“Purch. Credit Memo Account Is Missing in General Posting Setup” Error in Business Central

 Problem Statement

While cancelling a Posted Purchase Invoice using Cancel in Microsoft Dynamics 365 Business Central, the system throws the following error:

Why This Error Occurs

When you cancel a posted purchase invoice, Business Central internally creates and posts a Purchase Credit Memo.

For this posting to succeed, the system must know which G/L account to use for purchase credit memo postings for the specific combination of:

• General Business Posting Group

• General Product Posting Group

If the Purch. Credit Memo Account is not defined in General Posting Setup, the posting fails.

This is standard Business Central behavior.

How to Fix the Issue (Solution)

Search for General Posting Setup

Fill “Purch. Credit Memo Account”

• Find the column Purch. Credit Memo Account

• Enter a valid G/L account number

  • Typically, the same account used in Purch. Account, or

  • A dedicated Purchase Returns / Credit Memo account, based on accounting policy

Once the field is filled, save the page.

• Go back to Posted Purchase Invoices

• Select the invoice

• Click Correct → Cancel

The credit memo will now be created and posted successfully, and the invoice cancellation will complete without errors.

Important Notes / Best Practices

• Always ensure Purch. Credit Memo Account is filled for all active posting group combinations

• This setup is required even if purchase credit memos are rarely used

• Missing posting accounts often surface only during corrections or cancellations

Thanks For Reading...!!😊

Regards,

Khushbu Rajvi