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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Item Model Group confi...
Finance | Project Operations, Human Resources, ...
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Item Model Group configuration

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Posted on by Hendo 582

Hi. We sell many ad-hoc products that are not stocked and are purchased solely to fulfil a sales order line.  Because there are many of these "bought-in" items, the item id used for them is a generic one called "SPBUY-INS".   The inventory model is standard cost with a cost of $0.01.   This works in a fashion, as actual cost is debited to PPV in the cot of goods sold area. However, sales analysis by item is totally misleading.   Is there a better approach to handling these type of items?         

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Item Model Group configuration

    Hello James,

    What I could imagine to get a different and hopefully better cost of sales analysis would be allocating the PPV at the end of the month to the different product issue transactions such as the sales that you record and post.

    Such an allocation is, however not very easy and is based on a number of assumptions.

    (You will probably need sales order or customer related findims that you can refer to and the amounts will be allocated based on the sales amount, which can be a wrong assumption).

    Also, the allocation tools that we have available in AX are impacting the General Ledger only.

    In other words, if you run a report in sales and marketing, you won't see the effect of those GL allocations.

    In short, there is no good solution available for this in my opinion but a couple of workarounds that you will have to test and discuss internally before applying them in your live environment.

    Best regards,

    Ludwig

  • Hendo Profile Picture
    Hendo 582 on at
    RE: Item Model Group configuration

    Hi Ludwig. This happened before my time here and there is no documentation around this matter.  I suspect that this method was chosen because the wide range of actual cost associated with individual buy ins make the use of other valuation methods less reliable.  It may well be that standard cost with end of month adjustment redistributing the PPV values is the most appropriate solution. Regards. James.  

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Item Model Group configuration

    Hello James,

    Do you know why a standard cost evaluation was chosen in the first place?

    There must have been a reason for that and I would expect that this issue of the sales analysis has been discussed that time.

    Best regards,

    Ludwig

  • Suggested answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 291,280 Super User 2024 Season 2 on at
    RE: Item Model Group configuration

    Hi James,

    If you need the correct cost for analysis, you need to use an actual costing method instead of standard cost. You can then use inventory marking (or automated) to have the correct cost updated on the sales transactions. You can also consider then to use e.g. a serial number dimension to ensure it is always one on one.

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