Dynamics 365 Field Service : Create return to vendor transactions

In any Field Service organization, managing parts and inventory efficiently is critical. Sometimes, parts need to be returned to vendors—whether due to overstock, defects, or warranty issues. Dynamics 365 Field Service provides a streamlined way to process these Return to Vendor (RTV) transactions.

This blog explores both the functional workflow and the logical flow behind the scenes for creating Return to Vendor transactions in Dynamics 365 Field Service.

Return to Vendor Process

Here’s how a Field Service user creates a Return to Vendor transaction step by step.

Initiate a Return to Vendor (RTV)

• Navigate to Field Service > Inventory > Return to Vendor.
• Click + New to create a new RTV record.

Key Fields to fill:

• Vendor: Select the supplier/vendor from whom the item was purchased.
•  Return Date: Specify when the return will take place.
•  Reason for Return: Choose from predefined reasons like Damaged, Overstock, Warranty Return.
•  Warehouse: Select the warehouse where the part is currently stored.

Add Products to the RTV

•  On the RTV form, go to the Related > Return to Vendor Products subgrid.
•  Click + Add Product.
•  Select the product(s) to return. Enter quantities and confirm the Unit of Measure.

Review and Confirm Inventory Adjustments

When you save the RTV:

•  The system reserves inventory for return.
•  Adjustments are made in the associated warehouse’s inventory.

The inventory status for the product might change to "On Return" or equivalent.

Post the Return Transaction

When ready to ship the items back:

•  Update the RTV status to Posted or Shipped.

 Enter shipment details such as:

• Carrier information
• Tracking number
• Shipment date

At this stage, inventory is deducted from your warehouse.

Close the RTV

Once the vendor acknowledges receipt:

•  Mark the RTV as Closed.
•  Optionally, record vendor credit or replacement details.

How Dynamics 365 Processes RTV Transactions

Now let’s break down what happens under the hood in Dataverse when a Return to Vendor transaction is created.

Data Model Entities Involved

Key Processes Triggered

1. Inventory Reservation

• On saving RTV, stock is reserved in the warehouse so it’s no longer available for new work orders.

2. Inventory Adjustment

  When the RTV is Posted:

• A record in `msdyn_inventoryadjustment` is created.
• Stock quantity for the product in `msdyn_productinventory` is decremented.
• Inventory journal entries are logged.

3. Vendor Acknowledgement

• Custom workflows or Power Automate flows may be used to notify vendors via email.

4. Financial Integration (Optional)

 If integrated with Dynamics 365 Finance & Operations (F\&O):

• RTV can create a return order in F\&O automatically.
• Vendor credits or refunds can be processed.

Business Logic Highlights

•  RTV transactions cannot be posted unless all mandatory fields (vendor, warehouse, products) are filled.
•  User security roles must have permissions to perform inventory adjustments.
• Supports multi-warehouse environments—returns can be initiated from any warehouse where the product is stocked.

Developer Notes: Extending RTV Functionality

If you’re a developer or technical consultant, you might need to extend RTV processes. Some examples:

Custom Plugins

•  Trigger on `msdyn_returntovendor` status change to integrate with external vendor systems.
•  Validate return reasons based on business rules.

Power Automate Flows

•  Notify vendors when RTV is posted.
•  Update ERP systems (like SAP or F\&O).

Custom APIs

•  Expose RTV data to external logistics providers via secure APIs.

Bicep/ARM for Environments

• Set up warehouses and RTV permissions in lower environments programmatically.

Benefits of RTV in Dynamics 365 Field Service

• Centralized tracking of all return transactions.
• Real-time inventory adjustments.
• Better vendor communication and accountability.
• Reduces waste and improves stock accuracy.
• Seamless integration with ERP and logistics systems.

Final Thoughts

The Return to Vendor process in Dynamics 365 Field Service is a critical component of inventory management. It ensures that defective, excess, or unwanted parts are efficiently sent back to suppliers while maintaining accurate stock levels.

For organizations running Field Service at scale, leveraging automation and integrations around RTV can save significant time and reduce errors. Whether you’re a business user managing stock or a developer building extensions, understanding the RTV flow is key to making your supply chain operations more robust.