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Damaged items returned under warranty

in Accounting / ERP

When customers returned damaged items to us we issue a credit memo, then go through the normal sales order, fulfillment, invoicing process and use apply the credit from the credit memo to the invoice for payment.

Then we have to adjust inventory down because credit memos return the items to inventory.

Is there a better way of doing this?  Any method of giving a customer credit without receiving items?

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