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Microsoft Dynamics GP (Archived)

Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

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Posted on by MichaelC 1,761

In reviewing the Dynamics GP documentation, it would appear that the correct way to update Standard Costs would be to use the Inventory Year End Process to update the cost to the inventory cards.

 

However, in reading a recent  post, it makes me wonder if I am missing something.

(Post Reference:  http://blog.mygpcloud.com/2012/01/standard-cost-inventory-valuation-in-dynamics-gp/

 

This thread makes me think that Dynamics GP does not create a GL entry for the YE Standard Cost adjustment. IN testing, I ran the process and the system generated an adjusting JE for the Standard Cost update.

 

I am in the process of implementing a Standard Cost Inventory (with Landed Costs) and must admit that I have rarely had to do this and looking for any guidance that might be out there.

 

What is the proper process for updating Standard Costs for a company?

How often can you run the Standard Costs update process?

Feedback on this would be greatly appreciated.

Much thanks,

Michael Cryer

*This post is locked for comments

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    I just spent all day today working through effects of changing inventory from FIFO Perpetual to Average Perpetual.  Now I can add non-Mfg standard cost adjustments to the stable....However, I am not getting a good HITB report.  More research!

  • Jeff Coates Profile Picture
    Jeff Coates 50 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    I removed MFG from the set file in the Hyper-V image.

    Adjusted the standard cost of CHAIR from 81.39 to 91.39. There are 50 on hand to start so the GL adjustment  is a $500.00 increase in value as expected. This is also in the HITB report.

    Next I created a decrease IV adjustment for -2 items. The transaction is for -182.78 (new std cost).

    HITB report total is now 48 on hand with a total value of 4,386.72

    That means the HITB unit cost is 4,386.72 / 48 = 91.39. So HITB is correct. It is very strange to see the IV10200 cost layer for this item (1 receipt) different from the standard cost extended value in HITB.

    I guess I am used to seeing Manufacturing with standard costs or else perpetual valuations when no manufacturing is being used.

    Thanks for helping me think this through.

  • Bron Profile Picture
    Bron 4,887 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    Wouldn't HITB use the standard cost from the Item Maintenance Screen for the report and tying out to GL?

    I wasn't surprised the IV10200 tables don't get updated - they don't get updated if you perform a standard cost roll in manufacturing environment either.

    I think GP (if item is periodic) will simply use the value of standard cost from item maintenance when the transaction is posted. If HITB uses the same value - shouldn't everything tie out?

  • Jeff Coates Profile Picture
    Jeff Coates 50 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    Thanks for the reply Richard - That table does not exist in the company database without MFG installed.

    I tested a IVADJ transaction and the cost used for the IV and GL entries is the new standard cost from the IV00101 not the cost in IV10200.

    This mismatch causes the HITB report to be out of balance. HITB values the items at the original standard cost not at the cost after the update utility. That is a bad scenario. HITB and IV10200 at the previous cost and transactions at the new standard cost.

    I am going to test in the Fabrikam company using the Microsoft provided Hyper-V image next.

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    Wait a minute...is the ICIV0323 table maintained for non-manufacturing sites??  In Mfg for sure this is the table used to get the cost components to post to GL, Cost of Sales, etc for standard cost items.  If that table is in place, then the recalculated standard costs should be taken from here and life will be great.

  • Suggested answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    Ouch, that is not good.  The old layers will be sold at the old standard cost even though GL has been adjusted.

  • Jeff Coates Profile Picture
    Jeff Coates 50 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    I just tested a single standard cost item and the new GP 2013 utility. The utility did adjust the standard cost in IV00101 and create a GL entry for the difference. However, the cost layers in IV10200 were not updated. They have the same UNITCOST and ADJUNITCOST after the utility as before the utility.

    That does not seem to be the desired behavior for the utility. Any ideas on why my system did not update the individual cost layers?

  • Verified answer
    Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    I have tested GP 2013 without mfg.  NEW in 2013 is a utility to modify the standard cost of items.  It not only updates the standard cost but also creates the needed GL transactions to keep everything in balance.

    Prior to version 2013, updating standard costs without manufacturing was extremely difficult.  You needed to manually calculate the standards, make sure your current stock status balanced to GL, push the new costs into inventory with SQL updates, re-calculate the stock values, then manually create a transaction in GL to adjust the values.  And if you had more than one Inventory Asset account........oh my.

    And, as of this date, Landed Costs do not affect standard cost unless you manually add them to the revaluation amounts.

  • Suggested answer
    Dan Liebl Profile Picture
    Dan Liebl 7,320 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    You stated you are implementing std costs.   Is this in GP 2013?  Are they also using Mfg?  Prior to GP 2013, and with no Mfg modules loaded, Std cost did not create the GL entry as you have heard.   I have not tested in GP 2013 without Mfg as I always install GP with Mfg loaded, so it is hard for me to run a test.  I run across few customers that do not have Mfg and Std cost so it is not worth my time.  

    As far as the process for updating standards, some do it annually, some qtrly, and some monthly.  My personal view is if it is monthly, you may as well use actual cost.    

    With regard to Landed Costs, the rollup of standards does not (or has not in the past) take into account any Landed Costs, so any landed cost added, creates a variance upon receipt.   I would test this heavily in 2013.  You could inflate the standard cost to account for the landed cost and and enter your landed cost accounts so the variance at the GL level is limited.  

    Hope this all helps!

    Dan Liebl, CMA CPIM | Senior Consultant | OTT,Inc | DLiebl@OTT-inc.com

  • Suggested answer
    Josh P Profile Picture
    Josh P 2,895 on at
    RE: Inventory - Best way to update Standard Cost (Non-Manufacturing Environment)

    Hi Michael,

    Please check out this post, and see if it answers your question:

    community.dynamics.com/.../49312.aspx

    Thanks,

    Joshua Pelkola

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