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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Wrong Cost in Sales In...
Microsoft Dynamics GP (Archived)

Wrong Cost in Sales Invoices

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Posted on by Punugu Venkata Nali... 1,780

Hi!

I have a strange problem. Client is using Back Orders whenever there is no stock and transfers to Sales Invoice once the stocks received. Some times due to their business needs they override stocks to go negative and process the Sales Invoice. The issue here is when they post the Invoice, GP is showing Cost which is abnormal for Eg. if the cost of the Item suppose to be $0.10, GP is showing say $1.40.  They are using Average costing.

Any idea how does GP calculates Average Costing in GP 10 especially when we override quantities? Does anyone experience such issue before?

Regards,

Mohan

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  • Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    Re: Wrong Cost in Sales Invoices

    I know ABSOLUTELY what is happening.  Average costing and over selling (quantity on hand going negative) is the real problem.

    Here is an example:

    You buy 10 of item X at 1.50.  This is the first transaction for the item.  The average price is set to 1.50

    You sell 10.  The average price is 1.50 on this sale.

    You order 50 more at an average price of 1.00 but they have not been received.

    You sell 25 and invoice them BEFORE RECEIVING THE NEW ITEMS.  The average cost used is the 1.50 from the tables as the average cost is not updated until you receive the next batch.

     

    Average Cost is not recalculated until inventory is RECEIVED.  When that happens, the system multiplies the quantity on hand by the current average cost.  The new quantity received is multiplied by the new purchase cost.  These two products are added together and divided by the total number of pieces on hand (original quantity plus received quantity) to yeild the new average cost.

     

    The GP costing methods are documented well in our Inventory Management book and discussed again in the Understanding POP and Understanding SOP manuals.  You may want to get copies of those.  Visit our web site below.

  • Punugu Venkata Nalini Mohan Profile Picture
    Punugu Venkata Nali... 1,780 on at
    Re: Re: Wrong Cost in Sales Invoices

    Hi!

    I'll check manuals as well as whether system is taking standard cost.

    Some transactions it is taking even negative cost, not sure whether anyone experience this before.

     Regards,

    Mohan

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    Re: Wrong Cost in Sales Invoices

    Hi, could be wrong here, but it might give you aquick fix, and I don't have time ot investigate at the moment. Check what the stardard cost recorded against the item on its item card is? GP may be taking the cost from here when you have zero items in stock.

    Also, in the inventory on line manual, there is a section that describes how costs are allocated / calculated.

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