Undo Receipts and Reversals

Summary

This article explains how Clever Landed Costs reverses landed cost postings when a purchase receipt is undone, a purchase return order is posted, or a posted landed cost invoice is cancelled, corrected or credited. It also explains how to review the resulting entries on the "Landed Cost Ledger Entries" screen.

How Reversals Work

Clever Landed Costs never deletes or overwrites a posted landed cost entry. Whenever a receipt, invoice, or document that landed costs were assigned to is undone, returned, or corrected, the app creates a new offsetting entry instead. Each landed cost posting is stored as an entry on the "Landed Cost Ledger Entries" screen, and the Entry Type field identifies what kind of posting it is. The available values are Receipt, Invoice, Variance, and Reversal.

When an entry is offset by another entry, the original entry's Closed by Entry No. and Closed at Date fields are updated to point to the entry that reversed it, so the audit trail between the two entries can always be traced. Reversal entries also carry an Appl.-to LC Entry No. value that points back to the original entry they reverse.

Undoing a Purchase Receipt

When a purchase receipt with landed costs has not yet been invoiced for its landed costs, you can use the standard Undo Receipt action from the "Posted Purchase Receipt" screen to reverse the receipt. This works for receipts with or without lot and serial numbers. Clever Landed Costs automatically creates offsetting entries for every landed cost that was posted against the original receipt:

• landed costs that came from the "Document Landed Costs" of the purchase line are offset by Receipt entries with a negative Cost Amount (Expected), posted against the correction item ledger entry created by the undo

• landed costs that have no purchase line document landed cost, such as Purchase Order and Landed Cost Container Fixed Costs, are offset by Reversal entries with the description LC Undo Rcpt followed by the "Landed Cost Type" code

The original Receipt entries are not changed or removed; their Cost Amount (Expected) values remain exactly as originally posted, and their Closed by Entry No. field is set to reference the offsetting entry. The offsetting entry's Closed by Entry No. points back to the original entry. If Expected Cost Posting to G/L is set on the "Inventory Setup" screen, the associated accrual G/L postings are also reversed.

If the receipt had closed a "Landed Cost Container", undoing it changes the container Status back to Released and clears the Fixed Cost Accrued flag on the container's Fixed Costs. The undone receipt entries are excluded from Fixed Cost sharing, so when you post the receipt again the Fixed Costs are accrued against the new receipt only.

Note: You cannot undo a receipt once an actual Landed Cost invoice has been posted against it. If you try to do so, Clever Landed Costs blocks the action with the message "You cannot undo this receipt because actual Landed Cost invoices have been posted against it. Use a Purchase Return Order instead."

Reversing Costs with a Purchase Return Order

If a receipt has already been invoiced, or you only want to reverse part of a receipt, use a Purchase Return Order rather than the Undo Receipt action. Create a new Purchase Return Order for the vendor, then use the Get Posted Document Lines to Reverse action to select the line(s) from the original posted receipt that you want to return. This fills in the Appl.-to Item Entry field on the return line so that it is applied to the original receipt. Adjust the quantities if needed, then post the return shipment.

Note: Landed costs are only reversed when the return line is applied to the original receipt entry. If you enter the return line manually, set the Appl.-to Item Entry field to the item ledger entry of the original receipt.

Clever Landed Costs then creates Reversal entries for the landed costs on the return shipment:

• A full return reverses the entire Cost Amount (Expected) of each landed cost posted at receipt.

• A partial return reverses a proportionate share of the expected cost, based on the quantity returned compared with the quantity originally received. Each return creates its own Reversal entries.

• If a Landed Cost invoice has already been posted for the returned quantity, the corresponding Cost Amount (Actual) is also reversed.

These reversal entries are posted against the return shipment, not the original receipt, using the posting date of the return. They are linked back to the entries they reverse using the Appl.-to LC Entry No. field. The original entry is only closed, with its Closed by Entry No. set, once the total of its reversals covers the whole original amount.

For a "Landed Cost Type" with the Default Cost Treatment, the matching G/L entries are reversed (for expected costs, only when Expected Cost Posting to G/L is set on the "Inventory Setup" screen). For the Charge Item Cost Treatment, a reversing item charge value entry is posted and the cost adjustment is run for the Items concerned.

Cancelling or Correcting a Posted Landed Cost Invoice

To reverse a landed cost that has already been invoiced, cancel or correct the posted purchase invoice in the usual way, using the Cancel or Correct action from the "Posted Purchase Invoice" screen. Business Central creates a credit memo to reverse the invoice, and Clever Landed Costs automatically creates matching landed cost entries to reverse the cost-side postings. For more on posting landed cost invoices see Invoicing Landed Costs.

For every Invoice type landed cost entry on the original invoice line, a corresponding reversing Invoice entry is posted against the credit memo, with the Cost Amount (Expected) and Cost Amount (Actual) values negated. Any G/L entries posted for the landed cost variance at invoice time are also reversed, and the original Invoice entries are closed by the credit memo entries.

Because the original receipt is closed once it has been invoiced, cancelling or correcting the invoice also reopens the receipt entries it closed, clearing their Closed by Entry No. and Closed at Date fields. This allows the landed costs to be assigned and invoiced again.

Posting a Purchase Credit Memo for a Landed Cost Invoice

You can also reverse a posted landed cost invoice by creating a "Purchase Credit Memo" yourself and setting the Applies-to Doc. No. field to the posted invoice. When the credit memo is posted, Clever Landed Costs reverses the landed costs of the applied invoice in the same way as Cancel and Correct: it posts reversing Invoice entries against the credit memo, reverses the variance G/L entries, closes the original invoice entries and reopens the receipt entries.

Note: The reversal covers every landed cost line on the applied invoice in full. If you only want to credit part of a landed cost invoice, check the resulting entries on the "Landed Cost Ledger Entries" screen.

Reviewing Reversals on the Landed Cost Ledger Entries Screen

Open the "Landed Cost Ledger Entries" screen to review original and reversing entries side by side. The following fields are the most useful when investigating a reversal.

Important Notes

Note: Undoing a receipt is only possible before a Landed Cost invoice has been posted against it. Once an actual cost exists, use a Purchase Return Order instead.

Note: Reversal entries are always created in addition to the original entries. The original entries are never deleted, so the full history of a landed cost remains visible on the "Landed Cost Ledger Entries" screen.