Costing Method changed

I recently had my costing method changed from standard to FIFO and have a lot of valuation problems; zero inventory has a value. Items have negative values and some have significantly more value than is possible. Where do I start to fix this problem. I had a Microsoft profession do this for me but he seems not to be able to advise me on how to fix this problem.

I recently posted this question in a response to a similar case so please excuse me for reposting but I’m just learning about use of forums.

What kind of M$ professional was that? I don’t mean to take away your hope of ever fixing this again, but just recently I was lucky I read this article: before being asked to change costing methods for a couple of items . My answer then was “No”.

I cant say what M$ professional but he was found through a certified provider and has done a lot of great work for us. I think that he erred on this item though. What I need to do next is really my question:

  1. I recommended using a 2nd opinion consultant. How do I choose one knowing his expertise in cost manufacturing?

  2. Should I change back to standard. We didn’t like standard because it didn’t show cost changes quickly enough and dumped variances into the Production Variance account which had too many entries to drill down on. Our cost prices change so rapidly with our devaluing dollar I needed to be on top of costs.

  3. Is there a way to go through the lengthy labor process to manually fix each inventory item. We have about 26 finished goods and 24 store rooms. The problem has mainly affected our Finished goods and a few of our raw material (we are a manufacturer).

  4. I’m hoping that the damage is not permanent but if it is what would I do?

Thanks for your response. I really appreciate it’s timeliness. I am so lost and confused.

On another note, if I was to

’ use a convenient numbering scheme to rename the item card to a name that contains a similar item number. For example, rename item number 1000 to X1000’

then I would have lost opportunity to compare prior year sales and other inventory reporting matters to current year in reports as the item numbers would be different.

Regarding your valuation problems - did you run the “Adjust Cost”-batch? Using Costing Method Standard or FIFO does not matter - that batch-job is critical in inventory valuation!

And yes, it is indeed possible to have zero-inventoy and values, mainly if:
*you have open (=un-upplied) item legder entries
*the “Cost Adjust”-batch hasn’t been run

Thanks, yes we have run the ‘adjust cost’.

I eventually found a consultant who has a program to fix this problem but after discussion and because we have only 27 items, we decided to fix the problem manually by closing out all pending transactions, zeroing the inventory and starting a new item … very carefully. Then posting inventory back into the new item. This seems to be working with our early tests. Keeping fingers crossed.