The Business Central document that corrects or refunds a posted sales invoice, reversing revenue, VAT, and the customer balance.
A Sales Credit Memo in Business Central reverses all or part of a posted sales invoice. Posting it creates a posted credit memo, a customer ledger entry that credits the customer's balance, reversed VAT entries, G/L entries, and, if items are returned, positive item ledger entries bringing them back into stock.
The fastest paths start from the posted sales invoice itself: the Cancel action creates and posts a corrective credit memo applied to the invoice in one go, Correct additionally recreates a new draft invoice, and Create Corrective Credit Memo gives you a draft to edit first. These actions are only available while the invoice is unpaid and not yet applied.
For manual cases, you create a new Sales Credit Memo and pull in the original lines with Copy Document or Get Posted Document Lines to Reverse. The latter supports exact cost reversing, so returned items come back at their original cost (there is an Exact Cost Reversing Mandatory switch in Sales & Receivables Setup). Setting the Applies-to Doc. No. to the original invoice closes both entries against each other at posting.
If the customer has already paid, the posted credit memo stays open on the customer ledger: you can apply it to future invoices or pay it out as a refund through the payment journal. For returns that need a physical receiving step, a Sales Return Order handles the logistics and produces the credit memo at the end.
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