Simplified FIFO?

Miklos_Hollender

I've heard that due to all the bugs in Inventory Adjustment, Inventory Costing is not used in Germany by localisation, there simply some reports and then G/L Posting of Inventory Value / COGS is done by hand.

Maybe this is a good idea - it has some drawbacks but at least it surely works. Better have a bycicle that works than an airplane that crashes.

I wonder whether we could use this idea at other countries too?

My idea is the following:

- Put all your Items on Standard Costing. It will work right 99% of the time, you will only have problems in that rare case if there are two different purchases in your stock, on different costs. You simply take note of these cases and deal with such issues at the end of the financial year like revaluating etc.

- At the end of the financial year, run a report that does "backwards FIFO calculation". That report would be simple and therefore hopefully bugless. It tells you how much your Inventory Value is. Then you subtract it from the starting Inventory Value of the finanial year + Purchases and then you have your COGS, and can happily post in the G/L and make the statements.

- This simplified FIFO report would simply take current inventory at hand (summed up in all Locations) and just list the oldest Purchase/Pos Adj/Output entries with a typical double loop, exiting the loop when either the total qty. equals current inventory or all positive entries are used up.

What do you think of it?

johnson_alonso

It is impossible to do your opinion in Indonesia. My reasons are the costing method can't be set to all types of industries or companies to be like that.
Some companies even use multiple costing methods like manufacturing division use ABC or standard, raw material uses FIFO, finished goods use LIFO (based on inflation rate consideration).

Have you corrected your blog that you wrote there FEFO, meanwhile in Navision, there is no FEFO ? your blog that explains about inventory, you posted it several days ago.


Rgds,
Johnson

Phenno

You will have, throughout a year, one calculation method (one inventory value on locations, in company, on profit g/l accounts) and than at the end of year another one...
to me it's like, for whole year you don't know what is your actual whole inventory value, profit....

Alex_Chow

Umm... What's wrong with the inventory costing? :-k

Miklos_Hollender

Jonson:

I have not corrected it, because FEFO is not an inventory costing method but a picking method, and I quite clearly wrote that Navison does not support it. I wrote about because I want to make people know it's important in the food/chemical industry.

Deadlizard:
Are you joking? I have spent at least 30 days from Navi 3.6 to 4.0 figuring out different bugs in Inventory Adjustment... want some examples? Roundings by several millions. Transfers not getting actual cost, only expected. Error message complaining about Bin Code. Endless loops. "Another user has modified the record". Stupid valuation date for Manufacturing with average costing therefore completely idiotic costs. BOM Journal not getting adjusted. And so on.

Alex_Chow

Miklos Hollender wrote:

Deadlizard:
Are you joking? I have spent at least 30 days from Navi 3.6 to 4.0 figuring out different bugs in Inventory Adjustment... want some examples? Roundings by several millions. Transfers not getting actual cost, only expected. Error message complaining about Bin Code. Endless loops. "Another user has modified the record". Stupid valuation date for Manufacturing with average costing therefore completely idiotic costs. BOM Journal not getting adjusted. And so on.

Oh yeah, those problems.. But other than that, it's working great!

Miklos_Hollender

OK, I admit that the general idea of having 1:N beetween ILE and Value Entries is the best I've ever seen in any system. It just be debugged properly once and for all.

Kowa

Miklos Hollender wrote:

I've heard that due to all the bugs in Inventory Adjustment, Inventory Costing is not used in Germany .

All of our clients (Technical wholesale ) use it, and all of them use FIFO. All have to prove in the annual audit that it works the way it should, which can be a very long process with uncertian outcome. Using costing method "Standard" in this business would be no solution, some purchase prices are changing every other day. There may be some slow-moving branches where it may work, but not in general.