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Business Central: Apply a Payment or Credit Memo After Posting (Invoice Still Shows Remaining Amount?)

Short answer
Forgot to apply a payment or credit memo before posting? You can still apply it from Customer Ledger Entries or Vendor Ledger Entries. Choose Apply Entries, mark the invoice with Set Applies-to ID, then click Post Application. If you skip Post Application, nothing is applied and the invoice still shows a remaining amount.

Step 1: Open the ledger entries

Open the customer or vendor card and choose Ledger Entries. The steps are the same for customers and vendors.

Select the open payment or credit memo, then choose Apply Entries.

Step 2: Select the invoice, then Post Application

This page works the same way as applying while you prepare a payment or credit memo. There is only one extra step at the end.

1 Select the invoice line and choose Set Applies-to ID. Your user ID appears on the line.
2 Change Amount to Apply if you are applying only part of the amount.
3 Choose Post Application.
Important: the step most users miss
Set Applies-to ID only marks the entries. If you close the page after that, nothing is applied and the invoice still shows a remaining amount. The application is only complete after you click Post Application.

Step 3: Check the Post Application box

A small box asks for Document No., External Document No. and Posting Date.

Your transaction What to do
Same currency The defaults are fine. Click OK.
Foreign currency Check the Posting Date before you click OK. Business Central posts the realised exchange gain or loss on this date.

The posting date defaults to the later date of the two entries. It cannot be earlier than that, and it must be in an open posting period. If the default date is in a closed period, choose a date in the current period. The gain or loss is then posted in the current period.

The gain or loss amount does not depend on this date. It is the difference in local currency between the invoice and the payment. In this example, the USD 1,000 payment is 652.00 and the invoice is 648.82, so 3.18 is posted as a realised loss.

Tip
Document No. and External Document No. are references for the application. Keep the default, or type a note such as "Realised Forex" so the entry is easy to find later.

Applied to the wrong document? Use Unapply Entries

Select the entry in the ledger entries, click the arrow beside Apply Entries and choose Unapply Entries. Confirm the posting date, then choose Unapply.

Be careful with old foreign currency entries
Unapply reverses everything the application posted, including the realised exchange gain or loss. A new gain or loss is posted when you apply again. If the original period is already closed, the reversal is posted in the current period and changes this period's forex figures. Check with your finance team before you unapply a historical payment or credit memo.

If the entry was applied more than once, unapply the latest application first.

Quick Recap

1 Customer or Vendor › Ledger Entries › select the payment or credit memo › Apply Entries
2 Select the invoice › Set Applies-to ID
3 Post Application – do not skip this
4 Foreign currency: check the Posting Date, then OK

Have a question about applying or unapplying entries in Business Central? Drop a comment below — happy to help.

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