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In Business Central you can use a purchase credit memo to undo a purchase or send items back to a vendor. The most reliable way to create one is to copy an existing posted purchase invoice, which gives you correct pricing and a clear link back to the original document.
Copy from the posted invoice rather than the posted receipt. The receipt does not carry the correct pricing, because pricing is entered on the purchase invoice.
When you post the credit memo, Business Central posts the opposite of a normal purchase invoice, so the value entries roll back. The negative item ledger entries that reflect the items leaving inventory are recorded separately on the posted purchase return shipment, not on the credit memo itself.
Creating a purchase credit memo in Business Central
Start by opening the purchase credit memo list and creating a new credit memo. Select the vendor you are sending items back to or want a refund from.
The normal approach is to copy an existing posted document. On the Process tab, choose Copy Document. From here you can select a posted invoice, a posted receipt, or another document type.
Choose the posted invoice for the relevant vendor. If you pick the last invoice, which is often the one containing the error you want to correct, you keep the pricing intact.
Why you copy the posted invoice and not the receipt
Be careful which document type you copy. If you select a posted receipt, the pricing may be wrong, because the correct pricing lives on the purchase invoice. Copying the posted invoice is the safe choice.
Copying the document also gives you tracking back to the original invoice. On the purchase credit memo you can see exactly where the lines came from.
Adjusting the credit memo lines and header
When you copy, leave the Recalculate Lines option off so the pricing comes back exactly as it went in. That way the credit memo equals the original entry.
You can adjust the lines to match what you are actually returning. For example, you can change the quantity to send back only 200 of one item and 10 of another. If a line is correct and should not be credited, delete it. The same applies to charges you will not get back, such as freight. Just delete that line too.
In the header, fill in the vendor credit memo number. This is the number from the credit memo you receive from your vendor, and you should have it before posting.
What happens when you post the credit memo
Once the document is filled in, post it like a normal purchase invoice. The posting works in the opposite direction of a normal purchase invoice, so everything rolls back.
After posting, you can open the posted credit memo and navigate from it to see the entries it created. You will find value entries that roll back the financial side of the original invoice.
Where to find the negative item ledger entries
The credit memo handles the invoicing side, but it does not record the items physically leaving inventory. For that, you need the posted purchase return shipment.
Open the posted purchase return shipment to see the quantity shipped back to the vendor, for example 210 units. When you navigate this document, you can see the negative item ledger entries that have been withdrawn from inventory in the correct amount.
Q&A
Should I copy a posted invoice or a posted receipt for a purchase credit memo?
Copy the posted invoice. The posted receipt does not carry the correct pricing, because pricing is entered on the purchase invoice. Copying the posted invoice gives you correct pricing and a link back to the original document.
Should I recalculate lines when copying the document?
No. Leave Recalculate Lines off so the pricing returns exactly as it came in, which keeps the credit memo equal to the original entry.
Can I credit only part of an order?
Yes. After copying, you can change the quantity on each line, for example returning only 200 of one item and 10 of another. You can also delete any lines you do not want to credit, such as a correct line or freight.
What number do I enter in the credit memo header?
Enter the vendor credit memo number from the credit memo you receive from your vendor. Make sure you have it before posting.
Why are there no negative item ledger entries on my posted credit memo?
The credit memo covers the invoicing. The items leaving inventory are recorded separately on the posted purchase return shipment. Open that document and navigate it to see the negative item ledger entries withdrawn from inventory.