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GL Posting of Project Transaction type: "Item"

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Posted on by ZvikaR

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Hi All,

When I invoice a purchase order into a project or use a Project Item Journal to consume inventory into a project, and if the Project Group is set to journalize into "Balance Sheet", I get the following ledger posting, for the cost of the item:

1. Credit: Inventory Issue (this is controlled by the inventory posting profile)

2. Debit: Project - Cost

3. Credit: Project - Cost - Item

4. Debit: Project - WIP cost - item

What is the purpose of posting (2) and (3)?

I think that all I need from accounting purposes is an issue from inventory, and posting into project - WIP, so the 2 lines in the middle seems redundant.

Anyone knows what purpose they serve, what business scenario they are useful for?

Is there a way to stop these posting

These 2 redundant posting are only with Item type transactions. For Hour / Expense transactions you effectively get only lines (1) and (4).

Zvika

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Ludwig Reinhard Microsoft Employee on at

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Hello Zvika,

The only explanation that I have for those additional two lines is allowing users to separate project costs from project item costs. Never needed this but this could be an explanation. Also the reconciliation with the inventory value and identifying differences between ledger and inventory balances can become a bit easier through this extra postings. Yet, that's only my perspective. Don't have an official explanation or documentation from MS why we have this extra posting. Maybe other community member have?!

Best regards,

Ludwig

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ToddB Microsoft Employee on at

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Hello Zvika,

I was able to find out the below:

Setting “Post costs – item” to 'Balance' will post to both Project - WIP cost - Item and Project - cost - item. That is expected. As alternative, if setting “Post cost -item” to 'Profit and loss', then it will only post to Project – cost.

Project - cost and Project – cost - item cancel out each other and the transaction is actually posted to WIP.

This posting is working according to design and doesn’t impact Project statements. You can also go to Project statements to verify the transaction posted to WIP.

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ZvikaR 190 on at

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Thanks Todd for your answer, and for confirming the behavior.

Yes, I get a credit and debit transactions technically cancel each other, but both transactions are still visible on the ledger and generate a lot of clutter. Accountants hate clutter.

It ends up an awkward explanation I have to provide to a CFO of a B$ company, that their "digital transformation" "next generation" supposedly sophisticated Dynamics ERP creates clutter transactions with no accounting need or reason, and that there is no out of the box way to make it stop.

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ToddB Microsoft Employee on at

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HI Zvika,

If you get a chance, please create an entry on the Ideas Portal in regard to this; and post a link on this thread so others can vote for this:

ideas.dynamics.com/.../

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