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Correcting Inventory Costs in Business Central: A Guide to Reversing Negative Adjustments

Jun Wang Profile Picture Jun Wang 4,053 Super User

Correcting Inventory Costs in Business Central: A Guide to Reversing Negative Adjustments

Introduction

When it comes to managing inventory in Microsoft Dynamics 365 Business Central, accuracy is key. Mistakes happen, especially when dealing with inventory adjustments. Perhaps you've entered a negative item adjustment with the wrong cost, and now you're looking for a clean way to rectify it. Don't worry—Business Central offers a straightforward method to reverse these adjustments without resorting to reevaluation. In this blog, we'll guide you through the simple steps to correct such errors.

Understanding the Challenge

A negative inventory adjustment might be used to account for shrinkage, loss, or a write-off of inventory. But what if the cost associated with that adjustment was entered incorrectly? Such errors can have ripple effects on your cost reporting and financial statements.

The Simple Fix: Reverse and Reapply

Here's the process to fix an incorrect negative item adjustment:

  1. Initiate a Positive Adjustment:

    • Go to the Item Journal where you’ll make the correction.
    • Create a new line for the same item with a positive quantity, matching the quantity of the negative adjustment made in error.
  2. Use the 'Applies-from Entry' Field:

    • Personalize your view to add the 'Applies-from Entry' field if it isn’t already visible.
    • In this field, link to the incorrect negative entry by selecting it from the list. For example, if you're correcting entry number 799 with an incorrect unit cost of $7.8, you’d select this entry.
  3. Post the Reversal:

    • Once you’ve linked the positive adjustment entry to the incorrect negative one, post the journal.
    • This action will offset the negative entry and bring your inventory back to its previous state before the incorrect adjustment.

Correcting the Cost with a New Adjustment

After the incorrect entry is reversed:

  1. Enter the Correct Negative Adjustment:

    • Create another item journal line with a negative adjustment.
    • This time, make sure to enter the correct cost for the item.
  2. Post the Correct Entry:

    • With the correct cost entered, post this new negative adjustment.
    • This action will now accurately reflect the reduction in inventory at the correct cost.

Conclusion

Mistakes in inventory adjustments don't have to be a source of stress. With Business Central, you have the tools at your fingertips to correct errors swiftly and accurately. By reversing the incorrect adjustment and reapplying it with the right cost, you maintain the integrity of your inventory valuation and financial records.

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