Microsoft Dynamics AX (Archived)

Transfer Service Items???

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Posted on by Adam Duckworth

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Hi,

We're using Dynamics AX 2009 and wondering how best to handle this problem.

We're a manufacturer and purchase lots of items that we consider consumables and not worth counting/tracking. Imagine Nuts and Bolts, Screws and Rivets. These have all been set up as Service Items so we can order them from our suppliers and use their codes on our purchase orders etc. When we receive the invoice they get directly expensed to a Ledger account. The ordering branch has its unique code applied to Dimension 1 so we can track each branches spending.

When every branch ordered these items directly from our suppliers the system has worked perfectly. But we've now started ordering these items in bulk from China and they all come into our Head Office. We then want to transfer them to other branches as needed.

We'd like to use the same process (Transfer Orders) to transfer these parts as that's what we're doing, but we can't add Service items to a Transfer Order. It just returns the error message "Item of type Service is not applicable". I get that they're not stocked so the transfer journal can't transfer 5 boxes between branches as it has no boxes in stock. But we don't care about the stock effect, we just want the expense moved. Ideally the journal moves the cost of 5 boxes from Ledger Account 1234, Dimension A to Ledger Account 1234 Dimension B to stop all the costs being attributed to Head Office.

I've tried changing the items to Type=Item and setting their Inventory Model Group to one that has no Ledger Integration... We can still set the ledger account when we purchase them, and it then lets us transfer them, but this doesn't affect the GL and move the expense...

Has anyone met this situation before? (Hard to believe we're unique) How did you deal with it?

Thanks,

Adam

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Prashant Singh 8,802 on at

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Dear Adam Duckworth,

As I know service item has no inventory balances are stored, which means these items cannot be reserved nor picked. So need to inventories those item before sending it through transfer order.

For your reference (Service item ):

[View:https://community.dynamics.com/ax/b/axsupchainmang/archive/2011/06/01/service-products-in-microsoft-dynamics-ax-2012:550:50]

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Adam Duckworth 130 on at

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Appreciate a reply, but I had said "I've tried changing the items to Type=Item and setting their Inventory Model Group to one that has no Ledger Integration... We can still set the ledger account when we purchase them, and it then lets us transfer them, but this doesn't affect the GL and move the expense..."

Its moving the expense as part of the transfer that I'm stuck on.

With no other feedback, the best answer I've come up with will be to add a routine for the end of month procedures that goes through and looks for all of these items that were transferred during the month and sums up an effect for them and does one GL journal to juggle the dimensions on the expenses.

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RamK 2,580 on at

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Hi Adam, When you say expense, do you mean cost of the goods...? Please provide more details.

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Adam Duckworth 130 on at

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Yes, so purely as an example, Say we buy 500 boxes of rivets (10,000 rivets per box) that cost $10 each box and these are expensed/charged to a General Ledger code 5340 (for consumables) with the Department Dimension for the transaction set to AKL.

Later we transfer 6 boxes from AKL to WGN. What we want to happen is the following GL effect

-$60 from account 5340 with Department AKL

+$60 to account 5340 with Department WGN

So the net effect on the 5340 account is 0. Its purely for reporting on internal cost allocation.

We don't know at the time of order which branches are going to use the 500 boxes. Some of the branches are quite small and don't have the space to store the 10 boxes out of this order that they will slowly use over the year. (Well they could store 10, but there is a lot more than just one type of rivet for them to stock.)

If we created them as a proper item then, as they aren't consumed on a BOM, we'd only get a GL effect at the end of the year when we ran our Stocktake and counted down the 10 boxes that it thinks WGN had down to 1.

We're not going to add them to our BOMs to get consumption either. Maybe a giant corporation might care about those details but to us these things cost a fraction of a cent each. We're not going to count them at stocktake. The manufacturing process is done by hand and they don't use exactly 1 rivet every 38mm so we'd never know eaxctly how many went into a product. And we don't want to ever get a message saying that an order can't be invoiced because an item uses these rivets and the system thinks that we've run out of them. (We're using backflushing at invoice time for inventory)

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Weaveriski 23,620 Moderator on at

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In reality there is no stock, so there is no transfer requirement within the business. You could re-allocate through a general journal which sorts out the financial impact. However I am guessing you want the physical control and processing element of the movement of the goods - the traveller/paperwork that says move from A to B, and this is where the disconnect comes in because there is no stock. I presume you want both elements - no stock transactions for the supplier maintained consumables and the ease of expense, but the controls required when transferring between departments?

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QamarKhan 315 on at

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Dear this is a common problem in our part of the world, where operations wants to keep some consumable items as stock items because they have to purchase the items in bulk, and then transfer them to stores, eventually managing the inventory.

You have rightly said that the best solution is to park these items in Consumable Stock GL Codes at the time of purchase through Purchase, inventory receipt posting type in item group and then transfer these its to stores, where at each month end you need to consume these items using inventory journals in respective expense codes. A customization can be based on using any filed in the item for e.g. in AX 2012 we can use Counting group or even attribute to create a atomized inventory journal for consuming the stock received at branch.

There may be other workaround for this as well if the above doesn't cater your requirement.

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RamK 2,580 on at

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Hi Adam, As Steven suggested, cost can be allocated to departments by GL Journals or you can go with customization as suggested by Qamar. However, the common practice is to post GL Journals and allocate the cost

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Adam Duckworth 130 on at

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No, in actual reality there is Stock. :)

... Its in Dynamics that there is no stock and therefore no Transfer requirement exactly like you say. It looks like I can cheat the system by changing the Items from Type Service to Type Item (this will let them be transferred) but then allocating the Item to an Inventory Model Group that doesn't have the options "Post physical inventory" and "Post financial inventory" ticked - that will then mean it has no $ implications on our stock. It will still have quantities showing in stock at the various branches which will only get cleared at Stocktake, but as no one would pay attention to them anyway, that's OK.

And yes, we kinda want both elements like you say. We definitely want to be able to use the same transfer order control that we use for other items. I'm not fussed on the Stock Transactions so long as they have no value on them which what I described above gives me.

Obviously we can manually do a GL Journal to reallocate costs but what I was looking for was some way to automate the reallocation of the costs in the GL as part of the Transfer process. I'm still newish to X++ coding so I'm not quite willing to try and add custom code on my own to do this for me.

Looks like I'll be making it part of the month end procedures. Create a GL Journal based off transfers during the month. My only concern is going to be how to do that so that people know its been run already.

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Weaveriski 23,620 Moderator on at

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If you are going to create them as stocked items why are you not attaching them to a model group that has "Post physical inventory" and "Post financial inventory" ticked?

I feel the reallocation of expense would happen at consumption, so if dimension based you book into a generic dimension and it is moved (still an asset) and then periodically "used" by a department which would remove it at that dimension. Not really clear here I am afraid - but if items work for you then set them as items and then process through if that makes sense. The transfer order will not auto reallocate to the department, but you could make that part of your month end with a report on transfers of the item by department request and then move the value from a dimension perspective to reflect the cost impact?

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Adam Duckworth 130 on at

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You have rightly said that the best solution is to park these items in Consumable Stock GL Codes at the time of purchase through Purchase, inventory receipt posting type in item group

Not sure what you mean by "Inventory receipt posting type in item group"
I believe that the primary function of the Item group is to control GL postings. I think it should have been called "Posting Group" rather than Item Group. Maybe once upon a time when you had a different GL Code for each Group of Items, then this was necessary as each Group would be posting to a different GL account. Since we use the same GL account for Revenue and rely on the Cost Center dimension to break out the Groups, having the number of Item Groups we do (that all post exactly the same way) seems pointless.

Anyway, on the item group, there is an inventory tab with a "Receipt" field. Is that what you mean? We haven't populated this field for our "Expense" item groups and require the Ledger Account field to be filled in on the line for them. Basically requiring the person processing the invoice to think instead of just clicking post blindly.
I referred to the Inventory Model Group - which looks like this for these items

and then transfer these its to stores, where at each month end you need to consume these items using inventory journals in respective expense codes.

No, this last part we aren't doing. We don't know how many we've used. And no one wants to count what we have left. That's why I want/need to handle it at Transfer time.

A customization can be based on using any filed in the item for e.g. in AX 2012 we can use Counting group or even attribute to create a atomized inventory journal for consuming the stock received at branch.

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