Supply chain | Supply Chain Management, Commerce

'Financial Inventory' option at Storage dimension groups

(1) Share

Report

Posted on by bansaripandya

Dear community,

What is the impact in overall Dynamics 365 F&O system, when enable or disable 'Financial Inventory' tick at Storage dimension group?

Thanks!!

Categories:

Dynamics 365 Supply Chain Management

I have the same question (0)

All responses (5)

Answers (0)

Suggested answer

Danny Bilodeau 4,918 Super User 2025 Season 2 on at

Like (0)

Report

Hi,

It affects how granular you want to be in tracking financial inventory. For example in an moving average cost scenario, do you want to calculate the average cost at the warehouse level or is averaging at the Site level sufficient? If only Site is enabled, receipt of POs and issues to SOs in all warehouses are going to be averaged at the Site level and the average cost will be the same no matter which warehouse. On the other hand, if warehouse is enable for financial inventory, the same item will have a different average cost for each warehouses.

Hope that helps!

Was this reply helpful? Yes No
Suggested answer

sagar_patil 918 Super User 2025 Season 2 on at

Like (0)

Report
Financial Inventory means tracking and valuing inventory not just physically (like counting items in a warehouse) but also financially—tracking the money tied up in those items. It helps businesses understand the cost value of their inventory when selling, invoicing, or closing accounts.

If you enable the Financial Inventory checkbox, the system treats this dimension (like size, color, or warehouse) as important for calculating costs, profits, and other financial metrics.

Imagine you own a business selling t-shirts in two warehouses—one in Mumbai and one in Delhi.

Without Financial Inventory:
The system only tracks how many t-shirts you have (say, 100 in Mumbai and 50 in Delhi). It doesn’t care if t-shirts in Mumbai cost ₹200 each and in Delhi cost ₹250 each. All t-shirts are treated as if they cost the same.

With Financial Inventory:
The system tracks both the quantity and the cost per warehouse. So, when you sell 10 t-shirts from Delhi, the cost is calculated as ₹250 per t-shirt, not ₹200 (like Mumbai).

I hope this answer your question.

Note: Please help verify answer(s) if they guide you in right direction so other community members can also benefit from your question with verified answer.

Was this reply helpful? Yes No
André Arnaud de Cal... 301,156 Super User 2025 Season 2 on at

Like (1)

Report
Hi Bansaripandya,

In addition to the replies which should give you understanding of the primary function of the Financial inventory field, it has some more impact:

It determines if there will be accounting entries created when using a transfer journal. E.g. if the Financial inventory is not enabled for warehouse, it will not create accounting entries in case there is a movement of goods from one warehouse to the other in the same site.

It determines on what level you can use the cost on the Inventory value reports.

Was this reply helpful? Yes No
bansaripandya 27 on at

Like (0)

Report

@sagar_patil Could you please tell me what transactions I should perform in FO to obtain the similar business scenario?

Was this reply helpful? Yes No
Suggested answer

sagar_patil 918 Super User 2025 Season 2 on at

Like (0)

Report

Hi,

Let's say i have create a new item: F001. This item enables storage dimension 'Site' financial enabled. Posted a Purchase Order having 2 lines. i.e. Site 1, warehouse 11 and Site 1 and warehouse 12.

Invoice has been posted for this purchase order. When i run the inventory value report then i can see the financial value at site level only.

Now i create another item F004. This item enables storage dimension 'Site' & 'Warehouse' financial enabled. Posted a Purchase Order having 2 lines. i.e. Site 1, warehouse 11 and Site 1 and warehouse 12.

Invoice has been posted for this purchase order. When i run the inventory value report then i can see the financial value at site level only.

Final comparison:

Note: Please help verify answer(s) if they guide you in right direction so other community members can also benefit from your question with verified answer.

Was this reply helpful? Yes No