An offer to return materials is not yet an agreed account credit

The customer reappears with a different proposal

After ignoring a large materials invoice, the customer offers to return unused goods instead of paying the whole balance. Ask for the details before treating that as a resolution. Quantity, condition, ownership and value need checking, and the effect on the debt must be agreed. Do not assume collecting some goods automatically settles the entire account.

Identify the items offered

Imagine a merchant owed for several deliveries of fittings. The customer offers mixed unopened and damaged stock from its yard. Request an item schedule and compare it with the original supply records. Mark goods that cannot be matched. A pallet count does not establish that the contents are the same products or quantities originally invoiced.

Check the agreement and proposed change

business.gov.au recommends documenting contractual changes clearly. Review the existing return terms and seek advice about the new proposal where necessary. Ask who is entitled to offer the goods and whether an insolvency process or third-party interest affects the position. Do not enter a site or take goods without appropriate authority simply because the customer suggests a collection time.

Source: business.gov.au: Prepare a contract

Assess condition and practical value

Arrange an appropriate inspection through agreed channels and record damaged, obsolete or incomplete items. Consider transport, handling and any work needed before resale. In the merchant's example, the original invoice price may not describe the commercial value of a damaged return. Keep any valuation proposal clear and subject to the necessary agreement rather than improvising a credit after collection.

Define the account treatment

Ask the adviser to review how the agreed return affects the outstanding amount and any remaining rights. Record whether the proposal is partial resolution or intended as a wider settlement. Do not issue a full-account credit merely because goods have arrived at the warehouse. The physical return and the financial outcome need to match the actual agreement.

Reconcile and preserve the result

Keep inspection evidence, collection records, agreed terms and the resulting accounting entries together. Confirm the remaining balance and next payment step accurately. If the proposal cannot be agreed, assess other recovery options with advice. A useful return arrangement is specific and documented; it should not replace one uncertain unpaid account with an argument about what was collected and credited.