Recalculation of inventory

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Hi,

Please can I get some advice regarding the recalculation of inventory in AX 2009.

I had an issue where the stock valuation for an item was getting out of sync due to rounding variances. I received advice to do the following:

run recalculation for the specific item
post stock movement journal to write off the remaining items at what ever cost the system generates (i have no ability to change the cost when posting a write off stock movement - unsure if that is a system issue or permission issue?)
run recalculation for the specific item (no change occurred)
post stock movement journal to write on the items at the correct value (taking into account the remaining value following the write off which didn't get to zero)
- At this point the stock valuation for the quantity looked correct
run recalculation for the specific item - costs changed back to an incorrect valuation.

Please can I have some advice on where this may have gone wrong & also how to fix it going forward? I feel that the crucial point is when you do the recalculation but I don’t know when that should be and what the implications are as I often cant reconcile the change in costs once the recalculation is done

Any help would be appreciated please.

Thanks

Megan

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Ludwig Reinhard Microsoft Employee on at

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Hello Megan,

Have you tried following the advice you got and after running through the points that you mentioned is your item still out of sync?

By the way, what do you mean exactly by saying out of sync?

Best regards,

Ludwig

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Community Member on at

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Hi

Apologies if I wasn't clear. Yes I followed the advice and up until the final recalculation it appeared to work in that the value of the stock on hand was as i expected. However as soon as i ran the recalculation again at the end, the costs changed to a value that was no longer correct. Therefore I am unsure how to fix it.

By out of sync I mean that the unit cost for sales or BOM transactions can be different to the original purchase price - often differing from one transaction to the next by a tiny amount due to rounding (i am not sure how many decimal places the system uses). But over thousands of transactions for one item, this can become significant, sometimes even leading to a negative value.

Thanks

Megan

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Guy Terry 28,998 Moderator on at

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Hi Megan

[quote]I have no ability to change the cost when posting a write off stock movement[/quote]

That's normal. AX calculates the value of the stock that you are writing off; you are not allowed to determine yourself what the cost of this should be.

In terms of the steps you have posted, I think that doing an Inventory close (instead of a recalculation) at each step would ensure that the cost of the stock at the end matches the 'correct value' that you want. However, I don't know if these steps are necessary (AX normally gets the cost 'right' if the users are doing the things they should do), and doubt that it will stop the problem happening again.

If you want to investigate your problem here, please post details of the settings of the Item's Item model group (Inventory model and 'include Physical value') and Tracking and Storage dimension groups, and some example of the problem.

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Community Member on at

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Thanks Guy for the clarification on stock write offs.

From your explanation, i understand it that once the inventory close has happened, transactions that have been closed will never change in value again - is that correct? Is it at that point that the transaction is given a 'financially closed date'? What happens if the PO has not been invoiced at that point yet?

Is it also correct that you can only close inventory for all items - we are unable to specify a particular item to close? If that is the case then I don't feel that it would be possible to do the inventory close mid-month as other items may not be ready to be closed and I am concerned it could cause further implications.

We use miscellaneous charges on POs to add indirect costs to stock values (costs such as freight or duty which are charged by a vendor other than the supplier of the item). I have seen instances where the miscellaneous charge has been amended after the stock PO has been invoiced which updates the stock valuation on the item table (e.g. deduct 0.2% from the unit price). Once recalculation happens, all transactions relating to that PO will be adjusted as well, even if they are financially closed. Should that be the case?

Here is the item set up :

Inventory model - Weighted avg

Inventory model (cur) - FIFO (unsure what the difference is?)

Include physical value - ticked

Fixed receipt price - unticked

On the setup tab of the item card, price update section, 'Latest cost price' is also ticked.

Thanks in advance for any help - apologies for all the questions!

Megan

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Guy Terry 28,998 Moderator on at

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Hi Megan,

Inventory model (cur) - I never heard of it! It seems to be Russian functionality for maintaining cost in a reporting currency. I'll ignore it and go with 'your items are costed using Weighted average'.

[quote user="Megan Jones"]

i understand it that once the inventory close has happened, transactions that have been closed will never change in value again - is that correct?

[/quote]

No, and you already found one scenario where the cost of a settled issue transaction can change. With the Weight average model, AX will not close (settle) un-invoiced purchase orders. So you cannot have the case that an un-invoiced Purchase order is settled to a Sales order by Inventory close. However, you can adjust the cost of an invoiced purchase order; for example, by adding a charge to it. In this case, the cost of the PO is updated when you add the charge. The cost of the issue transactions that are settled to that PO are updated when you next run Inventory close (or, probably, Recalculation).

It can also happen in production scenarios. If you End a production order, AX can settle the cost of the production order to a sales order. Later, if the purchase order for the raw materials is invoiced at a different cost, the cost of the production order can change, and this can cause the cost of the sales order to change as well.

[quote]

Is it also correct that you can only close inventory for all items

[/quote]

Yes. I'm still not sure what this procedure is solving, but I can understand why you don't want to run inventory close in the middle of a period.

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