ensuring that payments for
defective or excess materials are reversed.
 Vendor Relationship: Facilitates smooth communication with vendors
regarding returns and helps maintain good vendor relations by handling
returns systematically.
 Compliance and Audit Trail: The RTP process ensures there is an audit
trail for returned goods, and compliance with company policies and vendor
agreements is maintained.

5. Troubleshooting RTP Process in SAP MM


In case of issues, some common problems and resolutions might include:
 Incorrect Material Number: Ensure the correct material number is used
in the return PO.
 Return PO Not Created: If the return PO was not created, ensure the
right order type (RE) is selected and that the original PO is referenced.
 Return Quantity Errors: Double-check the quantity to ensure it matches
the amount being returned. The system will prevent posting if the
quantities do not match.
 Invoice Mismatch: If the credit memo doesn’t match the goods return,
ensure that the correct values (amount, quantity) are entered during
invoice verification.

6. Conclusion
The Return to Vendor (RTP) process in SAP MM is a critical part of inventory
and procurement management. It ensures that returned goods are processed
efficiently, inventory levels are updated correctly, and financial transactions are
adjusted accordingly. By following the outlined steps, businesses can effectively
manage returns and maintain accurate records of materials, quantities, and
payments.

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