Sometimes the vendor owes you. A case of damaged goods, a billing mistake, a negotiated discount after the fact — and now there’s a credit memo in your inbox that needs to land in the books, and eventually against an invoice.
We’ve spent three rounds paying vendors: entering the order, receiving it, and matching the invoice. In Round 11 of the Functionality Face-Off, the money flows the other way.
How It Works in Dynamics GP: Enter It, Then Apply It
In GP, a vendor credit is a payables transaction you build by hand, documented in Microsoft’s Payables Management guide:
- Go to Transactions > Purchasing > Transaction Entry to open the Payables Transaction Entry window.
- Choose Credit Memo as the document type.
- Enter the vendor ID, the document number from the vendor’s credit memo, the date, and the credit amount.
- Check the distributions — GP builds them from the vendor’s posting accounts, but a credit for freight or a price adjustment often needs a different account than the default.
- Now connect it to the original invoice. Choose Apply to open the Apply Payables Documents window. Auto Apply spreads the credit across open documents until it runs out, or you can mark the specific invoices yourself.
- Post. (You can also apply later from Transactions > Purchasing > Apply Payables Documents — but until someone does, the credit sits unapplied, quietly overstating what you owe.)
It works, and longtime AP clerks can do it in their sleep. But notice what GP never asks: which invoice is this credit actually about? The credit memo starts life as a blank form. The amounts, the accounts, the connection to the original purchase — all of it is typed in, and all of it can be typed in wrong.
How It Works in Business Central: Copy the Document You’re Reversing
BC starts from the opposite idea: a credit memo is usually the mirror image of an invoice you already posted — so start from that invoice (Microsoft Learn):
- Search (Alt+Q) for Purchase Credit Memos and choose New, then pick the vendor.
- Choose Copy Document, select the posted invoice, and BC pulls in the header and every line — items, quantities, and the exact costs you actually paid.
- Delete the lines the credit doesn’t cover, or trim the quantities to match.
- Enter the Vendor Cr. Memo No. from the vendor’s document and post.
Because the credit memo was copied from the posted invoice, BC sets up the application to the original invoice automatically — no separate apply step, no orphaned credits. With Exact Cost Reversing, the reversal even uses the original item costs, so inventory value comes back out at exactly what went in.
There’s an even shorter path: open the posted purchase invoice itself and choose Create Corrective Credit Memo. BC builds the whole credit memo from the invoice and applies it in one motion. And if a credit arrives with no matching document, you can still enter lines manually and apply from the vendor ledger entries — GP-style flexibility, when you need it.
Side-by-Side Comparison
| Feature | Dynamics GP | Business Central |
|---|---|---|
| Starting point | Blank Payables Transaction Entry form | Copy of the posted invoice |
| Line detail | Amounts typed in, distributions checked | Items, quantities, costs pulled in |
| Linking to the invoice | Separate Apply step (or Auto Apply) | Applied automatically via Copy Document |
| Shortcut | — | Create Corrective Credit Memo on the posted invoice |
| Risk of unapplied credits | Credit sits open until someone applies it | Application set up at creation |
| Inventory cost reversal | Handled separately in POP | Exact Cost Reversing uses original costs |
| Manual entry still possible | Always | Yes — enter lines, apply from vendor ledger |
Why BC Comes Out Ahead
- The invoice does the data entry. Copy Document fills in lines from what you actually posted — the vendor’s credit gets checked against real numbers instead of retyped ones.
- Applying isn’t a separate chore. GP’s unapplied credit memos are a month-end classic: the liability looks bigger than it is until someone opens the apply window. BC links the credit the moment it’s created.
- One-click correction. For a straight reversal, Create Corrective Credit Memo turns a posted invoice into its own undo button.
- Costs come back out right. Exact Cost Reversing means returned inventory leaves at the cost it entered — no valuation drift, no manual adjustment.
Turn Vendor Credits Into a Non-Event
If your AP team keeps a spreadsheet of credits waiting to be applied, that’s a workflow BC simply doesn’t need. The Aisling Dynamics team can show you both sides — we support GP shops every day and move them to BC when they’re ready.
Contact us or call (251) 293-0555 — and come back tomorrow for Round 12, when the goods themselves go back: purchase returns.