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Correction Credit Memos

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Posted on by Navision-ClockStone

I was wondering if someone else feels the below BC behavior as.... not as smart as it could be...:

You can setup BC to post sales invoices to revenue account #1 where as credit memos are posted to account #2.
And although I would not have two accounts for myself, I have clients that do.

The Correction flag in document headers and gen. journal lines controls that wrong entries appear negative on the one or other side of accounts (debit/credit).
That is something still a lot of clients are requesting.

Now, what BC misses out on is that a corrective credit memo (with the correction flag set) should of course post to the identical account
where the sales invoice was posted to (and not the credit memo sales revenue account as of the general posting setup).

BC posts to the credit memo account specified only (if you have set the correction flag or not). That is not actually not correct and needs... ;o) correction!

Does someone agree?

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Dallefeld 211 User Group Leader on at

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I do not agree but I see your point. The purpose of the Posted Sales Invoice Correction and Cancel features was quick ways to do manual entry to reverse a posted document, NOT to change the general ledger accounts used.

I have a client that feels as you do and we simply add a General Posting Setup with the Gen Bus Posting Group of Correction and pointed its credit memo account to the sales account. Client uses Create Corrective Credit Memo and manually edits the lines using the Correction GBPG to accomplish their task.

I think you have a good case for submitting an idea to the Microsoft team.
Navision-ClockStone 37 on at

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That's a good work-around. Thx! Nevertheless the correction field is meant for accounting transparency swapping the credit amount with a negative sign on the debit account and vice versa. This makes just not sense, if the revenue account is different. I am happy to submit this as an idea, although I still consider this a fuzziness.
Amit 2,559 on at

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Hi,

Adding info-:

https://erpconsultors.com/correct-or-cancel-a-posted-sales-invoice-in-d365/

Regards

Amit Sharma

www.erpconsultors.com

Press Yes if info is useful
Navision-ClockStone 37 on at

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experience.dynamics.com/.../

Please vote!
Navision-ClockStone 37 on at

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Thx Amit, but the features are known. The issues persists.
Amit 2,559 on at

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Welcome,

I will create this scenario and update the solution.

Regards

Amit Sharma

www.erpconsultors.com
corwiley 39 on at

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[quote user="Dallefeld"]
I do not agree but I see your point. The purpose of the Posted Sales Invoice Correction and Cancel features was quick ways to do manual entry to reverse a posted document, NOT to change the general ledger accounts used.

I have a client that feels as you do and we simply add a General Posting Setup with the Gen Bus Posting Group of Correction and pointed its credit memo account to the sales account. Client uses Create Corrective Credit Memo and manually edits the lines using the Correction GBPG to accomplish their task.

I think you have a good case for submitting an idea to the Microsoft team.
[/quote]
This is the correct way to do this and the route we are taking but I'm not finding a way to manually edit the General Bus Posting Group on a Credit Memo. I can change the Gen Prod Posting Group on the line items but this isn't what you recommended. Can you clarify?
Dallefeld 211 User Group Leader on at

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Actually you could do the General Posting Setup to use a Gen Prod Posting Group of Correction rather than a Gen Bus Posting Group and accomplish the same thing.
CU25071641-2 20 on at

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When we post a corrective memo our debits double and credits zero out.

Has this been fixed since this posting was made? If so, I'm not sure where to find it.
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DAnny3211 11,397 on at

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Hi,

You're absolutely right to point out this behavior. In Business Central, even when the Correction flag is set on a credit memo, the system continues to use the credit memo revenue account defined in the general posting setup, rather than reversing the original posting to the same revenue account used in the invoice.

This can indeed lead to inconsistencies in reporting, especially for clients who maintain separate accounts for invoices and credit memos. From an accounting perspective, a corrective credit memo should ideally reverse the original transaction, including posting to the same G/L account, to maintain a clear audit trail and accurate revenue reporting.

While the current behavior is by design, it does limit flexibility. A possible workaround could involve customization or using dimensions to track and reconcile revenue more accurately. However, it would be beneficial if Microsoft considered enhancing this logic to optionally reverse to the original account when the Correction flag is enabled.

Please verify if this response was helpful.

Best regards,
Daniele