Best practices in inventory closing in Microsoft Dynamics 365 Finance and Operations

Best practices in inventory closing in Microsoft Dynamics 365 Finance and Operations

Let us understand concepts with basic questions What/Why and sharing tips/best practices

What?

• Issue and receipt settlement
• Arriving of accurate inventory cost
• Inventory Cost propagation
• Based on costing method, marking (actuals)
• Posting of cost adjustments into General Ledger

Why?

*Point of no return - inventory closing

true up and accurate COST

Tips/Best practices:

• Check open quantities
  • Use report
  • Review open inventory transactions
  • Shipped but not invoiced - sales orders
  • AR to Invoice
  • Received but not invoiced - Vendor
  • AP to Invoice
  • RAF Reported as finished - Production orders
  • If nothing needs to be consumed or corrected then end production order
  • Open inventory journals
  • Review and close them
• Check cost prices
  • Use report
  • Review cost price deviations
  • List of transactions which deviate from the cost price and min. % deviation threshold
• Transaction Adjustment
  • Last minute cost price adjustment
  • E.g. RMA cost….etc
• Close
  • Typically end of every month (e.g. June 30 2020)
  • Calendar date for execution could few days in new month (e.g. July 03 3030)
• Reconcile
  • inventory sub-ledger and general ledger