Create Corrective Invoice in Sales Management

Outcome

In the first scenario, a corrective invoice is created. This invoice includes the corrected invoice lines reversed in full together with the new replacement lines. The text 'Corrective Invoice' is printed on the invoice header together with the number and date of the original invoice. The corrective invoice also has a VAT summary box that contains information about the VAT code for both the corrective invoice and the original invoice. The delivery date is retrieved from the original invoice.
In the second scenario, a credit note and a new debit invoice are created. The credit note contains the incorrect invoice lines reversed in full. The debit invoice contains the new replacement lines. Both the credit note and the new debit invoice contain a reference to the original invoice number and date, a VAT summary box, and the delivery date according to the corrective invoice above. However, the new debit invoice does not contain VAT information for the original invoice.

An accounting journal and a customer invoice journal are printed. The original invoice is still open.

Send the corrective invoice – and, in the second scenario, the credit note as well – to the customer or payer. If goods are returned and you have not processed this in M3 BE, do so in 'Customer Return. Open' (OIS390). You can later review the relation between the original invoice and corrective invoice and any credit note in 'Invoice. Display' (OIS350/B). If there is a correction, this invoice is displayed when selecting related option 16='Display credit invoice' for the original invoice.

The following are updated:

M3 Accounts Receivable and M3 General Ledger.
The header of the corrective invoice (and any credit note) is saved in the OINVOH table, whereas the lines are saved in the OINVOL table.
The headers of the new deliveries are saved in the ODHEAD table, whereas the delivery lines are saved in the ODLINE table.
The account entries of the original invoice are reversed in full. If the correction referred to a reduction in quantity, this reduction is posted with accounting rules OI10-951 (Delivered/non-invoiced – credit) and OI10-903 (Fictive inventory (non-inventory) – debit).

Sales statistics

The sales statistics are updated as for any regular invoice. This means that the net effect on the statistics is the difference between the reversed lines and new invoice lines (or, if the second scenario is used, between the credit note and new debit invoice).

Customer orders

The customer order is updated if the quantity on the original invoice was adjusted. The invoiced quantity on the customer order line is reduced, according to the adjustments, and the reduced quantity is updated as the returned quantity. The reserved quantity on the customer blanket agreement is also reduced by the returned quantity if a customer agreement is connected to the customer order line. The customer order line is set to status x9, where 9 indicates that the corrected quantity is not delivered.

Credit card payments

If the original invoice was paid by credit card, the new amounts are credited or debited to the same credit card. A new credit card transaction with transaction type 'Correct/credit' is created.

Multi Unit Coordination (MUC) transactions

MUC transactions are created if the original invoice was adjusted in a way that affected deliveries from different divisions. This means that a reduction in price, quantity, or both, are invoiced internally.

Bonus and commission

New bonus and commission transactions are created if the original invoice was adjusted in a way that affects bonus or commissions, or both, thereby ensuring correct bonuses and commissions.

Before you start

A sales invoice must be transferred to M3 Accounts Receivable and M3 General Ledger. The invoice cannot be an advance invoice.
The invoice lines to be corrected must have one of these information types:
- 31 (Gross total per order line)
- 35 (Order total discount)
- 60 (External charge per delivery and charge ID)
- 65 (Service charge per delivery)
- 67 (External item charge).
If the original invoice contained errors concerning VAT, such as an incorrect VAT registration number, the basic data for VAT must be corrected.
The customer order to which the original invoice refers must not be archived. If the original invoice is a summary invoice, none of the customer orders can be archived.
You have defined settings for 'CO Invoice. Correct or Credit' (OIS380) on the P panel.

If the correction refers to a kit item, these conditions must be met:

To change a quantity that originates from the header of a kit item, the reservation level must be set to 1-'Kit no level' on 'Product Structure. Open' (PDS001/G).
To change the price or discount that originates from the header of a kit item, the pricing method must be set to 1-'Cost price' or 2-'Price hierarchy' on (PDS001/G).
To change the quantity that originates from a detail line of a kit item, the reservation level must be set to 2-'Material level' on (PDS001/G).
To change the price or discount that originates from a detail line of a kit item, the pricing method must be set to 3-'Line value/quantity' on (PDS001/G).

These settings are optional:

A 'Corrective invoice series' can be specified on 'CO type. Open' (OIS010/K) to be used as the default number series for corrective invoices. If no corrective invoice series has been specified, the invoice number for corrective invoices will be based on the 'Invoice series' field, specified on (OIS010/K).
The 'Not for debit invoice' check box can be selected if the corrective invoice series should not be used for the new debit invoice created when using 'Corrective mtd' 2-'Credit and reinvoice' in 'Invoice. Correct or Credit' (OIS380) to correct a debit invoice. When the check box is selected, the corrective invoice series is only used for the reversal of the original invoice, the credit note. The invoice number for the debit invoice is instead based on the invoice series.
Note: If the original invoice is a credit note the same logic applies. If the check box is selected, the corrective invoice series is only used for the reversal of the original credit note, the debit invoice. The invoice number for the new credit note is instead based on the invoice series. This means that the corrective invoice series on a credit order type should be a number series used for debit invoices and the invoice series should be a number used for credit notes.
Reason codes can be defined in 'Finance Reason Code. Open' (CMS103), where the field 'Reason type' must be set to 1–'Corrective invoice'. For each code, a text can be specified in different languages using F6='Text'.
Activate application message type 475-'Correction/crediting of invoice ready for submittal' in 'Settings – Application Messages' (CRS424).
Set object control parameter 'Correct/Credit MSG' in 'Available Object Ctrl Parameters. Open' (CMS016), which is connected to 'Correct/Credit Msg Recip Selection. Open' (OIS385). Define the recipients of application message type 475 in (OIS385).
Note:
- If the price printout method selected for the customer on 'Customer. Open' (CRS610/H) is 2, 3, or 4, the corrective invoice automatically uses price printout method 5 instead.
- The corrective invoice is not item oriented even if the original invoice was an item oriented summary invoice.

Follow these steps

Initiate generation of corrective invoice

Start 'Invoice. Display' (OIS350).
Select a sorting order and specify a facility and year.
Identify the original invoice and select option 14='Correct/Credit' for the invoice to start 'CO Invoice. Correct or Credit' (OIS380).

If the original invoice has already been corrected by a corrective invoice that now must be corrected in turn, you still specify the original invoice number. M3 BE automatically recognizes that a previous invoice exists and displays the corrected transactions of the previous corrective invoice together with the uncorrected transactions of the original invoice in (OIS380).
Optionally, on the B panel, specify a customer order number or delivery number, or both, to filter the displayed lines.
Select which corrective method to use.
Review the invoice and accounting dates and change them, if necessary.

The current date is proposed as default. The invoice and accounting dates for the original invoice are also displayed for informational purposes.
Specify a new TAX rate date or select the 'Orig Tax_rt dt' check box if you want to use the date from the original invoice.

The TAX rate date determines which date to use when selecting a TAX rate for the new invoice lines. The original TAX rate is always used for the reversed invoice lines.

If you select the check box and the invoice is a summary invoice, different TAX rate dates can be used for different customer orders.
Select the 'Subtotal' check box if you have selected corrective method 1 and want subtotals to be printed on the corrective invoice.
Select the 'Negative sign' check box if you have selected corrective method 1 and want negative amounts and quantities to be printed with a negative sign on the corrective invoice.
Select the 'Select all' check box if you want all displayed invoice lines to be included in the correction.
If required, select a finance reason code to be printed on the credit invoice printout.

Note: If the desired finance reason code is not available, additional codes can be set up in 'Finance Reason Code. Open' (CMS103).

Create corrective invoice for specific invoice lines

Select option 2-'Corr transaction' for the invoice line that needs to be adjusted.

The invoice lines are sorted on customer order number, delivery number, and information type. In other words, charges and discounts are not displayed together with the quantity and price. However, you can use the 'Details' field to identify which charges and discounts that belong to a certain invoice line.

Internal discounts are not displayed.
Select one of these alternatives:
- Change quantity, price or discount, or both price and discount, for an invoice line
- Change charges
- Change total discount or invoice discount

Change quantity, price or discount for an invoice line

On the E panel, where the original invoice line is displayed together with what is the new invoice line, review the displayed information.
Make the necessary adjustments on the correcting invoice line. Select F16='Approve'.

When you change quantity, price or discount, the new line amount is recalculated automatically.

Note that you can change the price even if it is not allowed according to the customer order type. You can also change the discount even if it is not allowed according to the discount model.

The change also initiates an automatic recalculation:
- Line charge = Calculation factor multiplied by new base (the base depending on quantity, price and discount)
- VAT = VAT rate multiplied by new VAT base (due to changed line amount)
- Total discount and invoice discount = Calculation factor multiplied by new base (the base being the order total gross or net).

Change charges

On the E panel, where the original invoice line is displayed together with what is the new invoice line, review the displayed information.
Make the necessary adjustments on the corrective invoice line. Select F16='Approve'.

If you change an order charge that has been created with a calculation method that uses a factor and not a price (in other words, the calculation method does not equal 0), then all invoice lines are automatically selected and included in the correction for a correct recalculation to take place.

Change total discount or invoice discount

On the E panel, where the original invoice line is displayed together with what is the new invoice line, review the displayed information.
Make the necessary adjustments on the new invoice line. Select F16='Approve'.

The total discount percentage and the invoice discount percentage can be changed even if it is not allowed according to the discount model.

When you change the total discount or invoice discount, all invoice lines are automatically selected and included in the correction in order for a correct recalculation to take place.
Return to option 'Correct transaction' to make further adjustments. Otherwise, press Submit and then F3.

Two-step process for verification of corrective/credit invoice

Note: A two-step process for verification of corrective/credit invoice means that one user makes the changes and another user reviews the changes and submits the invoice. In such a process, it may be useful to send application message 475-'Correction/crediting of invoice ready for submittal' to the user who should review the changes.

Use function key F16='Send App MSG' to send application message 475 to another user (or group of users).
The other user selects related option 11='Open' in 'Application Message. Open' (CRS420) to open (OIS380) for the invoice in the message.

Submit the invoice

Select one of these alternatives:
- Function key F14='Submit' to submit the invoice in batch.
- Function key F15='Interactive' to perform interactive invoicing.

Limitations

If Vertex or AvaTax is used for tax calculations 'CO Invoice. Correct or Credit' (OIS380) is restricted to corrective method 2 and either 'select all' or 'credit all' must be selected.
It is not possible to prevent mismatch in M3 if customer geocode/address was changed since the original invoice was issued. The crediting uses the same tax rate date that was used on the invoice that is being corrected, but changed settings can cause AvaTax or Vertex to make a different tax decision, resulting in a credit that differs from the invoice that is being corrected.

Cash Desk

Select the 'Cash dsk active' check box on the settings panel (OIS380/P) and use F15='Interactive' to perform interactive invoicing. 'Cash Payment. Open' (OIS215) is opened automatically if 'Cash payment' is set to '2' on the payment terms for the customer order in 'Payment Term. Open' (CRS075).

Parameters to set


Program ID/Panel	Field	The field indicates …
(OIS380/B)	Corrective method	…how to create a corrective invoice. Alternatives 1 = A corrective invoice is created for one or several invoice lines in the original invoice. The corrective invoice displays the reversed invoice lines and the new replacement invoice lines. A reference to the original invoice is printed on the invoice. 2 = Corrective credit note and new debit invoice. The selected original invoice lines are fully credited by means of a credit note. The new debit invoice includes the corrected invoice lines. Both the credit note and the new debit invoice have a reference to the original invoice.
(OIS380/B)	Negative sign	… whether a negative sign (or actually a reversed sign) should be printed for the quantities and amount on the reversed lines on the corrective invoice. This check box is only applicable if you have selected corrective method 1.
(OIS380/B)	Subtotal	… whether subtotals are printed on the corrective invoice. A subtotal is the difference between the original line and the new replacement line. This check box is only applicable if you have selected corrective method 1.
(OIS380/B)	Select all	… whether all lines belonging to the invoice or matching the specified customer order number or delivery number, should be included in the correction. You select this check box in these cases: a) When the basic data for TAX is changed and all lines are affected by the change. This can be the case if there was no TAX registration number connected to the customer when the original invoice was created. b) When the total discount factor, the invoice discount factor, or the order charge calculation factor needs to be changed, since all the lines are the basis for the calculation of the discounts and charges.
(OIS380/B)	Credit all	… whether all lines belonging to the invoice or matching the specified customer order number or delivery number, should be submitted for complete crediting. No further corrections can be done to the invoice once 'Credit all' has been used.
(OIS380/B)	Finance reason	… the reason for the transaction. The reason codes are maintained in 'Finance Reason Code. Open' (CMS103) where the field 'Reason type' should be set to 1 – 'Corrective invoice' for customer orders. For each code a text can be specified in different languages through standard text functionality (F6). The text connected to the finance reason code is printed on the invoice document in the customer's language and the finance reason code is updated as additional information 257 on the customer invoice in Accounts Receivable.