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Unit Cost on items incorrect - how to correct

Posted on by Microsoft Employee

About a month ago, we entered and received a PO for 100 qty with a unit cost of 175 each. This was incorrect and was suppose to be 125. We just noticed it was received at the incorrect cost when we attempted to match the invoice.

I thought it would be simple to correct, but it has become more complex. More than 80% of the quantities have been sold (invoiced). A few of those quantities had an in-transit transfer to another site ID with added landed costs.

At this point, our costs are overstated and inventory is overstated. What are my options to correct this so that at least my costs at the GL and Inventory subledger is correct?

I thought about the following:

1. Make an adjusting journal entry - this would only fix the GL , but not the inventory subledger

2. Return all invoices. Adjust the item costs and re-enter invoices again. The only issue I'm not sure is how to handle the items that were transferred with landed costs.

Please let me know if there are other suggestions.

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  • Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 4,029 Super User 2024 Season 2 on at
    RE: Unit Cost on items incorrect - how to correct

    You need to use the Adjust Cost Utility in Inventory Utilities to update the unit cost on the receipt layer.  This will also update COGS on your units sold.  Not sure what effect it will have on the transferred units with landed costs added.  I would analyze all transactions create by the Cost Adjustment prior to posting to GL to make sure the impact is what you want it to be.

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