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Estimated future returns

Estimated future returns allows you to make provisions for estimated returns with different provision formulas and percentages and with allowance for related costs like royalty payments, pulp and reminder sales etc. 

Backlists and frontlists can be setup with different provision periods. With a higher volume of transactions for frontlists, configurable setups allows actual returns during the provision period to reduce the gross estimate return. Backlist provision amounts can be held for the whole duration of the provision period regardless of any returns.

Gross provision amount is calculated as (returns rate * gross sales) less any amortisation and any costs for the period. All the held provisions are reversed at the end of the provision period. 

Estimated future returns maintenance

Estimated future returns maintenance lets you define and maintain different returns provisions. The provisions formula is by company and can be based on a selection of item levels/classification, stock status on sales, TOS, currency etc. You can setup different formulas with different provisional accounts and return percentages for frontlists and backlists etc. Any applicable costs can be setup for each provision from the list of allocation costs defined on control file TMSDS/RTP-CTYP.

View/Add an Estimated future returns provision

  1. In the menu expand, Base Modules > General Ledger > Other > Estimated Future Returns > Maintenance and then double-click DS Est Future Returns Maintenance. DSW250 Estimated Future Returns Maintenance panel appears. All the existing provisions are listed.
View available options
Option Description
Selection Sales selection (item levels/classification, stock status on sales, TOS, currency) that applies to the Provision formula. The selection must be setup to correctly identify which sales is eligible for the provision formula. 
Costs Displays all the costs relating to the selected returns provision. These are costs that would reduce the provision amount i.e. royalty payments, pulp costs, remainder sales etc. relating to the returned items. These costs are defined in control file TMSDS/RTP-CTYP.
  1. Click Add. DSW250 Estimated Future Returns Maintenance panel appears in Add mode.

View fields on this panel
 Field  Description
Estimated future returns Unique returns provision identifier.
Description Description of the returns provision ID.
Company Company code for the company that the returns provision is being created for.
Prov account gross GL account for the returns provision gross amount.
Prov account net reserve GL account for the returns provision net cost.
Provision return % Returns percentage that is to be used to calculate returns provision gross amount from the sales.
No. of prov period Number of periods that the estimated provisions will be held for.  This can be different for frontlists and backlists etc. and may depend on the sales volume. At the end of provision period the estimate returns provision would be reversed.
Period start code This dictates the start of the provision period, it can be ‘R’ meaning from the product release date or blank from the sales date. For frontlists it is normally from the product release date and for backlists it is normally from the sales period.
Period start parameter ICG (Item customer group) class of the item so the item release date can be identified (item release date is dependent on the different market groups). If Period start code is ‘R’ then this field must be populated.
Effective pub/sales period The provision will only be applicable for items within the effective (publication period for frontlists or sales period for backlists) period specified here.
Amortization method ‘R’ will allow actual returns during the provision period to be reversed from the estimate provision.
  1.  Enter the above information for the provision and click OK. The selection panel appears.
  2. Select the required selection fields and enter the selection values for the new provision. The entered selections will qualify the sales items for the provision.
  3. Click OK. Cost allocation panel appears. 
  4. Enter the applicable cost allocation percentages and the GL accounts for it. The costs would be calculated from initial gross provision amount.
  5. Click OK to confirm. New estimated future returns provision gets added.

Estimated future returns sales extraction

EFR sales extraction process must be run end of every month to update the provision amounts following any actual returns. The extraction process does the following.

  • Extracts the qualifying sales for the period and links to the provision
  • Calculates provision costs by different cost types
  • Summarises the linked sales transactions by item and calculates provision amounts. Provision amount  is calculated by period as per the following:
    • (Returns rate * Gross sales) less amortization less any applicable cost
  • Releases the provision when the provision period has expired; if the provision period is 4 months then the remaining provision will be reversed in month 5.
  • Creates journals for posting to GL
  1. In the menu expand, Base Modules > General Ledger > Other > Estimated Future Returns > Month End Processing and then double-click DS Est Future Rtn Sales Extraction. DSO430 Generate Estimated Future Returns selection panel appears. 
  2. Enter the company and the sales/product release period to run the update for.
  3. Click OK to confirm and start the update.

Estimated future returns GL Posting

This program posts the GL journals created by the sales extraction program.  

  1. In the menu expand, Base Modules > General Ledger > Other > Estimated Future Returns > Month End Processing and then double-click DS Est Future Rtn GL Posting. DSO431 Generate Estimated Future Returns selection panel appears. 
  2. Enter the GL company code and the sales period 
  3. Click OK to confirm. 

Estimated future returns report

Estimated future returns excel report can be run by sales period (for backlists normally) or product release period (for frontlists). It must be run after the EFR sales extraction has been run to update the provision amounts following any actual returns.  

  1. In the menu expand, Base Modules > General Ledger > Other > Estimated Future Returns > Est Future Return Reports and then double-click DS Est Future Rtn Excel Report. DSR255 Est Future Rtn Excel Report  selection panel appears. 
  2. Enter the Product release/Sales period to run the report for.
  3. Click OK to confirm. Ensure the java agent is running to product the excel report. The report lists the following data for each returns provision ID and product release/sales period.
    • Currency
    • Trade amount (gross sales)
    • Returns provision rate
    • Returns provision amount
    • Amortization for each month of the provision period
    • Amortization total
    • Gross provision
    • Related costs/expenditure
    • Net reserve amount
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