The first step in recording a sales return is to record the original invoice number. You must then record an entry to reduce sales and credit accounts receivable (to reduce the debt of the customer). Then, you must make another entry to debit inventory. You can print invoices from Tally.
The next step in recording a sales return is to determine the appropriate accounting for the transaction. This will depend on whether the returned item was credited or cash. In some cases, the return can be recorded in the cash account while credit sales can be recorded in the accounts receivable or sales return and allowances account.
If a buyer decides to return a product for any reason, the company can record a sales return. Typically, sales returns are caused by excess quantities or defective goods. However, they can also result from shipping problems. Either way, the return reduces sales revenue. This account is used to record the sales return process.
After recording a sales return, you can choose to view its details in a report. You can view the data in a calendar view or in an item-by-item summary. In Tally, you can record local and interstate sales returns with the help of a credit note. Then, you can settle the credit note by sending the buyer a payment voucher or a sales invoice. You can also save your credit note register to keep track of returns. In addition, you can view the credit note register report in your browser. To view the report, choose the month and date. You can also view the report in Tally’s Gateway.
Another type of sales return that you need to track in your accounting system is a sales allowance. In this case, the customer returns the product after receiving it and then wants to get a refund or credit. These allowances are accounted for in the same way as sales returns. If your customers have to return an item, the refund will be deducted from the gross amount of the item.
In Tally, you should account for sales return allowances. It is the difference between gross and net sales. You should make sure to deduct this amount from your total sales so that you can track the return allowances in the income statement. You should also account for the sales return allowances in the event that your merchandise is damaged or faulty.