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Purchase credit note not affect to inventory

Posted on by 4

Hi Experts,

Purchase order has 10 partial purchase receipts and actually it should be 10 invoices for particular purchase receipts.

But finance team wrongly create one invoice which is linked to 10 purchase receipts but amount is only type for 1 purchase receipts quantity. Stock has been used and no more stock in inventory.

I want to reverse those purchase invoice to correct the invoice amount.

THank You.

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase credit note not affect to inventory

    Hello Sweety Star,

    You are right. Option 1 won't affect the vendor. At the time you post the adjustment the stock value will increase by the adjustment amount and the offset will be a P&L account. The posting should be something like: DR: Inventory CR: P&L account. To get the vendor balance right, you would have to do an additional manual posting where you debit the P&L account against the vendor. Something like DR: P&L account CR: Vendor. 

    If you use the adjustment functionality in the PO form you are basically doing the same, as the inventory value will be increased and a P&L account be used as the offset account that you have to manually clear.

    The main difference to Option 1 in my opinion is that the adjustment made in the inventory and closing adjustment form is better to track and follow. Adjustments made are not easily visible and identifyable. Irrespective of that, both processes should give you the right result. 

    Best regards, 

    Ludwig

  • Yin Mon Pyone Profile Picture
    Yin Mon Pyone 4 on at
    RE: Purchase credit note not affect to inventory

    Thank you for your advice.

    We have tentative solution as I mentioned in above.

  • Yin Mon Pyone Profile Picture
    Yin Mon Pyone 4 on at
    RE: Purchase credit note not affect to inventory

    Hi Ludwig,

    Thank Your for your time and advice.

    Option-1, if we use closing and adjustment, although Item cost is ok, it will not hit to vendor.

    Option-2, it is not possible to reverse as stock has been used.

    We are thinking that we will use "Adjustment" function which is under posted invoice.

    this will adjust item cost and one of the ledger account (for eg- clearance account).

    Then, finance will reverse that clearance account to vendor account by using journal.

    Is that our way correct?

    Thank You.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase credit note not affect to inventory

    Good Morning Sweety Star,

    Have you been able to do some testing to check how to correct this best?

    Would be great if you could keep us updated here.

    Many thanks and best regards,

    Ludwig

  • Suggested answer
    Satish Panwar Profile Picture
    Satish Panwar 14,645 on at
    RE: Purchase credit note not affect to inventory

    Only if your finance team allows, rather than making it complicated here is a simple solution, just have them enter one -ve amount invoice (via invoice journal for the "total amount posted - correct amount". This will get the amount corrected on this invoice. Offset can be 9 other invoices that you want. This is assuming, purchase prices/cost are not varying between invoices as they belong to same vendor/purchase order. Hope this works and with user training it won't happen again.

    This will get you total of 10 invoices that you can use now to pay your vendors.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase credit note not affect to inventory

    Hello Sweety Star,

    Thank you for the confirmation.

    By matching all 10 product receipts with the value of a single invoice, the total average price of your products was reduced to a much smaller amount.

    You have two options to get this corrected in my opinion:

    Option 1:

    Use the closing and adjustment for to record an adjustment to the amounts posted.

    You should be able doing that after a reconciliation/close of the inventory has been processed.

    Here is a post that illustrates how this can be realized:

    www.loganconsulting.com/.../adjusting-cost-on-inventory-transactions-in-d365-for-finance-and-operations-part-i

    Option 2:

    If the first option does not work out then you would have to manually reverse what has been posted and matched.

    That is, you would basically have to create a lot of corrective POs, packing slips and first reverse the wrong invoice posting and match.

    Then you have to create new POs, packing slips and post the invoice correctly.

    When doing that ensure that you use the marking functionality to ensure that the corrections do not mess up your cost prices.

    I would try option 1 first as it seems faster and easier.

    Please test in a demo/test version first and let us know if this fixed your issue.

    Best regards,

    Ludwig

  • Yin Mon Pyone Profile Picture
    Yin Mon Pyone 4 on at
    RE: Purchase credit note not affect to inventory

    Hi Ludwig,

    Yes you are right.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase credit note not affect to inventory

    Hello Sweety Star,

    To get this right, I would like to know if my understanding is correct:

    - your finance team created an invoice for one of the receipts but instead of matching the one receipt, they actually matched all 10 receipts

    - is that right?

    Best regards,

    Ludwig

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