Item Cost

Horse06

I have a question regarding the item cost. Since our item pricing is changing on a weekly basis, we have to update the pricing all the time. The item cost has been updated. But if we placed an order one week ago, and if we invoice it two weeks later, how can the item cost be automatically adjusted with adjusted item card. Appreciate it!

gvolkov

first of, do you use FIFO? If you buy at increased cost you will have that same cost when selling. Or do you increase your inventory cost when your cost increases? then you can use revaluation journal.

Horse06

Thanks for your quick response! That is the reason I like to use this forum. What I mean here is unit cost doesn't change at all, not the selling pricing. It will cause us a lot of problem when we are not changing the unit cost. We are using 4.0. How to write a process Only report to ajust the unit cost before we invoice it.

gvolkov

If i am understanding correctly, you want to make sure that you're invoicing your orders at the right cost.

1. You can recalculate the lines on the sales document manually. (time consuming)

2. Write a processing report that will reVALIDATE the lines, and insert the right cost, or reVALIDATE them before invoicing.

3. Post as is, and let the Adjust Cost report take care of cost adjustments. ( recommended )

Let me know if this helps.

Horse06

Thank you so much! That is what we are doing all the time. Manually change the cost , but it is time consuming. Referring your answer of Number 3: Post as is, and let the Adjust Cost report take care of cost adjustments. ( recommended ). So which Adjust Cost Report? Does it mean that it will adjust the unit cost in the invoice after the report is run?
If we are using No 2 answer per your response, how to write a processing report that will reVALIDATE the lines, and insert the right cost, or reVALIDATE them before invoicing?

Thanks so much!

gvolkov

If you choose to write a report ro reVALIDATE the lines with the new cost i strongly suggest to consult with your solution center, or a developer (whichever is available) and have them help you make this report. There are way too many things to consider. If you need help, and there is noone to help you, please send me a private message and we'll take it from there.

If you choose to utilize Adjust Cost report, read about it in Navision help. It explains a lot there. Basically it adjusts the cost after items have been invoiced. You can find the report in Inventory menu under Costing. (How long have you been using Navision? This should have been explained to you by whoever implemented it)

Alex_Chow

You can ask your solution center to update the Unit Cost (LCY) field on the sales line during the time of posting. :-#

AdamRoue

You never answered the question regarding your costing method. If you are FIFO it will not matter, the adjust cost routine will pick this up, the only difference would be if you wrote reports using the sales line and used the cost, but I understand this is bad practice, so should not be done anyway due to its inability to reflect the true cost, unless of course you do the modification that Alex describes, although it will not be 15 minutes, it would need to be specified, written, tested, delivered and maintained, I am not a developer, but if I as a consultant ever said something would take 15 minutes every developer would rightly shoot me

Alex_Chow

AdamRoue wrote:

I am not a developer, but if I as a consultant ever said something would take 15 minutes every developer would rightly shoot me

You're right. My fault.

Horse06

Thank you for all your advice! For example,I entered a sales order one month ago with the unit cost of $10.00. One month later, this order was posted with the unit cost of $15.00. To my understanding, even though we still see the original unit cost as $10.00, the system will automatically adjust it after posting. Does it mean that we have to run the report (Adjust Cost - Item Entries) first, and then post this invoice? Please confirm! Your help, even one word will help me a lot! Thanks!

gvolkov

You can invoice the sales order, and run Adjust Cost report weekly. Again, without knowing your industry, transaction volume, etc, it would be irresponsible to make a sound recommendation. But in general, yes, adjust cost report will adjust cost on what you have already invoiced. You can also turn on automatic cost adjustment, which will result in much more exact financial statements, but even with that turned on, you still will need to run Adjust Cost report.

Alex_Chow

Horse06 wrote:

Thank you for all your advice! For example,I entered a sales order one month ago with the unit cost of $10.00. One month later, this order was posted with the unit cost of $15.00. To my understanding, even though we still see the original unit cost as $10.00, the system will automatically adjust it after posting. Does it mean that we have to run the report (Adjust Cost - Item Entries) first, and then post this invoice? Please confirm! Your help, even one word will help me a lot! Thanks!

What information or reports are you looking for? Obviously, the item cost on the sales invoice line will be different than the item cost on the item card when you run the adjust cost.

The ACIE will adjust the cost irregardless of when you run it. In another words, you can just run it once a month and it will all be okay.

Are you looking for profit per invoice? Per Item? Where are you looking to get the data from? Your response will net you different recommendations.

gvolkov

What information or reports are you looking for?

He was looking for a 'processing only' report that would adjust the cost on the sales order prior invoicing it, thinking that the cost was posted incorrectly.

Alex_Chow

gvolkov wrote:

What information or reports are you looking for?

He was looking for a 'processing only' report that would adjust the cost on the sales order prior invoicing it, thinking that the cost was posted incorrectly.

It's more than that. People don't just ask to update any data unless there's a requirement for analysis or reports.

Horse06

We are calcuating the sales margin and found last week, there is a big differece between the cost we first ordered it and the cost when we invoiced it. If we change the cost one by one when posting the invoice, it is time consuming. Any help will be greatly appreciated!

gvolkov

All you need to do is Run the Adjust Cost report regularly. And watch your cost adjust like magic. If you want to update your sales order lines in an automated fashion, PM me and i will be glad to write a report for you that will do just that.

Alex_Chow

ACIE won't help them if they are running reports based on the sales invoice line table.

When you analyze your profit margins, make sure you check out this article:
http://dynamicsuser.net/blogs/alexchow/ ... -cost.aspx

How and where are you calculating the profit margin?

Horse06

How do I contact you, gvolkov? If I need a process Only report to ajust the unit cost, I will need sales header table, sales line table and item table right? Please let me know what I need to do? thanks!

Horse06

Oh I forget to answer the question. We calculate it from the sales invoice, customer ledger entry. We are using the data of the unit cost and sales cost. That is the reason why unit cost is so important. Thanks!

Alex_Chow

I hope you know that the cost information from invoice lines and customer ledger is only an estimated cost.

Horse06

Thank you! I really don't know this. Why are they the just estimated cost. What is the real cost we can calculate. Appreciate it!

Alex_Chow

Horse06 wrote:

Thank you! I really don't know this. Why are they the just estimated cost. What is the real cost we can calculate. Appreciate it!

http://dynamicsuser.net/blogs/alexchow/ ... -cost.aspx

8)

Horse06

Regarding the adjust cost - item entries, if the orders are posted two months ago, after run the report two months later, will the prices in the invoice table be adjusted to the current price? Thanks!

Alex_Chow

Horse06 wrote:

Regarding the adjust cost - item entries, if the orders are posted two months ago, after run the report two months later, will the prices in the invoice table be adjusted to the current price? Thanks!

No.

gvolkov

Regarding the adjust cost - item entries, if the orders are posted two months ago, after run the report two months later, will the prices in the invoice table be adjusted to the current price? Thanks!

The ACIE Report adjusts cost only. Real profit value then must be calculated from Value Entries. Sales invoices only have "then known to be best cost". But if we look at the "profit (LCY)" field in Customer table, its calculating the profit from Customer Ledger Table. And many reports in Navision use this flowfield. With this said, we are looking at incorrect profit values.

ACIE is the key for real profit value. Your Account Schedule is the best place to look for real profit values.

Am i correct?

Alex_Chow

gvolkov wrote:

ACIE is the key for real profit value. Your Account Schedule is the best place to look for real profit values.

Best place? I wouldn't say that, but a pretty good place. The account schedule will only allow you to see cost for the whole company, not individual shipments or item, unless you get dimension involved. But you run into the trap of looking only at the accounting cost if you need to report margins per period.

Take a look at the links I posted and consult with management to see what profit they want to see.

David_Singleton

Alex Chow wrote:

Take a look at the links I posted and consult with management to see what profit they want to see.

Some how Alex I think you can lead a Horse to the right information but you can't make him actually read it. 8)

Horse06

If we modify the codeunit, do we have to add code to the post invoice button from the sales order form? If not which means after we add the code of the codeunit and every time we post the invoice, the unit cost will be automatically be adjusted? Appreciate it!

Alex_Chow

Horse06 wrote:

If we modify the codeunit, do we have to add code to the post invoice button from the sales order form? If not which means after we add the code of the codeunit and every time we post the invoice, the unit cost will be automatically be adjusted? Appreciate it!

Once again, the cost on the sales invoice line is only an ESTIMATED COST! If management only wants estiminated cost, then you're done.

jversusj

i remember having this same discussion at my previous job. they couldn't understand why all reports pointed to Profit flowfield on the customer table, but that profit reflected static costs at the customer ledget entry level. it seemed goofy that the adjust cost routine did not touch those costs reflected on the CLE.

i ended up writing a report based off the value entries (since those were being updated), as was previously suggested in this thread. maybe you should contact your NAV partner and have them put together a report that gives you the data already in NAV (if you look in the right place) instead of talking about modifying the posting codeunit or of creating a processing report?

Horse06

Thanks for everyone's suggestions! We also have some reports that are from the value entry. I checked the value entry, but the unit costs are not updated at all after we run the adjut cost report since we run this report regularly. Also we checked the numbers from the Account Schedule with the numbers from our business transcations of the bank and found there are severeal thousands dollars difference from the system. Could you please advise? Thanks!