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Hi All!
We have a client on D365 F&O who wants all their costs to hit their P&L upon receipt, not upon invoice. They need this to be automatic. Their AP invoices are handled by an invoice matching solution (in case this makes a difference for the solution).
I imagine there may be a number of ways to get this to work.
Does anyone have experience of doing this, and which is the most efficient way to make this work?
Thanks!
Good morning EUH,
You can realize what you need with the standard posting framework.
In my home country, there is a specific accounting regulation, which asks for this early P&L cost recognition.
If you want then you can run this method of early P&L cost recognition in parallel to what is commonly known as cost of sales method in international accounting standards.
To get some inspiration how the early cost recognition and the parallel accounting stuff works, you can have a look at the following post: dynamicsax-fico.com/.../
Your situation seems less complex and easier but still, you can use those posts to see what you might to change in the accounting setup.
Best regards,
Ludwig
So you can map "Purchase expenditure un-invoiced" on inventory posting > Purchase order tab with final P&L expense account.
But remember that will get reversed on final invoice.
Hi Ludwig, thank you for your reply.
In terms of the reason, the company puts a lot of emphasis on the P&L, they report on it almost daily to see their position. They consider any receipts as committed and would like to see their exact position in a way that everyone in the business (including non-finance) can understand. Also, their costs are usually on procurement categories so there is usually no stock involved. And when there are physical goods these are not stock-controlled, they usually form part of a service provided, like socks for trampolining which do not need to be returned for hygiene reasons. They are not sold as a separate line. I hope that helps.
As for you suggestion, which is the parameter you are referring to? And in this case what happens when the invoice arrives, usually the accrual is reversed, but here there will be no accrual.
Many thanks
In my opinion , on receipt you already have P& L impact on product receipt as offset of purchase accrual.
Debit Purchase expenditure-Univoiced ( This can be your P&L Account)
Credit Purchase Accrual
This can be enabled from AP parameters and inventory management (Inventory accounting tab) parameters
Hi EUH,
If you post your packing slip into ledger - there is a AP parameter available for that - then you should be able to achieve that.
Before doing that can you elaborate why this would be needed?
Don't you put the items you receive on stock first?
If you post those costs early then there might be a timing mismatch between costs and revenues in case the items are sold in future periods.
To avoid such an issue, it would be great if you could elaborate on the requirement.
Many thanks,
Ludwig
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