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Default Costing Method

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Posted on by Thilari Hettiarachchi

Hi,

We have a client who is using average costing. We have setup default costing method as average in both inventory setup and item template. But recently we noticed that the costing method is defaulting to FIFO. Is there any other place we need to check? Also, anyone else expierienced this bug recently?

Thank you,

Thilari

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Dynamics 365 Business Central

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HVGEEL 308 on at

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This is not necessarily a bug.

Setting the defaults in a template and in setup... is only setting the defaults.

Unless you have specific READ-ONLY permission setup on items, users are free to make changes.

You might consider

- item creation workflow: prevent the item to be used unless it has been approved. You will need additional permissions to avoid unwanted updates. Obviously.

- setting up a Item Update workflow on any update of the Costing Method field. (Costing Method cannot be changed on items with entries.... so there is a only a tiny window for updates)

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Ben Baxter 6,835 Super User 2026 Season 1 on at

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You might also consider not using Average Costing. For those consultants that have been around long enough we know Average Costing provides the biggest headaches in NAV/BC. The system is calculating your Average Cost in the Unit Cost field for your current inventory. This gives you visibility of your on-hand inventory average cost, but it is not used for the actual transactions. We generally recommend using FIFO for purchased items and Standard for produced items. Just my two cents, feel free to ignore the suggestion.

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Thilari Hettiarachchi 83 on at

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Hi,

Thank you for your valuable feedback. When the costing method of the item template has the value average, but changes to FIFO. It is not because users are changing manually. It is automatically happening when a no. series assigned to the item template, which is a bug in this version I guess. I have reported the issue to Microsoft and waiting for their feedback.

Regards,

Thilari

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Mani Patel 40 on at

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It does seem like a bug. We've got a customer on BC 22.5 and they have a similar issue.

Inventory Setup: Default Costing Method = Standard

Item Template: Costing Method = FIFO

They create a new item using the Item Template, but for some reason the Item is created using the value from the Inventory Setup instead.

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Community member 4 on at

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Dear all,

we got the same issue at Version 23 for our customers.

At Inventory Setup the default costing method is set to "Average".

At Item Templates Costing Method is also set to "Average".

When Users create a new item using item template Business Central always set Costing Method to "FIFO" instead to value from item template.

We also believe that this is a bug.

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Community member 5 on at

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Has there been any update on this? I'm running into the same issue when creating an Item from the Catalog Item Card. Inventory Setup shows the Default Costing Method is Average and the Item Template I selected has Costing Method set to Average but the created Item Card shows FIFO.

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Thilari Hettiarachchi 83 on at

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Hi,

yes. I believe this is fixed by recent updates.

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Shathika Karunaratne 6 on at

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This is a bug. I experience this in both onprem and SAAS versions.
However they haven't rectified it yet.

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