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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Production Ending over...
Microsoft Dynamics AX (Archived)

Production Ending over Closing period (GL)

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Posted on by Richard Wehmeyer 1,004

We are running into a situation that I cannot see what is clearly happening.  We use FIFO for inventory costing and sometimes the RAF and inventory consumption and closing period happen before the ending of the production order.  What is happening to the accounts?  Inventory transactions show cost at RAF but none at transfer or consumption.

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  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Production Ending over Closing period (GL)

    Hello Richard,

    If your accounts show the costs at the RAF value posted in your balance sheet everything should be fine. What problem do you see?

    Ludwig

  • Richard Wehmeyer Profile Picture
    Richard Wehmeyer 1,004 on at
    RE: Production Ending over Closing period (GL)

    I'm not too sure yet.  I don't have access to the balance sheet and those in finance have dificulty relating a transaction in the GL to a transaction in Inventory.  I tend to be the person who tracks these kind of things down.  

    My worry is that the money has moved from WIP to inventory and is stuck there without going to COGS.  Without a costed consumption inventory transaction with cost going to COGS how can I find out if it made it there at all to COGS?  

    We have had many instances where the inventory GL account and inventory cost (value)do not match.  Trying to track the errors down is a pain.

    Edited for clarity

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Production Ending over Closing period (GL)

    Hello Richard,

    I think the inventory value and the production balance reports available in the production module might help you with your reconciliation. But yes, reconciling the whole stuff especially if Errors occur can be quite painful.

    One more question in regards to the COGS you mention. Why do you want to see a COGS posting that affects your financial result? I mean if you are producing an item you record the finished product on the debit side and include it in your balance sheet. On the credit side you typically record the stock reduction of raw materials also on balance sheet accounts. If Labor and other indirect costs arose you typically also record them on the credit side but have offsetting COGS accounts so that the Overall effect on your company's income Statement should be 0. Did I miss something that makes you worried from an accounting perspective?

    Ludwig

  • Richard Wehmeyer Profile Picture
    Richard Wehmeyer 1,004 on at
    RE: Production Ending over Closing period (GL)

    Forgive my wording as I have a less than rudimentary understanding of accounting (I am only familiar with how money moves in chart of accounts and where it should be) but what I expect from a perfect run would be:

    1. production order started and picked/routed - money moves from inventory and payroll allocation into WIP

    2. Production ends - Money moves from WIP into inventory

    3. Transfer to site 2 - money moves from inventory XXX-99 to inventory XXX-02

    4. Counting out inventory at site - money moves from inventory to COGS expense acct.

    5. Closing

    I am not worried about the money disappearing just that it in still in XXX-99 inventory and not connected to any on-hand items.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Production Ending over Closing period (GL)

    Hello Richard,

    So you refer to step 3 that makes you worried. Without knowing Details about your setup I cannot see any major issue as a transfer between sites generates a "in-out" ledger posting that allows you tracking financial values.

    Probably try to do a test run in a demo/test environment to ensure that month end procedures won't have any effect on your "money" and that nothing gets lost. If you find something during the test you will know what to look for at month end, otherwise the test might simply allow you sleeping better :-)

    All the best,

    Ludwig

  • Richard Wehmeyer Profile Picture
    Richard Wehmeyer 1,004 on at
    RE: Production Ending over Closing period (GL)

    Not the issue Im worried about.

    That was the perfect scenerio, this is the scenerio I am dealing with:

    1. Production order started and picked/routed - money moves from inventory and payroll allocation into WIP

    2. Production is RAF only - money waits in WIP for ending

    3. Transfer to site 2 - money still waiting for ending

    4. Counting out inventory at site - money still waiting for ending

    5. Closing - no money on item, still in WIP

    6. Production ends - money should go to inventory but there isnt any.  Also since we closed it cant cascade down the transactions into COGS.

  • Richard Wehmeyer Profile Picture
    Richard Wehmeyer 1,004 on at
    RE: Production Ending over Closing period (GL)

    I think I found it.  I found a "potential conflicts inv and GL" report and it seems show that the inventory value is 2100 and GL value is 4500.  I would assume som GL journals are in order?  Thanks for the help, Ludwig.

    1_2D00_28_2D00_2016-1_2D00_25_2D00_20-PM.jpg

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Production Ending over Closing period (GL)

    Hello Richard,

    The report looks pretty good.

    Yet please take one of your colleagues from the accounting department and double check the inventory balance of 4511,18 $ and why it differs from the 2152,99 $ you see at the bottom.

    The variance that the report shows you does not necessarily say that there is a problem, as the report shows you "potential" conflicts. Very often the data shown there can be explained by manual transactions generated during the Go-Live data transfer or other necessary adjustments in GL.

    Best regards,

    Ludwig

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