Reverse project item cost in Microsoft Dynamics 365 for Finance and Operations

Reverse project item cost in Microsoft Dynamics 365 for Finance and Operations

How to reverse item cost on project when the purchased item is returned to vendor in Microsoft Dynamics 365 for Finance and Operations One version

If an inventory is consumed in a project either via item requirements or direct project item consumption and later needs to be returned to vendor, then how could this be achieved in D365FO?

Just by directly creating a PO based credit note for the inventory to be returned to vendor would not load cost reversal effect on project.

However, this could be achieved by first bringing back consumed item on project via project item journal thereby increasing its stock.

This would create postings like

                (Dr inventory account)

(Cr project cost)

Overall the posting would cover

• Project WIP cost item
• Project cost item

&

• Inventory receipt
• Project cost

This is where project sot reversal is happening. Then via PO credit note we would debit vendor.

To ensure this happens smooth ensure ssetup of ledger account for Inventory issue and receipt on item postings and on project ledger posting for cost item and cost value item.

Also, setup in Inventory posting setup – inventory expenditure profit and loss accounts.

Next, we need to create a PO credit note for same item

This would create postings like

Dr vendor

Cr inventory account

On PO negative line invoice posting, below postings are expected

• Purchase accrual
• Purchase expenditure, un-invoiced

&

• Vendor balance
• Purchase expenditure for product

Ensure purchase expenditure for product account to be the same as inventory account which got posted on project item posting.

Thus, the Net effect of combined transactions would

Dr           Vendor

                Cr            Project cost