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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archive) / Inventory Calculation ...
Microsoft Dynamics AX (Archive)
Answered

Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

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Posted on by Mohammed Jabir OM 145

Hi Axians,

I am trying to understand the way inventory calculation works and what all transactions can have adjustments posted.

I need a feedback from experts here that which all transactions will recalculate and cost amount will change.

For example,

purchase order with positive qty will not be adjusted during inventory calculation.

purchase order with negative qty will be adjusted during inventory calculation.

If I say, more technical - costamountadjustment for inventtrans of purchase orders with positive qty will be zero and viceversa.

Please fill the below table to mention whether the transaction cost value will be affected (cost amount adjustment will be applied or not ) after inventory calculations.

Kindly mention Yes or No. If you have more insight, share them as well.

Id Description Purchased Sold
0 Sales order   Yes
3 Purchase order No Yes
4 Transaction No Yes
5 Inventory adjustment No Yes
6 Transfer    
7 Weighted average inventory closing    
21 Transfer order shipment    
22 Transfer order receive    
23 Transfer order scrap    

Thanks for your effort.

Categories:
Manufacturing
Retail
Reporting and BI
Financial Management
Sales and Marketing
Supply Chain
Inventory and warehouse management
  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hello Mohammed,

    Have you tried running the report in batch mode on a specific batch server? This should make sure that the report runs faster.

    Best regards,

    Ludwig

  • Mohammed Jabir OM Profile Picture
    Mohammed Jabir OM 145 on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mr.Ludwig.

    well this report namely "check open quantities" gave me outline and almost solved my concern to identify what transactions will get adjusted.

    Report seems to take a long time and is there any thing to consider to improve performance ?

    Apart from that your answer pretty enough.

    Thanks a lot.

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hello Mohammed,

    What might help here is the open transactions report.

    This report can be run from the closing and adjustment report and it is just the first step that you execute before running an inventory close.

    It is actually the first selection that you can make there.

    This report will give you an overview of those transactions that will remain open (unsettled) even after the inventory close is run and if I understand you correctly then this is the record you are looking out for.

    Best regards,

    Ludwig

  • Mohammed Jabir OM Profile Picture
    Mohammed Jabir OM 145 on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mr.Ludwig.

    In between, let me appreciate your effort here.

    So we are on live using weighted avg dated method. We  have closed till 2018.

    "If you don't want to have those costs change then you have to run inventory closing first before creating those reports. This does, however, not guarantee that there will not be a subsequent cost change later on."

    I have made report after closing as normal. Now the case is clear, there is no guarantee for the cost to be constant.

    But Finance team have a requirement to keep this cost constant so that cogs report should not be changed for closed period.

    One way I was having is to create a PO with value of unsettled trans that can have adjustment in future closings and do marking. Then i create a return Po to balance inventory qty.

    I need to get feedback to identify which all transaction types can be adjusted by system during closing, so that to achieve the PO solution.

    Thanks in advance for your reply.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mohammad,

    The sales in your report won't change even after you close inventory.

    Costs on the other hand side might change.

    If you don't want to have those costs change then you have to run inventory closing first before creating those reports. This does, however, not guarantee that there will not be a subsequent cost change later on.

    The only way having 'constant' or not changing costs is using the standard cost valuation principle.

    Have you looked into this when AX was setup?

    Are you already live with AX and could have a look at the standard costing model in a different demo/test environment for comparison?

    Best regards,

    Ludwig

  • Mohammed Jabir OM Profile Picture
    Mohammed Jabir OM 145 on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi.

    Actually my concern is to understand what all transaction get recalculated. As per documentations from AX, all issue transactions will have adjustments and reciept transactions will not have adjustments. 

    But there are some kind of receipt transactions like return order or transfer order receive for which system do adjustments. I accept that and it has to be done. So I repeat the concern again what all combination from below table can get adjustments.

    Id Description Purchased Sold
    0 Sales order   Yes
    3 Purchase order No Yes
    4 Transaction No Yes
    5 Inventory adjustment No Yes
    6 Transfer    
    7 Weighted average inventory closing    
    21 Transfer order shipment    
    22 Transfer order receive    
    23 Transfer order scrap    

    Now I elloborated my concern to mention one of our use case. We have prepared some reports. Like sales value vs cost in 2018. We combine custinvoicetrans and inventttans to get this report. User have made insights and they dont accept changes anymore. Eventhough adjustment will get posted in GL in 2019, sales cost for 2018 will be changed in inventtrans which creates changes to report sales vs cost in 2018.

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 283,860 Test role Public on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mohammed,

    I don't think the last reply does match anymore with the original title and question. It appears you have more questions. You can adjust costs of receipt transactions from the inventory closing form. Then you are able to adjust the cost of receipt goods. Why do you want to have transactions constant? The settlement and adjustment transactions will be posted in 2019; not 2018.

  • Mohammed Jabir OM Profile Picture
    Mohammed Jabir OM 145 on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mr.Ludwing.

    Thanks for the quick overview.

    I have gone through the article you have mentioned.

    One clarification I need to understand.

    What are issue transactions and reciept transactions. ?

    To be specific, if i consider return sales order as reciept transaction. How we can adjust that cost ? In reality, cost need to be adjusted for return sales order trans also. Or if we consider return purchase order as issue transaction ? Will it be calculated similar to sales.

    Currently I have closed inventory till 2018, but I see some sales transaction unsettled. I want to keep those sales cost constant when running closing till Jun 2019.

    One idea was to make one po with the cost posted in sales and do marking to sales trans one by one. Then I make omlne return PO in current period to balance the forst entry. This is hectic as transaction is too much. 

    Otherwise I manually create "weighted avg transfer" in invent trans and keep the unsettled inventory qty and value over there.

    Thanks in advance for your insights.

  • André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 283,860 Test role Public on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi Mohammed,

    In addition, you can download the Costing whitepaper for AX 2009: www.microsoft.com/.../details.aspx

    The information for the costing methods are still valid for AX2012. In addition, Microsoft did add a new costing method named 'moving average'. An additional whitepaper for this method can be downloaded using this link: www.microsoft.com/.../details.aspx

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Inventory Calculation Affecting Previous Period | Finding Recalculated Trans

    Hi,

    The basic rule when it comes to this kind of valuation is that receipt transactions can be adjusted by you.

    Issue transactions cannot because for them we have AX and the inventory closing/recalculation process.

    I believe what might provide you a great help is the following website that explains things in depth:

    fedotenko.info/.../

    The article was written for AX2009 but is largely still valid even for D365Fo.

    Best regards,

    Ludwig

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