Hi all! In the legacy system the costing is average and in Navision it will be in FiFO. As I’m not familiar with the costing impact I have few questions for you. The item cost will be managed using FIFO for all items. It is Average at the moment. The cost will include the freight in the future. Actually there are some items that are not invoiced yet (the final price is unknown) and that could be issued on project and eventually invoiced. The cost migration is perceived to be challenging because of the change in the computation cost (average vs FIFO). Furthermore, uncosted items are probably processed differently in Navision. Questions 1. Actual cost is Average cost. What is the impact on migration? All items set at same cost on day#1? What about the uncosted items on day#1? 2. Are we going to continue to have uncosted items in inventory? (I believe not) Hence, cost must be entered at receiving. 3. Cost established in the appropriate currency? (example, determine it was purchased in $US) Thanks.
1. Actual cost is Average cost. What is the impact on migration? All items set at same cost on day#1? What about the uncosted items on day#1?
The uncosted items will be brought in as GRNI from open purchase orders as part of the set up of the new system - from your description I presume you will have automatic cost posting on and expected costing in use. With regards to the stock in stock that is fully invoiced then you should take the current “average” cost from the legacy system and bring this in as your fifo cost, unless the customer wants to value all current stock at the current replenishment value (LIFO) and bring this in as the FIFO cost. The accountant of the company will probably already have an idea of the cost they want to bring the current known stock in at. If they want to split this into known FIFO transactions this can be done, but it will be an additional line for each variance in cost.
2. Are we going to continue to have uncosted items in inventory? (I believe not) Hence, cost must be entered at receiving.
Yes, this is the expected costing process in Navision, where the expected cost is processed through the system until the purchase invoice is processed and the adjust cost item entry routine is run. It is important that the end customer understands this process to define the GL and posting groups appropriately.
3. Cost established in the appropriate currency? (example, determine it was purchased in $US)
Navision will convert and foreign currency transactions on costing to the home currency at the exchange rate used on the appropriate document.
Thanks Steven , Very clear as usual. BTW what is the meaning of GRNI?
Goods Received Not Invoiced [:)]