stock calculation is wrong - how to corect?

MiBuYme

Hello everybody,

I am confronting with this issue: we purchase goods on purchase order (this means they enter physically in stock, but have not yet a value). The purchase invoice comes after 2-3 days. In the meantime we sell these goods at a certain price. Problem: the item cost is completely wrong. Navision doesn't know the item cost at the moment we sell the goods, but it will know it after 2-3 days, when we input the purchase order.

Question: how do I correct the stock value? (It records the item cost when it's totally wrong and that value is not corrected after we input the purchase invoice and after we run all "adjust cost" procedures).

This affects the company profit, the balance sheet, etc........

Any suggestion?

If our way of operation is wrong, please suggest the corect one!

Thanks,
Mihaela

Rule

You need to run the Adjust Cost- Item entries report. It will create additional value entries which will correct your sales to the right cost (using the cost of your invoices). After you run this report you will have to rerun the post inventory Cost to G/L report to post the corrections to the Genral ledger.

After this you need to run the Adjust Cost- Item entries report every time before the post inventory Cost to G/L report.

ara3n

I believe that 50 percent of installation a year after go live, they start to get costing issues. The numbers do not match or they do not know about adjust cost item entries.

So the question is, why is this happening? Is it the controlers? is the client inexperience with the software, Lack of understand costing? NSC lacking the depth knowledge of costing and explaining that to the client?

MiBuYme

Rule wrote:

You need to run the Adjust Cost- Item entries report. It will create additional value entries which will correct your sales to the right cost (using the cost of your invoices). After you run this report you will have to rerun the post inventory Cost to G/L report to post the corrections to the Genral ledger.

After this you need to run the Adjust Cost- Item entries report every time before the post inventory Cost to G/L report.

Thanks, I did everything you say here, but it didn't solve the problem. The guys that did the implementation say we are operating wrong the purchases, because it's not corect to sell something before you actually make the purchase. They don't provide a solution and on the other hand we cannot work the way they say: we have to sell and the moment of purchase is sometime afterwards. Maybe some settings are wrong and we are not capable to make the corect ones.

If you think you can help........we use use FIFO costing, we have item tracking by LOT no. (we sell drugs) and "automatic cost posting" is checked.

Mihaela

Rule

:shock:

I think you have a problem.
We've tried Lot tracking for some articles but it creates a lot of problems.
Because you're using Fifo navision always uses the oldest item ledger entry. Even if you specify another lot. If you want lot tracking you must use another costing method. You got to try it yourself. Sell the newest lot and see from which item ledger entry the goods are sold (normally the oldest).

What you're partner says about selling before purchasing the goods is bull s!!!. Navision can sell goods even before they are in inventory. When you sell the goods navision creates an item ledger entry and a value entry. The cost of the entry will be normally the unit cost (on the item card). When you purchase the goods (that already have been sold) the purchase entry will be applied with the sale entry. After you've posted the invoice you must run the adjust cost- item entries report. You will see the system creates additional value entries for the item ledger entries. These additinal value entries will correct the cost of your sale to the cost of your invoiced purchase. Just try it yourself in a testdatabase. Post a sale, look at the value entry of the sale (it will be the unit cost). Then run the adjust cost-item entries then you will see there will be a additional value entry correcting the first value entry to comply with the FIFO costing method.

MiBuYme

Thank you, I'll try on a test database. When I ran the procedure of adjust-cost item entries, it failed (i don't remeber the error received that moment), i will re-run this procedure and post here the result.

So, you say FIFO is not good with item tracking. What other method do you suggest?

Thanks!

Rule wrote:

:shock:

I think you have a problem.
We've tried Lot tracking for some articles but it creates a lot of problems.
Because you're using Fifo navision always uses the oldest item ledger entry. Even if you specify another lot. If you want lot tracking you must use another costing method. You got to try it yourself. Sell the newest lot and see from which item ledger entry the goods are sold (normally the oldest).

What you're partner says about selling before purchasing the goods is bull s!!!. Navision can sell goods even before they are in inventory. When you sell the goods navision creates an item ledger entry and a value entry. The cost of the entry will be normally the unit cost (on the item card). When you purchase the goods (that already have been sold) the purchase entry will be applied with the sale entry. After you've posted the invoice you must run the adjust cost- item entries report. You will see the system creates additional value entries for the item ledger entries. These additinal value entries will correct the cost of your sale to the cost of your invoiced purchase. Just try it yourself in a testdatabase. Post a sale, look at the value entry of the sale (it will be the unit cost). Then run the adjust cost-item entries then you will see there will be a additional value entry correcting the first value entry.

Miklos_Hollender

Rule is right about selling before the Purchase Invoice. It's completely OK. However, Lot No. tracking shouldn't cause wild costs. True, Navisison does not take Lot into account when applying the FIFO so it can apply entries from another Lot, but the cost should then be the correct cost of that other entry and not something wild. So I think you have a bug here. Post the error message here and the version you use. Versions before 3.7B tend to be quite buggy in costing.