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Hi,
I have a general question about Inventory Recalculation. I want to set up Inventory recalculation to be run every day, but there is a problem with posting dates and the G/L entries. For example recalculation is being run at 05.02.XXXX(the inventory is not closed for previous month). There is an item charge which changes the cost of positive transactions from previous month. When I run recalculation at 05.01.XXXX G/L transaction for recalculated negative entries(COGS) from previous month will be posted at 05.01.XXXX. That`s wrong because this COGS is for previous month not for current month and this COGS must be reported in P/L for previous month.
I have more than 5 years experience with Microsoft Dynamics NAV. NAV posts transaction from inventory recalculation at posting date of each negative entry. Thus the posting date of the G/L entries from inventory recalculation are in the month of the inventory transaction.
I want G/L entries and inventory adjustment transactions to be posted at the date or month of the negative transaction. I want to run inventory recalculation every day because I want accurate cost every day. How can I set up this in AX? Is this possible? Is there any work around to do this? What is your experience?
Thank you!
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Hi Guy,
Standard cost is not accepted from my customer.
If you post item charge in February for PO from January and January is closed it is normal to post changes in COGS in February. This is the way NAV also works.
I understand your case in UK but it is not possible for my customer to post COGS in the next month.
Hi Hristo,
You could run standard cost :-)
I am generally interested in the point you raise, and have a question about what you think should happen if the previous period was closed. You receive a PO in January and sell the item in the same month. You invoice both the PO and the SO in January. You close January. You then receive an invoice for a charge related to the PO. I assume you accept the adjusted COGS cannot be posted in January, because it is closed? What would NAV do? Why must a cost that is not known until February be posted in January?
I also have some experiences with the scenario you describe. In a previous life, I worked for a manufacturer in the UK who used weighted average. It was understood that costs were an average until after month end, and they would likely be adjusted. We did not run any recalculation during the month; we only Ended all works orders and posted all received purchase order invoices before running inventory close at the beginning of the next month. We posted charges for shipping against purchase order invoices much later, which would cause the COGS from a previous month to be adjusted in the current month. The financial auditors were not upset with this.
I assumed all this is accepted when you use an actual costing method (but my experiences are limited to AX). You do also have standard cost or 'Moving average' in AX. Neither of these will cause COGS to change, at all. And both these methods have their drawbacks as well.
Hi Hristo,
When the actual cost is calculated, do they use a date in the previous month? Then you might run at 20th or 21st a recalculation with the period code setting of end last month in batch.
If you want to have the transactions on the day they occurred, you can possible schedule each month about 31 recalculations for each day of the previous month. I'm not aware of your number of transactions, but look after the performance.
Hi Andre,
Thank you for your replay. I know this but I`m looking for another decision. The problem is that one of my customers is production company. The cost method is weighted average and they calculate actual cost at 20th next month. Thus they can not run inventory recalculation for the new month until 20th. So the cost of inventory is not correct for the the new month until 20th.
What would you do if you had this problem?
Hi Hristo,
AX uses the posting date which was used on the Inventory recalculation dialog. If you run this every day, your costs would be updated daily. Note that when you create a transaction with a date in the past, the correction will still be posted at the day of the inventory recalculation.
When you specify a Period code instead of a date you can run the inventory closing in the batch framework daily.
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