Microsoft Dynamics AX employs strict controls around the modification of posted financial transactions, but there are times when we make mistakes or variables change and the need for these modifications rise. The purpose of this article is to show the steps to creating a credit note that in essence will reverse the transaction previously created by the invoice. The following will review the required steps to create and post a credit note invoice and review both the financial and physical transactions.
Step One: Open Sales Orders
- Sales and Marketing > Sales Orders > All Sales Orders
Step Two: Open Credit Note Form
- Select the Sell tab then Credit note.
Step Three: Select the Sales Order or Sales Order Lines to Credit
- Filter by sales order number and select the sales order that you need to create a credit note for. You can credit note the whole sales order by marking the Select all box next to the sales order.
- If you wish only to credit note one or more lines on the sales order, select the Mark box next to the line on the sales order in the lower portion of the form. Checking the Delete order lines box will remove all lines from the sales order and replace them with the new lines containing a negative quantity. If this box is not checked, the original lines will remain on the sales order with the status Invoiced. We suggest removing the check mark. With either selection, this will not have a financial effect on the credit note process but will keep the original lines for reference.
Step Four: Generate the Credit Note
- Once you have the correct sales order and lines selected, click OK in the bottom right hand corner.
- A screen will prompt asking you to confirm the modification of the invoiced sales order. Click Yes.
The sales order is now in Open status and will have a negative quantity for the credited lines. The next step is to post a packing slip for these open lines.
**If you are performing this credit note because the packing slip and invoice dates are in different periods, make sure to post the packing slip first and then the invoice in their respective periods to ensure both reversing transactions are occurring in the correct period**
Step Five: Post Packing Slip
The credit note now must have a packing slip posted to mark the receipt of products. This is required if you have receiving requirements enabled on the product’s item group.
- Select the Pick and Pack tab on the sales order and then select Packing slip.
- In the Overview tab change the Quantity to All.
- Switch to the Setup tab and set the Packing slip date to original packing slip date of the sales order (unless this detail is not required)
- Once the quantity and date are correct, click OK in the bottom right of the form to post the packing slip.
** Specify inventory location if necessary**
You are now ready to post the invoice for the credit note.
Step Six: Post Invoice for Credit Note
- To invoice the credit note, please select the Invoice tab on the sales order then Invoice above Generate.
- On the Posting invoice form, change the Quantity parameter to Packing slip.
- Switch to the Setup tab and set the Invoice date to the original invoice date of the sales order (unless this detail is not required)
- Once the quantity and date are correct, click OK in the bottom right of the form to post the invoice.**Batch number may be required**
You have now successfully posted the invoice for the credit note
By checking the Invoice Journal and Inventory Transactions for the sales order and associated products, you can see the reversing effects of the credit note.
Step Seven (Optional): Check Invoice Journal
You can see that the invoice amount for the credit note canceled out of the original invoice.
Step Eight (Optional): Check Inventory Transactions
The final check in this process is to look at inventory transactions for the credit note.
- Go to Product information management > Release products and search filter for the associated products.
- Select the product then click Manage Inventory > Transactions.
- Filter by sales order number to see the inventory transactions associated with the Credit Note.
A few things to note on this screen:
- The credit note is represented by the line with Receipt status of Purchased and a positive Cost amount.
- The Quantity for the credit note is positive because the AX is recognizing inventory coming back into stock.
- Cost and Quantity cancel each other.
By Bobby Coffin at RSM