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Invoicing Sales Orders - Multiple Lines under Direct Cost GL Entry

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Posted on by Sunny Rupabhinda

While posting Sales Order Transactions, the preview posting tab shows additional items classified under Direct Cost, additional calculations along without any relevant description for us to understand how those numbers are calculated.

It appears that there is some back end calculation that is taking place.

Is this caused by the Item Costing Method?
Is the count of lines directly proportional to the dependent item receipt/purchase records associated to the item in question?
Is there a Best Practice to prevent these lines from showing up, or is there any setting that we're missing, leading to these calculations?

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Dynamics 365 Business Central

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Holly Huffman 6,538 Super User 2025 Season 2 on at

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Hi there! Good morning, evening, or afternoon - depending on where you are :) Hope you are well today!

This issue with multiple lines under Direct Cost G/L Entry during sales order invoicing is likely influenced by several factors, including the item costing method, inventory setup, and posting configurations. Here's a detailed breakdown:
1. Is this caused by the Item Costing Method?

Yes, the item costing method can impact how costs are calculated and posted. Costing methods like FIFO, LIFO, or Average determine how the cost of goods sold is calculated, which can result in multiple G/L entries for Direct Cost.

For example, if the costing method tracks individual receipts or layers, each receipt may generate a separate G/L entry during invoicing.

2. Is the count of lines directly proportional to the dependent item receipt/purchase records?

Yes, the number of lines is often proportional to the item receipt or purchase records. Each receipt or purchase transaction creates a cost layer, and these layers are reflected in the G/L entries during invoicing.

If an item has multiple receipts or purchase records, the system may generate multiple Direct Cost entries to account for each layer.

3. Best Practices to Prevent These Lines or Adjust Settings

Automatic Cost Posting: Review the Inventory Setup and consider disabling "Automatic Cost Posting" if it's enabled. This can reduce the number of G/L entries by consolidating postings.

General Posting Setup: Ensure that the Direct Cost account in the General Posting Setup is correctly configured. Avoid using the same account for purchases, inventory, and Direct Cost Applied.

Cost Consolidation: If possible, consolidate cost layers by running inventory recalculations or inventory close processes regularly. This can reduce the number of layers and associated G/L entries.

Source Code Field: Personalize the posting preview page to include the Source Code field. This can help you understand the origin of each G/L entry and identify unnecessary calculations.

Customizations: If the standard functionality doesn't meet your needs, consider developing custom logic to consolidate or simplify G/L entries during invoicing.

Additional Resources
You can find more insights on managing Direct Cost G/L entries and inventory costing in Dynamics 365 here and here.

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YUN ZHU 95,739 Super User 2025 Season 2 on at

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Hi, hope the following helps as well.

https://community.dynamics.com/forums/thread/details/?threadid=a81ced26-387a-4fe6-b817-10e6f0c1cc91

Thanks.

ZHU

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Khushbu Rajvi. 20,612 Super User 2025 Season 2 on at

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Hope this helps as well:https://community.dynamics.com/forums/thread/details/?threadid=78aceb42-6c36-4ede-bd57-aa759935125b

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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Hello,

Unexpected entries in the Direct Cost section while posting Sales Order Transactions in Business Central can be influenced by the item costing method (like FIFO, LIFO, or Average), which affects how costs are calculated and posted.

The number of lines is often proportional to the item receipt or purchase records.

To manage this, consider disabling "Automatic Cost Posting" in Inventory Setup, ensuring the Direct Cost account in General Posting Setup is correctly configured, and running inventory recalculations or close processes regularly to consolidate cost layers and reduce G/L entries. Further investigation into your setup may be needed if the issue persists.

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Mansi Soni 8,909 Super User 2025 Season 2 on at

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Hello, The additional Direct Cost lines in the posting preview are due to the Item Costing Method (e.g., FIFO, Average), which tracks cost layers based on item receipts and purchase records. Multiple cost entries appear when items are received at different costs, reflecting Business Central's cost tracking mechanism. To manage this, ensure Automatic Cost Adjustment is set to "Always" in Inventory Setup, run the Adjust Cost - Item Entries batch job regularly, and review the Direct Cost Applied Account in General Posting Setup.

https://learn.microsoft.com/en-us/dynamics365/business-central/inventory-how-adjust-item-costs

Hope this answer will help you!

Regards,
Mansi Soni

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Vahid Ghafarpour 12,170 Super User 2025 Season 2 on at

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