Hi, Susan,

If the returned item has already been invoiced, use a Quick Receipt with a negative quantity that reflects the number of items returned. On the Totals tab you'd specify the Delivery Note option for the Vendor Document Number. A quick receipt will reduce the Qty on Hand in IC but will not send anything to AP.

Once you receive the Credit Note from the vendor, highlight the Quick Receipt and create an Inv/Adj for it. You may find you want to adjust the amount to the amount the vendor has credited you if it differs from the amount you were originally invoiced.

To answer your last question, you could use the same principal. Do a negative Quick Receipt for the return and a positive Quick Receipt for the replacement item, both using the Delivery Note as the Vendor Document Number. Each would update IC but not send anything to AP.

You could do a combined invoice for the two Quick Receipts and the invoiced values for the return and the replacement items should cancel each other out.