Costing Method Change - How to eliminate item ledger entries

HsinChuMark · 2007-12-19

Hi Experts

in our Database some items have been created with incorrect costing methods. I followed the procedure posted several times in this forum (Zero out inventory - Run Adjust Costs/Item Entries - Post Costs to G/L). Now I should be able to change the costing method - I thought. But still the system prompts "You can not change the costing method because there are one or more ledger entries for this item". How come? I did run the adjustment batch job and posted the costs to the G/L.

How to handle this?

Your help is much appreciated
Mark

mahesh · 2007-12-19

same problem happened to me also but it was initially after live Nav.
So i did comment dat code which gave this error & then manually changed Costing method, again removed comment...

This may not be d best solution but once actual cost posted to GL then need not to worry... O:)

kine · 2007-12-19

1) If you change the costing method on existing item with entries (even if you have 0 inventory), you can have problems with Adjust Cost batch in future, with creating rounding entries into closed periods (depends on old and new costing method and on NAV version).
2) "Clean" way is to create new Item with new costing method. Or rename old and create new with same no. with new costing method. But it can take some time when you are changing method on few kilo-records....

HsinChuMark · 2007-12-19

Hi Kine, thanks for your answer. Could you please elaborate:

- What kinds of problems do you mean? I want to change from 'standard' to 'average', NAV version is 4.0 SP2.

- You are saying: "rename old and create new with same no. with new costing method." This sounds interesting, but I seem not to be able to renumber an item.

- Using other numbers than we have right now is not possible.

What would happen if I zero out inventory, post all costs to G/L and change the costing method in SQL level? (This would certainly be the last resort).

kine · 2007-12-19

1) I do not recommend to use Average costing method. If you want to know average cost, it is better to do own report which will calculate that. Average cost is hard to "decode" and in case of some problems hard to correct. And the Adjust Cost batch can run too long if you are posting too far into history (all depends on count of transactions per period).

2) "Some problems" means that sometime the Adjust Cost batch can post some roudings etc. to e.g. two year old Item Ledger Entry.

3) What do you mean by "This sounds interesting, but I seem not to be able to renumber an item."? You have some error or it is just impossible because your company processes?

mahesh · 2007-12-19

Hi Kine,
appealing answer but i want to ask dat As u mentioned above in second point "Adjust Cost batch can post some roudings etc. to e.g. two year old Item Ledger Entry". But when we specify 'Closed Period Entry Posting Date' before running Batch, how can it post roudings to ledger entries before specified date?

kine · 2007-12-19

It depends on NAV version. Older versions has no this "Closed period" date and were trying to post into closed period....

HsinChuMark · 2007-12-19

Hi Kine

thanks again. Sorry if my question was unspecific.

Regarding item numbering:

- I must use the item numbers as defined by the company

- If I want to follow your procedure "Rename old and create new with same no. with new costing method.", I can not renumber an Item because the system is prompting "You can not renumber an item".

Alex_Chow · 2007-12-20

kine wrote:

1) I do not recommend to use Average costing method. If you want to know average cost, it is better to do own report which will calculate that. Average cost is hard to "decode" and in case of some problems hard to correct. And the Adjust Cost batch can run too long if you are posting too far into history (all depends on count of transactions per period).

I'm not sure if I agree with you there. Navision average costing is very accurate and true to what you post into it.

Alex_Chow · 2007-12-20

HsinChuMark wrote:

Hi Kine

thanks again. Sorry if my question was unspecific.

Regarding item numbering:

- I must use the item numbers as defined by the company

- If I want to follow your procedure "Rename old and create new with same no. with new costing method.", I can not renumber an Item because the system is prompting "You can not renumber an item".

What's the exact error message you're getting? You can copy and paste the error message on to this forum.

Are you setup as an administrator? When you rename, are you sure everyone is not using the system?

HsinChuMark · 2007-12-20

Hi Alex,

yes, I am administrator and I have Super user permissions.

And nobody is logged on but me, and also on my desktop testing machine it keeps showing this message: " You cannot rename an item" whenever I want to change the number. This even is the case with a brand new item without any possible transactions on it.

Thanks for your help!

Kowa · 2007-12-20

Alex Chow wrote:

Navision average costing is very accurate and true to what you post into it.

I hope that in 5.0 it is finally sound. The older versions had some issues, especially 3.60. I agree that a FIFO System is far easier to correct. I've spent weeks with the Costing Error Detection Report on FIFO systems with millions of Item Ledger and Item Application Entries , and I'm happy that these clients didn't use Average Costing to make things even worse.

HsinChuMark wrote:

I can not renumber an Item because the system is prompting "You can not renumber an item".

The standard allows this, but some addons don't due to e.g. replication issues etc. Are you using LS Retail perhaps ?

HsinChuMark · 2007-12-20

Hi Kai

Thanks for your reply. LS? I use the "Life Sciences" add-on for quality control. Is this the reason that I can not renumber the item? Any suggestions on how to solve this?

Thanks a lot!
Mark

Kowa · 2007-12-20

You'll find LS Retail here http://www.lsretail.com/, it was just a guess because this prevents item renaming too. Your add-on must have some likewise function, for whatever reason. I would contact the retailer of the add-on to check why they implemented this function.

The function which prevents the costing method modification is TestNoEntriesExist-function in the Item Table. If you license does not allow you to access the C/AL code and you cannot rename the items, there is no option but to get a developer to modify this function to allow this when the inventory is 0.

But as kine has already said, this can lead to problems in the long run. For example, the FIFO cost adjustment adds rounding entries for purchases, whereas the Average cost adjustment adds rounding entries for sales if the sales have been fully appplied to the purchase, the sales are adjusted and the inventory value is not 0 which it should be if the remaining quantity of the purchase is 0.

Any revaluation or delayed item charges etc. which are posted after the costing method modification can trigger this process. So there is a good reason why the TestNoEntriesExist normally prevents this.

Alex_Chow · 2007-12-20

Standard Navision will allow you to rename an item. If a modification or an add-on is made to disallow renaming, you'll need to ask your solution provider to help you with this.

Costing Method Change - How to eliminate item ledger entries

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