Change from FIFO to Standard Cost Model AX 2012 FP

Hi, we recently went live on Feb and our team is leaning towards changing the valuation model to Standard Cost. We have closed the inventory for Jan 31st, and Feb but the financial month periods are not closed. Does AX allow us to change the inventory model starting say Apr? I would like to understand the steps that we need to take in order to switch from FIFO to Standard Cost model.

From what I understand, except Standard Cost, the Inventory valuation model applies when we close the inventory and till then AX uses the running average price. We use AX 2012 FP.

Does Ax allow changing the costing model? What are the implications if we were to switch from FIFO to Standard Cost? How could we switch this? What do we need to take into account?

Appreciate your thoughts on this. Thank you

Hi,

Run a simulation in test environment. You will see the implications.

Regards,

Lee

I believe to do this you would need at the point of switchover remove all open sales orders, transfer orders, purchase orders, production orders and journals. Remove all open stock. Run inventory close. Set the new costing sheet values. Set the costing version. Update the costing method for the items. Book in the stock. Reload all orders. However I would first do this in a copy of the database before to ensure you are happy with the processing, results and subsequent processing costs. Never had to do it as I try to ensure the costing method, given its critical nature, is fully established, understood and agreed by the business prior to going live.

Thanks a lot Adam. I appreciate it. To remove the open transactions, could we probably use the built-in AX command related to this? or remove them manual?

  1. With Std Cost, I presume, we ought to “fix a cost price price” with a standard costing version in the item price table for each product - in order to capture the purchase price variance? Is that correct? Is this mandatory? currently we have entered the purchase, sales and item cost price from the “released product” detail page. Will this be sufficient. the reason being that there are over 3000+ products

Thank you