You want to view the invoice of exercise 3.12. For this purpose, open the invoice inquiry for the particular order in the purchase order form. As an alternative, choose the appropriate menu path. Check the invoice header and lines as well as the related ledger transactions.
In exercise 3.3, you were looking for the summary account for your vendor. Can you find the ledger transaction for this account? Finally, open the transaction origin form and check, to which modules your invoice has posted.
3.7 Credit Note and Item Return in Purchasing
When receiving a credit note from a supplier, you have to register and post it.
Posting a vendor credit note is similar to posting a vendor invoice, except that credit notes require a negative quantity. Like vendor invoices, vendor credit notes are grouped into following types:
Credit notes for inventoried items – Returned to the vendor
Credit notes for intangible goods – For example services, fees, or licenses Vendor credit notes referring to inventoried items have to be registered in the purchase order form. When posting a credit note for an inventoried item, Dynamics AX also posts an item return (negative receipt) in inventory if no separate item return has been posted before. If the item model group does not allow a negative physical inventory, posting the return is only possible if the item is still on stock.
Vendor credit notes, which are not related to inventoried items, can be registered in the following way:
Purchase order – Order lines with non-stocked items (or procurement categories) and a negative quantity
Pending vendor invoice – Invoice lines with non-stocked items (or procurement categories) and a negative quantity
Invoice journal – Journal lines with offset ledger accounts (see section 9.3.3) In case you have to reverse a product receipt, but not an invoice receipt, use the functionality for canceling product receipts (see section 3.5.4).
3.7.1 Crediting Purchase Orders
For an inventoried item, you have to access the purchase order form if you want to post a credit note. If the parameter Safety level of invoiced orders in the procurement parameters (Procurement and sourcing> Setup> Procurement and sourcing parameters, tab Delivery) is not set to “Locked” (and the approval status of the order is not
“Finalized”), you can record and post a credit note in the original purchase order.
Otherwise, you have to enter a new purchase order for the credit note.
In case invoiced orders are not locked, there are following options to register a credit note with an inventoried item:
Original purchase order – Registering a new line in the original order
New purchase order – Purchase type “Purchase order” or “Returned order”
3.7.1.1 Credit Note in the Original Purchase Order
If you want to register a credit note in a new line of the original purchase order, access the purchase order in edit mode. Enter a regular order line, but with a negative sign in the column Quantity. If you expect a replacement from your vendor, you can enter a second purchase order line with a positive quantity for the replacement.
Depending on change management settings, the order may be subject to approval.
Posting the credit note in the pending vendor invoice form after confirming the purchase order works like posting a vendor invoice – after entering the credit note number in the invoice number field you can post the credit note by clicking the button Post in the action pane of the vendor invoice form.
If the checkbox Deductions requirement in the item model group of the credited item is selected, you have to post a separate – negative – product receipt (item return) before posting the credit note (negative invoice).
3.7.1.2 Returned Order
If you want to use a new order for the credit note, you can enter a regular purchase order (Purchase type “Purchase order”) with lines containing a negative quantity.
Alternatively, you can select the Purchase type “Returned order” when creating the order (field on the tab General in the Create purchase order dialog). If you use the purchase type “Returned order”, there are following requirements:
RMA number – The return merchandise authorization provided by the vendor has to be entered in the RMA number field in the Create purchase order dialog.
Quantity – Has to be negative in all order lines.
Return action – For information purposes, displayed on the sub-tab Setup of the purchase order lines (default value in the procurement parameters).
In order to facilitate entering the credit note, you can use the Create credit note feature by clicking the button PURCHASE/Create/Credit note in the action pane of
the purchase order. This feature is also available by clicking the button Purchase order line/Credit note in the toolbar of the order lines.
The credit note feature is similar to the copy feature for purchase orders (see section 3.4.2). But unlike the regular copy feature, creating a credit note reverses the quantity sign, creates a reservation in the original order line, and applies inventory marking (exactly offsetting the inventory value of the original line).
Depending on whether you add credit note lines to an existing or to a new order, you have to pay attention to the checkbox Delete purchase lines in the Create credit note dialog.
3.7.1.3 Inventory Marking
In order to avoid unintended changes of inventory value, you can apply inventory marking to assign the value of the returned/credited item to the corresponding original receipt.
For this purpose, select the new order line (credit note line) in the purchase order form and click the button Inventory/Marking in the toolbar of the purchase order line. In the marking dialog, select the checkbox in the column Set mark now (marking the original order line now returned) and click the button Apply. The inventory value of the new line entered for crediting now exactly offsets the inventory value received from the original line.
Without marking, Dynamics AX calculates the outbound inventory value of the credit note according to the item model group of the item, for example applying the FIFO model.
3.7.1.4 Transaction Settlement
In case the original invoice has not been paid and settled yet, you can close the open vendor transaction of the original invoice immediately when posting the credit note.
For this purpose, click the button INVOICE/Settle/Open transaction in the action pane of the crediting purchase order. In the Settle transaction dialog, select the checkbox in the column Mark of the appropriate invoice and click the button OK.
When posting the credit note, the open vendor transaction of the invoice will be closed.
If you do not settle the invoice when registering the crediting purchase order, the responsible has to settle the invoice and the credit note later in the open transactions (see section 9.2.5).
When working with settlements, take into account that there is no manual settlement if automatic settlement is selected in the applicable vendor posting profile (tab Table restrictions) or in the accounts payable parameters (tab Settlement).
3.7.2 Inventory Valuation with Separate Credit Notes
If you receive a credit note from a vendor for an item price reduction (e.g.
refunding depreciation of damaged goods), there is no actual physical return of an item.
3.7.2.1 Crediting and Re-Invoicing
The easiest way to process such a refund is to register and to post a purchase order containing two lines: One line with a negative quantity and the original price (credit note) and one line with a positive quantity and the new price (invoice).
3.7.2.2 Crediting and Allocating Charges
If this is not suitable, for example if the credited goods have already been shipped, you have to post a credit note which does not directly refer to the item. The credit amount has to be allocated to the item separately in this case. There are two ways to enter this credit note:
Vendor invoice form – Entering an invoice line with negative quantity and an appropriate purchasing category.
Invoice journal – Entering a journal line with negative amount and an appropriate ledger account (see section 9.3.3).
After posting the credit note, you can record a charges transaction to adjust inventory valuation if applicable. For this purpose, select the original invoice in the invoice inquiry (Accounts payable> Inquiries and reports> Invoice> Invoice journal) and click the button Charges/Adjustment in the toolbar on the tab Overview. In the Allocate charges dialog, enter a line for the charges transaction then. The lookup Charges code in this dialog only shows charges with the Debit type “Item” and the Credit type “Ledger account”. You can offset the balance on the credit ledger account by choosing a charges code referring to the same ledger account which you have used in the credit note. The ledger account on the credit note is either determined by the purchasing category (if posting in the vendor invoice form) or entered as offset account in the invoice journal.
Information on the general use of charges is available in section 4.4.5 of this book, detailed information on the Allocate charges form in the online help of this form.