Raw Material Consumption - Power Energy Vertical

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Hi Experts,

I am working on AX 2012 R3 CU13.

I would like to get some inputs on Raw Material Consumption.

My client wants to consume Raw materials at the average cost price rate through Journal entry as they are not using production module. Their FG is Power/Energy which doesn't required conversion or Process & Sales will be at Govt.Specified rate.

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Ludwig Reinhard Microsoft Employee on at

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Hi Arunkumar,

What do you need for the production of the power/energy? Something like coal, oil or gas that is burned? Assuming that this is the case then you can use a BOM inventory journal to 'produce' the energy and reduce the coal, gas... inventory.

Best regards,

Ludwig

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Hi Ludwig,

Thanks for your reply.

Yes....RM's would be something like coal, oil or gas etc.,

Using BOM Journal will have the impact on FG - as it will not at all match exactly with Sales Quantity.

moreover, apart from RM they also consume spares, consumables, other tools for Operation and Maintenance activity ....which is should be accounted in a similar way of RM Consumption.

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Ludwig Reinhard Microsoft Employee on at

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Hello Arun,

If you add spares, consumables and alike in the BOM, things should be ok.

This is just a matter of the way how you setup your BOM and what elements you include.

Can you elaborate on what you mean by saying that the FG does not match sales quantity?

Many thanks,

Ludwig

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faiz7049 2,382 on at

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Hi ArunKumar,

As per my understanding that you want consume RM respect COG than use Inventory movement journal.

I supposed that you do not want to record Sales, only care about RM.

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Hi Ludwig,

//Can you elaborate on what you mean by saying that the FG does not match sales quantity?//

I would like to consume the Raw Materials as COGS, and Power generated over consumption would be handled through Free Text Invoice, so sales will not be forming part of Inventory.

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guk1964 10,888 on at

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In effect its a material requisition charged to a department when it is issued.

You could also consider creating a project e.g. one per month, and issue materials to the project and also gather other costs the same way.

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Ludwig Reinhard Microsoft Employee on at

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Good Morning Arun,

The approach of using free text invoices for invoicing customers with your inventory can quickly end up in a mess in your inventory and the related inventory values.

Please rethink your process and take into account the option that magic 1949 mentioned (use of projects).

If you are just using free text invoices I fear that you will have inventory values and transactions that have nothing to do with reality.

Best regards,

Ludwig

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Good Morning Ludwig,

Many thanks for your reply. I do agree with your point on Free Text Invoice as i cannot track related cost associates with my revenue at any point. I don't find proper way to arrive exact Megawatt of Energy that has been generated by consuming Coal,Oil,Gas etc and i cannot keep this energy (FG) in Stock as it would be transmitted immediately.

Which is why i choose to raise the invoice through Free Text Invoice or Through sales order as non-stocked item and account the raw material consumption through Movement Journal or via Projects as suggested by magic1949.

Your thoughts please.

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Ludwig Reinhard Microsoft Employee on at

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Hello Arun,

The process with the free text invoice and sales order for a non-stocked item is generally ok.

You have, however, be very disciplined and stringend to always post the movement journal or project transactions.

The last thing is my worry - that people forget posting the movement journal or project transactions.

You thus have to think about a way how you can ensure that those inventory related transaction are not forgotten.

Otherwise, things get messy.

Best regards,

Ludwig

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Hi Lugwig,

Once again thanks a lot for your suggestions.

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