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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Inventory Adjustment f...
Microsoft Dynamics AX (Archived)

Inventory Adjustment for LIFO

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Posted on by Bursett 425

We are on a LIFO costing system, and we have a part that was invoiced at the wrong dollar value, say $600 instead of $1500  How do I go about fixing this?  If I do a PO for a negative amount and go through the whole pick/pack, receive, invoice and reinvoice thing, it should fix the total inventory value.  However since we're on LIFO, and when I did the PO for the negative amount I did not impact those particular parts in inventory, when the parts get issued to the job they'll get issued at the $600 instead of the $1500.  What is the best way to get those $600 parts to reflect the correct value???

Thanks! 

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  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 301,030 Super User 2025 Season 2 on at

    Hi Bursett,

    Interesting to know is why it was posted with a wrong amount. Did you receive initially a wrong invoice? Or was the invoice correct and someone posted a wrong item cost and the difference to another account?

    Please tel more as the correction method could depend on this.

  • Bursett Profile Picture
    Bursett 425 on at

    There were a total of 50 parts on this PO line and they were received in two batches and 2 separate invoice were sent.  On the first invoice the AP person received all 50 parts at $27.93 (sorry, dollar values in original post were just for example, and I figured I would just use actual numbers here) instead of 25 parts at $55.85.  So now the parts in inventory are undervalued by 100%.  

    Unfortunately if we invoice for an amount under the PO amount, it's not flagged, only if it's over by 10%.

  • Suggested answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 301,030 Super User 2025 Season 2 on at

    Hi Bursett,

    I understand the situation now. Try the next steps first in a testenvironment (copy of your current environment + database):

    - From the PO itself, set the field quantity deliver now to -50. (Action pane tab 'General', Menu item 'Line quantity')

    - Create the invoice from the PO ( will be credit note) with - 50 at $27.93

    - Set the field deliver now to 25.

    - Create the invoice for 25 at $55.85.

    As the postings will be on the same Lot ID (InventTransID) the cost should be OK. Otherwise mark the inventory transactions with each other.

    This should work if:

    - The PO has not been finalized

    - Inventory closing for the period where the invoice was created initially was not run yet.

  • Community Member Profile Picture
    Community Member on at

    In Inventory closing procedure there is an option to make adjustments, pick up the wrong item transaction, put in the difference and post.

    If the item is not present anymore (sold fe) the costprice of that sales will be adjusted when closing inventory.

  • Bursett Profile Picture
    Bursett 425 on at

    What if inventory was closed for the period with the incorrect invoice?

  • Bursett Profile Picture
    Bursett 425 on at

    I've already closed inventory for the period with the incorrect invoice.

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 301,030 Super User 2025 Season 2 on at

    Hi,

    In this case the question is if some of this quantitiy is also sold or consumed in the closed period. If not, you can do the corrections in the current period.

    It is also possible to cancel the inventory closing. Then you can create new transactions in that period, but it will also affect financial reporting which might have been done already.

  • Bursett Profile Picture
    Bursett 425 on at

    Unfortunately the parts were issued to a job/work order in May and inventory has been closed and financials distributed.  =/

    Thanks,

    Marisa

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 301,030 Super User 2025 Season 2 on at

    Hi Marisa,

    Probably you can ask your partner or find a consultant in your location to have a look and ask for some advice. As I don't know all your settings and more possibly related transactions I can't help you further on this community.

    Maybe ignore the wrong cost price. The second invoice can be posted to a various loss or gain account.

  • Bursett Profile Picture
    Bursett 425 on at

    Thank you for your help Andre, but I do have a further question.  On your response above, dated 7/26 and 2:42pm you say:

    As the postings will be on the same Lot ID (InventTransID) the cost should be OK. Otherwise mark the inventory transactions with each other.

    The postings are on the same Lot ID because they are on the same PO?  But what do you mean by "...mark the inventory transaction with each other."?  How do you do this and what would this accomplish?

    Also, I received a response from Carla and she says to pick out the transaction during the inventory close and fix it then.  What does she mean?

    I know those are a lot of questions, so thanks again!

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