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Resolving Item Cost Discrepancies in Business Central: A Step-by-Step Guide

Jun Wang Profile Picture Jun Wang 4,053 Super User

 Resolving Item Cost Discrepancies in Business Central: A Step-by-Step Guide


Managing inventory costs effectively is essential for accurate financial reporting and business operations. In Dynamics 365 Business Central, occasionally, items may be received at incorrect costs, requiring prompt correction to ensure inventory valuation reflects true costs. This blog post will guide you through the process of correcting item costs, depending on whether the item has been invoiced.

Before the Invoice: Correcting Costs through Undo Receipt

If the incorrect cost is caught before the item is invoiced, correcting it is straightforward with the 'Undo Receipt' function:

  1. Navigate to the 'Posted Purchase Receipts' list.
  2. Locate the receipt with the incorrect item cost.
  3. Use the 'Undo Receipt' action to reverse the receipt of the item.
  4. This will reopen the original purchase order, allowing you to adjust the cost.
  5. Post the receipt again with the correct cost.

Undoing the receipt will reverse the inventory transaction and remove any impact it had on your inventory valuation.

After Invoicing: Reversing the Entire Invoice

When the item has already been invoiced, you need to reverse the invoice:

  1. Search for 'Posted Purchase Invoices' in Business Central.
  2. Find and select the invoice containing the incorrect cost.
  3. Use the 'Create Corrective Credit Memo' function to generate a credit memo for the entire invoice.
  4. Post the credit memo to reverse the original transaction.
  5. Create a new purchase order with the correct item cost and process it as usual.

This will offset the original invoice's impact on your financials and inventory cost.

After Invoicing: Reversing a Specific Line

If you only need to correct a specific line in an invoiced purchase:

  1. create a purchase credit memo.
  2. Use the 'Get Posted Document Lines to Reverse' function to select the incorrect line.
  3. Post the credit memo to reverse the line transaction.
  4. Amend the cost on a new purchase order line for the item and post it.

This corrects the cost for the specific item without affecting other lines in the original invoice.

When to Use Purchase Return Orders

Depending on your location setup, you may need to handle the return process differently:

  1. Create a 'Purchase Return Order' for the item with the incorrect cost.
  2. Process the return order to reverse the inventory movement and financial impact.
  3. Create a new purchase order with the corrected cost and process it.

This method is particularly useful when managing returns physically and financially.


Correcting item costs in Business Central is a process that requires attention to detail, especially after the invoice has been posted. By following the steps outlined, you can ensure your inventory valuations remain accurate, reflecting the true costs of items. Whether you need to undo a receipt or reverse a posted purchase invoice, Business Central provides the tools you need to maintain financial integrity.


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