We all know Order to Cash process. We are also aware of RMA to credit process. But now you can extend that process further to refund the customer.

• The process steps are:
• Customer orders a product
• Product is shipped and invoice is sent.
• This invoice is paid by the customer
• Now customer finds an issue with the product and would like to return.
• RMA is created and product is returned (order or invoice can be referenced in RMA).
• Now customer can ask for Refund for the return or he can tell us to keep the money as on-account credit.

Up until recently the only option we had was creating on-account credit for RMAs and manage the process from there. But isn’t it nice to have an option where you can decide to keep it on-account or refund based on customer’s request? Yes the wish is granted. Now you can manage this process completely with standard functionality starting R12 (probably in 11.5.10 as well with a patch or it is already there in that version). Please take a look at the presentation (you can view in full screen is the screens are not visible).
You can either automate this process by with setup at batch source level in AR setup or you can manually perform refund transaction this using applications screen using Refund receivables activity. Refund is a sedeed recevables activity.