Notes for owners · Industry-Specific Software Guides
How to Set Up an Expiry and Breakage Returns Process for a Pharma Distributor
Set it up as one chain with an owner at each stage. Take returns against the chemist’s original bill, sort them by company and batch, send each company a dated claim, and match its credit note before closing the claim. A monthly near-expiry review keeps the pile of returns smaller.
Ganesh HS, Strategy and Technology, GullySystem · · 4 min read
Decide what counts as a return
Returns reach a distributor for different reasons, and each one is settled differently. Expired strips, near-expiry stock, breakage in transit, short supply and wrong items should never share one heap in the godown.
Each company also has its own terms. Some take back expired stock at full value, some at part value, and some only within a set window after expiry. Write those terms down for every company you carry. Then the receiving clerk knows what to accept before the carton is opened.
- Expired stock returned by chemists
- Near-expiry stock you choose to send back
- Breakage found at delivery or in the godown
- Short supply or wrong item on a company invoice
- Each company’s return terms, written down
Take every return against the original bill
The delivery boy brings cartons back from the chemists on his round. At the godown, each line is entered with item, batch, expiry, quantity and the bill it was sold on. A batch you never sold to that chemist is held aside. It is not credited.
Settle one rule on when the chemist gets credit. Some distributors credit him at once and carry the risk. Others wait until the company’s credit note arrives. Either works if it is applied to every chemist the same way.
Sort by company and raise the claim
Accepted returns are then sorted by company and division. Each company gets a claim list showing item, batch, expiry, quantity and value at the rate it billed you. The cartons are labelled with the claim number and kept apart from saleable stock.
Record the date the claim was raised and who it went to, whether the company’s representative or its C&F agent. Note when the stock was inspected or collected. Without those dates, nobody can say how long a claim has been waiting.
- One claim number per company and period
- Batch and expiry on every claim line
- Value at the rate the company billed you
- Date raised, date inspected, date collected
Match the credit note before closing
Credit notes often arrive late and sometimes cover only part of a claim. Match each note to its claim line by line. Mark what was accepted, what was cut, and the reason the company gave.
An open claims list, sorted by age and company, is the report to review every month. It shows which companies settle quickly and which leave claims waiting. Short differences can be written off with a note, while large ones go back to the company’s area manager.
Shrink the pile with a near-expiry review
Most returns start as stock nobody watched. Run a near-expiry list every month, by company, showing batches that will date within the window you choose. Some can go out on a scheme. Others can be returned while the company still accepts them.
Picking matters too. If the godown takes the nearest box rather than the earliest-dated batch, fresh stock leaves first and old stock ages on the rack. Billing the earliest expiry first, and picking what the bill says, closes that gap.
- Near-expiry list by company each month
- Earliest-dated batch billed first
- Slow batches flagged before the next purchase order
- Open claims reviewed by age
Expiry claim register
A register in which each returned line gets its own row: chemist, bill number, item, batch, expiry, quantity, reason and company. Add columns for claim number, date raised, credit note number and amount settled. Sort it by company to see which claims are oldest.
Open a blank worksheet to printQuestions owners ask
Should the chemist get credit before the company settles?
It depends on your terms with each chemist. Crediting at once keeps chemists happy but leaves you carrying the claim. Whichever rule you pick, apply it to every chemist and note it on the return.
Can billing software handle expiry claims on its own?
Not always. Check whether yours follows a claim from the chemist’s return to the company’s credit note. If it stops at a purchase return entry, keep a claim register beside it.
Does GullySystem’s ready ordering product track expiry claims by batch?
No. Wholesale and B2B Ordering Software handles retailer orders, rates, credit limits and returns against invoices, but it does not track batches. Batch-level expiry claims belong in a system built around your stock.