My sessions on this fall conference season

This fall Dynamics NAV conference season will start soon, in two months and it is the last moment to register on conference you planned to go. This season we expect thick events schedule and officially season will start in Orlando on Directions NA at September 17th. If you need the full list of Dynamics conferences, you can find here.

I’ll have my session on three of these conferences. First I’ll start with Directions NA, then continue with Directions EMEA and finish my season on NAVUG Summit.

orlandomadridnashville

I’ll have the same session on Directions NA and Directions EMEA – ‘Project Management Methodology in Dynamics 365 BE Implementation‘ and I already wrote about this topic.

My first session will be third day of Directions NA – September 19th at 3:15pm. As I said, I’ll have the same session on Directions EMEA, and it will be at the first day of conference, after Keynote – October 4th at 11:15am. After these two conferences where I’ll have soft skills topic (project management), I’ll have more technical topics on NAVUG Summit, starting from October 11.

My topics will be how to use Flows with NAV, where I’ll show not only technical topic, but also practical example how and where to use it. And then, I’ll have topic about variations in Manufacturing in NAV, where I’ll try to transfer my experiences in a lot of Mfg implementations. Schedule is published, but it will be changed for sure. I know this, because I need to provide two sessions in the same moment 🙂 … and I know myself, I cannot do it 🙂

See you there…

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Introduction in Dynamics NAV Costing

In almost all NAV implementations, we need to configure and use costing (inventory, manufacturing, jobs…). This is one of the main functionalities in all ERP solutions as well as in NAV. Because of that I will prepare the series of costing articles with an overview of the principles used within the costing area.

In this first part, I will make a small introduction about costing methods. Microsoft Dynamics NAV supports the five following costing methods:

  • FIFO
  • LIFO
  • Average
  • Specific
  • Standard

Now, in the following part I will just describe these costing types.

InvCost.jpg

FIFO

The FIFO costing method means “First In First Out”. It first assigns the value of the increases with the earliest posting dates on inventory. COGS is calculated using the value of the first inventory acquisitions.

An item’s unit cost is the actual value of any receipt of the item, selected by this explained FIFO rule. In inventory valuation, it is assumed that the first items placed in inventory are sold first.

LIFO

The LIFO costing method means “Last In First Out”. It first assigns the value of the increases with the most recent posting dates on inventory. COGS is calculated using the value of the most recent inventory acquisitions.

An item’s unit cost is the actual value of any receipt of the item, selected by previous explained LIFO rule. In inventory valuation, it is assumed that the last items placed in inventory are sold first.

Average

The Average costing method calculates a weighted average of the remaining inventory on the last date of the average cost period in which the inventory decrease was posted. COGS is calculated using the average value of the inventory acquisitions.

An item’s unit cost is calculated as the average unit cost at each point in time after a purchase. For inventory valuation, it is assumes that all inventories are sold simultaneously.

Specific

The Specific costing method overrides assumption about how cost flows from inventory increase to inventory decrease with the accurate cost information, creating a fixed application between these entries.

An item’s unit cost is the exact cost at which the particular unit was received.

Standard

The Standard costing method works with predetermined costs (rather than actual cost) for all inventory increases and it affects the value of the inventory decreases.

An item’s unit cost is preset based on estimated. When the actual cost is realized later, the standard cost must be adjusted to the actual cost through variance values.

Conclusion

This was only small introduction about costing types as preparation for the more advance knowledge about using costing in Microsoft Dynamics NAV. In the following articles, I’ll describe more about facts when users need to use these costing methods as best practices. I’ll write about all details in posting results and posting rules as well.

Posting Groups #8 – Revaluation Posting

In my last post, I have touched Revaluation process, but only for Standard cost changing. We can use Revaluation for other cases, as well.

If we change cost only for items on stock, it will be the same situation as on previous example. But, if we want to change cost for already sold or consumed stock, it will be with some differences. First, when we change the cost, we will get the same entries, as I already show in previous post. But, when we run Adjust Cost – Item Entries batch job, we will get the new G/L entries.

I made three scenarios:

In the first scenario, I have raw material with FIFO cost type. I consume this raw material on production order to produce finish goods, configured as also FIFO cost type. In this case, result of posting in G/L entry will be as following:

RevPOfifo

In the second scenario, everything was the same, but only finish goods was configured as Standard cost type. In this case, result of posting in G/L entry will be a bit different, as following example:

RevPOstd

And, in the third scenario, I change the cost on already sold items. In this scenario, G/L entries will be as following:

RevSO

Posting Groups #7 – Change Standard Cost

If you use Standard cost type for your Items and you want to change it, you need to use Standard Cost Worksheet. When you run Implement Standard Cost Changes command, all changes will be moved to Revaluation Journal.

When you post Revaluation Journal, you will get following G/L entries, if you have cost increasing:

std_rev_1

If you have cost decreasing, you will get the same Accounts, but the different values, as following:

std_rev_2

Posting Groups #6 – Manufacturing Posting (Std. Cost Type)

In my previous post, I describe all G/L posting results when we do with production, but using FIFO costing method. It this new example, I will describe results of posting when we have finish goods with Costing Method configured as Standard.

In this case, we use the same flow chart for posting groups, as I have described in my previous post.

In this example, when we post consumption and output, we will get following entries in G/L Ledger. In this case, we will get entries from cost of Item consumption and cost of Work Centers using, and value for output Item based on Standard Cost:

C&OJPstd

When we change status of Production Order to Finished, we will get additional G/L Entries. These are correction of standard cost on output Item and variance from standard to actual cost. You can find these entries in next table:

POsFstd

Posting Groups #5 – Manufacturing Posting

When we post manufacturing processes, we have Production Order as the base document. Then, we can use Production Journal (for posting in one step), or Consumption and Output Journals (for posting in two steps). Never mind, what you variant use, result in G/L Entries is the same.

In any case, we have some rules about using posting groups. Some posting groups are used from items, and other from work centers. In following chart, you can see how system uses posting groups in manufacturing posting.

Production Diagram

Difference in G/L Entries can be based on Costing Method you use for output items. It is not the same when you use Standard or some other costing methods. In this example, I will describe non-standard method (in this case I have used FIFO). I will describe using of standard method in next post.

In this example, when we post consumption and output, we will get following entries in G/L Ledger. These are only cost of Item consumption and cost of Work Centers using:

C&OJPfifo

When we change status of Production Order to Finished, we will get additional G/L Entries. These are cost of output Item, calculated from consumption Items and Work Centers usage. You can find these entries in next table:

POsFfifo