Differences between accounts in Nav4

shanna1shanna1 Member Posts: 76
Hi all!

Please I need some explanations:
I have an Item Item ABc that is linked with Gen Prod. PG = "PARTS"; Gen. Bus. PG = "", Inv Posting group = "ROT"

1. When I go to Gen Posting set up for that Gen Prod PG , what are differences between these accounts: COGS account, Direct cost applied account, Invt. Accrual Acc. (Interim), that I dont understand differences with Purchase account.

2. When I go to inv Posting set up for that Inv Posting group, I have "Inv account interim ", what is the purpose?

3. Difference between WIP in the Inv Posting set up and WIP in the Job posting set up? When to use WIP in the INV posting set up??

Thanks for help.


  • ShenpenShenpen Member Posts: 386
    1. COGS is the cost of goods sold when you invoice a product to a customer. I suggest you to talk to an accountant, because I think it is not possible to implement any ERP without basic inventory cost accounting knowledge as it is one of the trickiest things in accounting.

    2. Direct cost applied comes from the way Navision posts accounting open posting a vendor invoice.

    When you post the invoice, it is (assuming zero VAT for simplicity):

    D: purchase account C: vendor liability account (from vendor posting group)

    then when you post the inventory costs to G/l:

    D: Inventory account (from inventory posting groups) C: direct cost applied account (assuming you don't use indirect costs)

    usually we set direct cost applied account to the same as purchase account, so it should be zero. it is usually called the "collision" account because different postings "collide" here to give zero together.

    direct cost applied account is used in other situations too. it is used in a positive adjustment, negative adjustment - I think you should create gen. bus. posting groups like INV_SURPLUS, INV_MISSING, INV_SCRAP and assing direct cost applied account to the relevant cost or revenue accounts. this is what we usually do. And then choose this posting group on the item journal.

    Beware, always use "exact cost reversal mandatory" or you can get non-zero amounts on the "collision" account coming from credit memos that are hard to repair...

    Manufacturing is a bit more complicated, I hope you don't need it now.

    3. WIP in the inventory is used for manufacturing - only in "real" manufacturing, not BOM Journals, I think. Jobs WIP is used for jobs.

    Do It Yourself is they key. Standard code might work - your code surely works.
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