Purchase Receipt Query

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Posted on by RR-07061806-0

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Good day,

I have a scenario where -

Items were received.

One particular item had a wrong cost, and received with the wrong cost.

Supplier sent a credit note with all items including the problem item but with the correct cost.

The credit memo was entered and posted.

There is now a difference between both item transactions. The item with the wrong cost is 26,906.46, correct price is 30,355.50 difference of 3,449.04. This difference the system would have calculated.

We use average cost, I understand the difference, but how do I explain the difference. Am I expected to do anything with that value, does it affect the cost?

When items are received it is not received in the location for resale, it's only after costing is completed it's transferred to the location for billing. So the cost is 'correct'.

Any thoughts would be appreciated.

Regards

Rosemary

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Dynamics 365 Business Central

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Teagen Boll 1,376 Super User 2026 Season 1 on at

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I can't see your screenshots yet but what should happen in this scenario if you have automatic cost adjustments is you will have an adjusting entry for the difference in the inventory cost posted on the Credit Note.

You should see the following inventory costing entries in the GL for your credit note:

Dr - Inventory Adjustment Account - 30,355.50

Cr - Inventory Adjustment Account - 3,449.04

Dr - Inventory Account - 3,449.04

Cr - Inventory Account - 30,355.50

If you look at the Item Ledger it should just show an in and an out the original amount (26,906.46). So you don't need to do anything.

That's how I understand it works but someone else can correct me if there is other information.

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OussamaSabbouh 12,803 Super User 2026 Season 1 on at

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Hello,

You received the item at the wrong cost.

The vendor credit memo reversed that cost and posted the correct cost.

The difference (3,449.04) is posted as a Value Entry adjustment, this is normal.

Because you use Average Cost, Business Central automatically updates the item’s inventory value to the correct cost.

You don’t need to do anything.

The cost shown in entries looks split because BC keeps the original receipt and corrects it using adjustment entries.

Inventory value and average cost are now correct.

Regards,
Oussama Sabbouh

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Jainam M. Kothari 15,732 Super User 2026 Season 1 on at

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Hello,

The difference of ₹3,449.04 occurred because the item was initially received at an incorrect cost, and when the supplier’s credit memo was posted with the correct cost, Business Central recalculated using average costing.

This adjustment ensures inventory valuation and the G/L reflect the corrected cost through the Adjust Cost – Item Entries and Post Inventory Cost to G/L processes, so no manual action is needed unless you want to enforce a specific cost layer.

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RR-07061806-0 954 on at

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Good day,

Thank you for your response.

The attached has information from the value entries, please correct my interpretation. The difference between the invoices and the credit memos would have generated the difference which the inventory will see as an adjustment (3449.04).

The cost of the item on the initial invoice was 42*722.75, the credit from the supplier was also 42*722.75.

From the attached an attempt was made to correct the transaction by creating an invoice and credit. When the invoice was done it was at the correct price which was 42*640.63. This document was received and when doing the return, the 640.63 came up, the user then changed the price to the 722.75.

The unit cost of the item should be 640.63, it's currently 722.75. From the attached it appears as the system is still seeing just the 42*722.75.

My apologies that it sounds so confusing. In terms of best practice should the user have changed the price when entering the credit?

Regards

Rosemary

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YUN ZHU 99,055 Super User 2026 Season 1 on at

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If you are completely canceling a previous invoice, I think you should not change the price.
However, if this situation has already occurred, you can use an item revaluation journal to adjust the cost.

More details: https://learn.microsoft.com/en-us/dynamics365/business-central/inventory-how-revalue-inventory?wt.mc_id=DX-MVP-5004336

Hope this helps.

Thanks.

ZHU

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