never run Adjust Cost Item Entries

hi all,

i am wonder, what is really going to happen if we never do any ACIE job?

i have stopped doing it for 4 months, just courious to see what happen. however, i couldn’t find anything strange. i can see only fewer check mark to item ledger entry table.

please help me to understand.

thank you.

If you have checked Automatic Cost Posting in Inventory Setup, AND if you never sell before purchase (that means, never have negative inventory), the costs might be OK, but, just to be sure, you should occasionally run the ACIE.

Unless every item’s “unit cost” and “last direct cost” are the same, and every transaction exactly matches these, then not running Adjust Cost will result in incorrect inventory valuation. Running Adjust Cost is a required function of the system. Even if you have “Automatic Cost Posting” turned on.

The scope of the issues will depend on how your system is used. For example, if you are using production, the Adjust Cost is used to flush WIP. WIthout running adjust cost this value remains in the WIP account.

babrown, your’e completely right - I didn’ t take into consideration, that

never happens in real life, especially for longer periods. I can excuse myself only with writing “might be OK” in my previous post[:$]

in real situation, what you mean by “incorrect inventory valution” is presented by reports: Inventory Valuation & Inventory Valuation - Cost Spec. , don’t you?
next thing, just want to confirm, the result of this ACIE is a change in the Unit Cost of Item (table, or see it in Item Card) ; am I correct?
then also we will still need to post the adjustment lines that system made, into GL - using Post Inventory Cost to GL ; am I correct?

with these behaviour, I have an opinion that it may cause uncontrolled entries to GL - which we might not want it to be modified or posted? Please share what do you think on this?

the manual or back/for-ward flushing can rightaway posted to GL by having Expected Cost Posting checkied in Inventory Setup Card. do you mean something different than this?

all your opinions are really helping me … thank you!

I am referring to the cost posted to inventory and GL. The are initially based on “unit cost” and are adjusted to the applied-to entries cost by the adjust cost process. WIthout regularly running adjust cost you will not have accurate costing.

In production, I am referring of the flushing of WIP in the GL. Output is initially posted to the item’s WIP account. Adjust cost moves this value to the item’s inventory account.

If you never run it your costs are never adjusted correctly. You buy an item for $10, you sell it, the cost is $10, then the purchase invoice comes in and it is processed at $11. If you never run the routine the true cost is never known and the reflection on inventory is never seen.

Why would you not run it? If you are having issues have you modified it?