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AX2009 Inventory Model Group Set up As Fifo , Cost Price ( Include Physical Value box should be check or uncheck )

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Ax2009 are converting to Std cost and have few items of exp items, and setting up as Fifo inventory model group

for cost price should the Include Physical value box should be check or uncheck ,

can some one please help with this question,

we have go live this weekend and have to finish set up by tomorrow,

I have read some where , it says it should be checked, but FiFo , First in first out,

since we going std Costing, these exp items we are using this model group is exp items

each item is different cost, if first in first out will apply , than will not work , because as I sais in this same item might have

different cost

for example item 10019071 we have as exp item and Model group FIfo

Cost $ 5.00 for 5 Pcs

for next 10019071 $150.00 1 pcs

how this will work if we check the box', we don't want to average the cost either , would like to go out as serial # cost

any help will be appreciated

thanks in advance

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Fredrik Sætre 12,644 on at

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AX works best when doing physical updates as far as I know. As it gives better book keeping balances.

Physical updates post a balance transaction where you can track what is only physically updated. Physical cost is a best guess cost that is posted at the time of receipt (like receiving purchased goods).

The Financial transaction is done when the financial fact is available. Like the vendor invoice. This is more accurate and can differ from your physical transaction. Could be due to many factors like actual increase of price from vendor, currency changes or freight charges being different or added.

We do inventory closing to adjust for these differences...

FIFO pulls all these transactions through for all items in the supply chain and posting to the already used accounts. Standard cost works the same way, but post discrepancies to an offset account instead of carrying it trough.

What happens is that it looks at open transactions and marks it against the corresponding transaction. Incoming vs. Outbound. Chronologically...

Weighted average sums up all inbound transactions, divide by number of transactions, finds an average and adjusts the outbound transactions accordingly.

You can manually mark transactions to directly match a receipt to an issue to override the chronological automatic marking. You can mark them directly or use serial numbering for an operational marking of purchases to sales. I would suggest you do this for the type of "miscellaneous" items that vary a lot in price.

Posting physical means you will have to set up issue and receipt accounts. It is an interim posting until you get the correct amount...

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Community Member on at

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thanks for Reply Fredrik

I am kind of confused,

de we check the box in Inventory model group

Include Physical value box Check or uncheck for Fifo ( exp items

what's the best practice the keep the box check or uncheck ?

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André Arnaud de Cal... 301,020 Super User 2025 Season 2 on at

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Hi Bitia,

You aren't telling you are going life and needs to complete the setup, untested? This is asking for unexpected issues. You would probably tell that you will test the coming days, but that is too short to test every details of a choice related to inventory costing.

The question cannot be answered as you haven't told of the expense items are setup to be stocked or not and if you are using items or service items. Also are the transactions related to purchases, sales, projects or production orders?

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Fredrik Sætre 12,644 on at

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Wasn't the "stocked product"/"Expence item" feature on the inventory model group introduced in AX 2012? AX 2009 will post transactions to inventtrans no matter what type of item and will thus be able to do the cost allocation properly.

But yeah... as André sais: Test it!

And include physical posting values for costing items to have a better control with your inventory costs before actual costs (financial) are available.

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André Arnaud de Cal... 301,020 Super User 2025 Season 2 on at

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Fredrik is correct about the "Stocked product" option. That is not available in AX 2009.

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Hi Andre

sorry for not making it clear, its exp item, its generic items created to purchase the mat against these items and issued to Project, each items could be at different cost, but this generic item 10000000 used with serial # to receive it and issued to project

this item is not stocked , its just receives and issued to project using this item #

all the other items are std cost, just these generic item set up as Fifo as inventory model group

we were told for regular std cost donot need to do month end procedure , but these exp items need to run month end procedure , is this correct ?

other question

inventory model group

include physical Value box should be check or Uncheck ?

can you please help me with this

I really appreciate the help

thanks in advance

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Fredrik Sætre 12,644 on at

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You need to do month end closing... Even for standard cost items.

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Hi Fredrik

as per our consultant , if we switch to Std costing method, we don't need to do month end procedure, and you stated above, we still need to do month end closing with std, is there any document shows that we need to month end closing, because I have to discuss with other people, and , this is so confusing ?

can you please help . I still have not got answer for original question ?

include physical value ( INVENTORY MODEL GROUP FOR FIFO SHOULD BE check or uncheck )

thanks

may be question is no clear yet.

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André Arnaud de Cal... 301,020 Super User 2025 Season 2 on at

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Hi Bitia,

For standard cost in AX2012 you don't have to use the month end closing. However for AX 2009 you have to do it. So Fredrik is correct in his statement. EDIT: This statement is not correct; see next reply.

As you have the expense item which will be consumed to project costs, personally I would not enable the Include physical value tick box. It will be expensed only at time of posting the purchase invoice. But test the scenarios well and verify the ledger transactions if the customer can understand what is going on.

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André Arnaud de Cal... 301,020 Super User 2025 Season 2 on at

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PS you can download the AX 2009 Inventory cost whitepaper to get an understanding how AX posts the inventory cost als during the closing. www.microsoft.com/.../details.aspx

Also I was confused in my previous reply: For the standard cost you do not have to run the Inventory closing. These items are skipped. My apologies, for AX4 you need to run closing for standard cost. As of AX2009 a new standard costing was introduced. But you need to run the closing for the expense items.

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