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Dynamics 365 Community / Forums / Supply chain | Supply Chain Management, Commerce / How to Reverse Incorre...
Supply chain | Supply Chain Management, Commerce
Suggested Answer

How to Reverse Incorrect PO Item Affecting Inventory with Closed Financial Year

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Posted on by Imran Mustafa001 10

We have a Purchase Order  that has been fully received, and a prepayment invoice has already been posted and settled. However, the PO remains not fully invoiced.

The issue is as follows:


  1. The PO includes an incorrect item that is currently affecting inventory balances. The line should have been created as a service instead of an item.

  2. If we cancel the product receipt, the reversal voucher will be posted in 2025, which is already a closed financial year. Although the year-end closing has been completed, the period is still open in the system, so voucher posting is technically allowed.
    Question: What is the correct and recommended approach to completely remove this item from inventory and resolve the PO issue, considering the prepayment settlement and the closed financial year?



    3.  
Categories:
Dynamics 365 Supply Chain Management
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  • Suggested answer
    BillurSamdancioglu Profile Picture
    BillurSamdancioglu 20,074 Most Valuable Professional on at
    Can you invoice with a zero price and zero the balance of the item via counting. Of course these will create postings in the open period, so you will need to consider these postings with Finance approval.
  • Suggested answer
    Encore Business Solutions Profile Picture
    Encore Business Sol... 50 on at

    Hi there, Imran,

    Technically, the correct method would be to open the period, reverse what was done, create the correcting entries, and process the year end again.
     

    However, given that the fiscal has been closed, you may not want to trigger inventory adjustments in the closed period.

    If that's the case, consider a general ledger adjustment for reporting purposes in the closed inventory period, that is open for vouchers. Then reverse the general ledger transaction in the open period, and complete the correcting inventory transaction in the same period.

     

    Here are some additional considerations to be aware of:

    • The GL accounts that you may want to affect could be marked for disallow manual transactions, as they would be control accounts. 
    • Regeneration of reporting would show a discrepancy between subledger and control.
    • The inventory item affected may not be able to change the type once it has transactions posted against it.

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