Canceling the invoice failed because of the following error: Reason Code must have a value in Sales Header.

This error is encountered in Business Central because the system requires a Reason Code to be specified for the Sales Header when processing a credit memo (created as part of the invoice correction process). When it's not provided, the cancellation process fails.

Here’s how to resolve the issue:

1. Search for Reason Code and add one Reason code like below.

2. Set the Reason Code as Default Reason Code on Sales & Receivable Setup.

3. Now Retry the Cancellation Process:

After assigning a reason code, attempt to cancel the posted sales invoice again. We would be able to Cancel the existing Invoice with Credit Memo and it will create New Sales invoice.

Happy Reading....