Hello, I would like to ask the experts in this form on their thoughts on how to enter the inventory balances as we move from legacy ERP into AX 2012 (starting jan 1st we would like to use the system). I found a very post related to nav about inventory balances here in the forum. Appreciate if someone could help.
The following is related to Nav but I would like to know what is the best way for AX 2012?
"When moving from a legacy system into Dynamics NAV (Navision), one of the areas you want to try and avoid is messing with the inventory G/L accounts. Most systems are usually pretty good with open A/R and A/P accounts, they can be transferred using the “posting back to the same account” technique that most implementers do. The beginning A/R and A/P G/L accounts would be based on your entry on the General Journal. This is assuming that the A/R and A/P aging reports matches the G/L.
Inventory valuation is one of the areas where we find the most discripencies based on what is entered on the Item Journal from the physical count and the inventory valuation report from the legacy system. Depending on your requirements, sometimes it doesn’t make sense to go through line by line on the item journal to see where the differences are.
A rule of thumb I always go by is to let Navision determine what the inventory value should be in the G/L based on the positive adjustments posted from the Item Journal.
To accomplish this, do the following:
Suppose you have the following G/L accounts:
11000 - Inventory
58850 - Inventory Adjustment
When posting a positive adjustment in the Item journal, it will post a debit to Inventory and credit to Inventory Adjustment.
When you’re ready to enter your beginning G/L balance, enter the G/L balance for Inventory to account 58850. This way, the difference between the inventory G/L balance from the legacy system and Navision will be reflected on account 58850.
If you do not want to reflect the adjustment in the current period due to financial reporting reasons, you can adjust the difference into an asset account. We usually recommend create a separate account (i.e. 11100 - Inventory Suspense) to store this difference until you can depreciate it.
By not posting any general journal entries to the inventory accounts, you’ve ensured that inventory valuation reports will ALWAYS match G/L, making everyone happy in the process."
Yes it is the same approach basically - use a movement journal and set the offset account to the data take on account which is where you posted your opening stock valuation as part of the TB and if done correctly the stock element will be zero.
Thank you Adam. I would like to clarify - “use a movement journal and set the offset account to the data take on account which is where you posted your opening stock valuation as part of the TB and if done correctly the stock element will be zero.”
1.So, the stock balance is brought in through Inventory movement journal - here, I assume the offset account is the inventory adjustment journal or a separate account (if we don’t want to post in the period).
With reference to “data take on account where you posted your Opening stock valuation” - is it done through the General Journal entry? What does this account refer to? Assuming I have the following set up,
Well some businesses prefer the approach of creating accounts in the general ledger to reconcile the opening balances. This would mean you would put your opening inventory balance from your TB to a “stock opening account”, then when you bring in your opening stock in the movement journal the offset is the “stock opening account” - which if done correctly will balance to zero. You can replace the “stock opening account” with any account, so your inventory adjustment account works, unless of course it has a balance - then rather than zero you need to reconcile it back to the starting balance.
Thank you adam for the clarification and this is the approach we will be taking as it seems a very good option. On a related to note, does inventory movement journal allow us to bring in both financial and on-hand ? Regarding the AP/AR recon with GL, I didn’t understand the 'post back to same account" approach or what is the best practice here.
On the TB you will bring in the balance of AR to a “data take on account”, and the offset on the AR journal will be the “data take on account” making this zero.
Thanks Adam. So we will create dummy ledger account “data take on account” and input the beginning AR balance which is going from the TB of legacy ERP. Then we would import the general ledger for AP whose offset is the “data take on account”. Its a same approach we are taking for the inventory.
sorry typo - i meant to say general journal as supposed to General ledger for entering the AR and AP balances. We are not bringing in AP/AR invoices and payment
If you are not bringing in the detail of the AR and AP how are you chasing debt and paying people? If you do this then there is no need to do anything except put the total into the balance account on the opening balances import, but it will not work form a detail perspective.
If you are moving from another ERP system to Microsoft Dynamics AX, you must migrate master and reference data.
Note
We recommend that you do not migrate transactional data or historical data to Microsoft Dynamics AX. Instead, close all open transactions before migrating, if it is possible. Maintain the database that contained your previous transactional data for reporting and compliance purposes.
However we may choose to bring in the Open Sales/Purchase/Production orders, then I would assume that we absolutely need to import open AP/AR invoices/payments.
then, we need to recon AP/AR with GL as well as recon Inventory with GL. Is that correct?