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Part 1. Mistakes Were Made: The Definitive Guide to Corrections and Reversal in Dynamics 365 Business Central

Mistakes happen. They happen when the barista doesn’t easy foam your half-caf, extra hot, ristretto, touch of vanilla, flat white and they happen when you’re transacting in your ERP. Whether it’s posting to the wrong period, picking the wrong dimensions, or just fat-fingering in a wrong dollar amount, the number of possible places to err in a financial system are plentiful. 

It’s easy to make mistakes. Correcting them should be, too.  Over the years, Business Central has continually improved the ways you can fix these business boo-boos. In this series we’ll go over all the different ways you can undo or fix these slip-ups. To err is human – to correct, divine!

This series covers the following areas:

  • Documents and Payments
  • General Ledger and Bank Reconciliations
  • Dimensions and Budgets
  • Orders
  • Inventory


Whether it’s payables or receivables, at the forefront of these modules is the illustrious “document”, most saliently the invoice, which espouses the taxes, discounts, currency details, dates, and boils it all down to the bottom line. With all those moving pieces, however, there is a high potential to make a gaffe or two. It is particularly more touchy on the sales side, where all that data surfaces onto an external-facing and branded printout that’s typically sent to the customer.

For smaller transgressions, such as a typo in a description field or something, you might get away with exporting the invoice to Word and doing some manual fixes, but for anything of import you’ll want to do the right thing and correct your posted document.

Correcting a Posted Invoice

For internal control purposes, you can’t directly change anything of financial import on a posted invoice. As such, the ‘proper’ way to correct them is to create a corrective credit memo and apply it to the invoice and redo the invoice (if needed). There are three basic scenarios:

1. Redo the whole invoice

This is most appropriate when you either make a mistake that affects the whole document and posting. It also makes sense when you want a comprehensive changed invoice to print/send any relevant stakeholders. Instead of manually creating the credit memo, applying and posting it, and then creating a new one, you can use the Correct function in the Correct ribbon tab shown below:

Then click “Yes” in the confirmation prompt and Business Central will create an exact reversal credit memo, apply it to the invoice to ‘close it’, and then create a new sales invoice, copying everything from the first one so you can make your edits and post again!

Note that you cannot use this function on a fully or partially paid invoice. Instead you’ll need to use a corrective memo (see #3 below).

2. Only reverse the whole invoice

This makes sense if the invoice never should have been created or posted in the first place. Say your AP clerk entered an invoice in the wrong company. Assuming it isn’t an intercompany-appropriate payable, you’ll want to get that off your books. Instead of manually creating a credit memo, applying it to the invoice, and posting, you can simply click the Cancel button in the ribbon of the posted invoice:

After confirming this is what you want, it will do all those steps for you and ask you if you want to see the posted credit memo (say you wanted to send it off to the customer, if it were a sales invoice). Pretty neat.

Note that you cannot use this function on a fully or partially paid invoice. Instead you’ll need to use a corrective memo (see #3 below). 

3. Reverse part of the invoice

This makes sense if part of a line or even one or more of the lines on an invoice need to be reversed. Say you were billed for 20 hours of marketing consulting for a website redesign: 

However you realized that two of those hours were requirements gathering that should have been non-billable per your agreement. You call them up and they apologize and issue you a credit memo to apply against the invoice. Instead of manually creating a credit memo, applying it, etc. you can simply click the Create Corrective Credit Memo in the ribbon:

And simply change the quantity for the two hours to back out:

Easy as (store-bought) pie.

Manual Application

Now there are scenarios when a full-blown correcting document might not be necessary. If you just need to reduce the payable/receivable of a posted document or subledger entry you can just create a journal entry and apply and post (or post and then apply).

The important take-away from reversals is the application – that is how you “link” a correction or reversal to a subledger entry. Applying, unapplying, and re-applying can be done before or after posting.

Before Posting

You can save an extra step later if you apply your corrections before posting. In credit memos, this can be done by clicking the “Apply Entries…” button in the ribbon:

And then selecting/multi-selecting the relevant document(s) to apply to and hitting “Set Applies-to ID” in the ribbon:

You can also do this same process from a journal entry as well by hitting the Apply Entries… button in the ribbon on the journal:

After Posting

However you may not have posted (or know) what original document or entry to correct/reverse yet. In that case, you can still post the reversal to the subledger and then apply it after-the-fact. In that case, post your document or journal line(s) first and then, when you want to apply it, head on over to the subledger (e.g. Vendor Ledger Entries for AP, Customer Ledger Entries for AR, etc.)

Find your correction/reversal and then hit Apply Entries… in the ribbon:

Note the other buttons in there as well (to unapply, reverse, etc.) Those are useful as well if you need to unapply to then later reapply or reverse.

The screen here should look familiar – select which entry/entries to apply to and use that nifty Set Applies-to ID function in the ribbon to pick which to apply to:

Now here you actually have to hit the Post Application… button to register and post the application:

And off to the races you go!


You’re the AP admin and it’s payment day. The neighbour’s dog kept you up all night. Your tumbler of coffee is barely helping keep your eyelids open. You print the cheques, post the Payment Journal only to realize you post-dated all your cheques a year in the future. That may be a problem for the vendor’s trying to cash those cheques!

But you don’t sweat the small stuff – you know what needs to happen. Posting those payments did three things:

  • Created Payment entries in the Vendor Ledger Entries and Bank Account Ledger Entries;
  • Applied the Payment lines to any relevant Vendor Ledger Entries;
  • Posted the resultant G/L Entries (reduced A/P, deducted cash);

So now it’s a matter of resolving all the above.


Before Posting

Fixing a blunder with cheques is actually fairly straight forward – if you’re still in the Payment Journal and haven’t posted, you can simply click on the Void Cheque (if you want to void just one) or Void All Cheques (to void the whole batch) button in the ribbon:

After Posting

If Murphy’s Law has taught me anything it’s that chances are you’ll more likely to realize the cheques are messed up three seconds after posting than catch it before posting! To void a cheque after posting, you simply need to head on over to the Cheque Ledger Entries, locate your cheque number, and hit Void Cheque in the ribbon there:

Decision time; pressing that button presents you with the option to either Unapply and void the cheque (if you, say, need to reissue) or just void it:

Electronic Payments

Before Posting

Similar to cheques, after exporting an electronic payment (in this case a payment export) and before generating the EFT file and posting you have the opportunity to Ctrl-Z all that by clicking the Void button in the ribbon:

After which you’ll have to go through a dialog box and a confirmation prompt to confirm you want to void:

After Posting

After you hit that post button voiding an electronic payment is identical to voiding a cheque; you head on over to the Cheque Ledger Entries, highlight your payment line, and click on Void Cheque (I know, it’s not a ‘cheque’ per se, but po-tay-to, po-tah-to):

Once again you have to decide if you want to only void it or void and unapply it:

Direct Debit / Other Payments

In the event that there’s no associated cheque or electronic payment and it’s just a posting against a bank account, you’ll have to navigate to the Bank Account Ledger Entries, find your payment line and then click Reverse Transaction… in the ribbon:

Which shows you a preview of your reversal to which you can click Reverse or Reverse and Print depending on whether you want some backup documentation around this:

Mistakes may happen, but thankfully they’re pretty straight-forward to undo!

Have you got questions about Dynamics 365 Business Central? Contact us and one of our solution advisors will get back to you.

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