Hi!
Stock issues, transfers should be physically done on FIFO basis due to warranty period constraint from vendors.
Will this be done automatically just by specifying Costing Method as FIFO on the Item Card?
Thanks and Regards,
Beatrice.
Theoreticaly yes, but often it wont happen.
Unfortunately there are many issues that will override FIFO. Navision uses the Item Ledger Entry to determine how Items are issued, for both Physical and Finacial purposes.
Some examples:
Locations - If you buy 20 items over time, and transfer them to differnt locations, then the FIOF is then only specific to that location. So an item may be one week old, but was transfered, and thus could be sold before an Item that is six months old. THe case in compounded if the item is then returned back to the original location, because Navision bases FIFO on the POSTING DATE, of the Item Ledger Entry, not the Purchase Date of the item. For one client to fix this we added a new field FIFO Date, and use this to make sure the item is issed correctly.
Bins and Warehouse - If you have 2 items in stock, and do a warehouse pick for one of them, it is then pulled out of the FIFO chanel, and thus you could have an item sitting on the dock for 2 weeks, and during that time issue another item that is actually newer before the old one goes out the door. And this will be visible to an accountant that Looks at the GL and Value Ledger Entries, but not at the Bin movements.
Reservations Arrrggghhhh don’t even go there. If you have Auto reserve on, then strict FIFO goes out the door.
Serial numbers and Lot Numbers- see Reservations. Though this is not too much an issue, since most countries accoutning law, allows that serialized items may override FIFO rules provided the items are identifiable by serial number.
Variants, agian these are outside the scope of FIFO, but normally if a client wants a RED widget, and you identify RED Widgets a differnt to a GREEN widget, then you are OK. Just make sure that you are not using Variants for something that is not Identifieable ont he Stock Item.
Returns - these will apear in stock as brand new, I don’t think this is an issue (similar to Location), since you actually did sell the item, and technically bought it again from the customer.
Inventory Adjustments - these will mess up costing totaly, since adjustments are dated by posting date.
But … none of these issues is insurmountable. Like most things in Accounting, so long as you cna justify to the auditor how ti works and why it works that way, and its clear that there is no manipulation going on you will be fine. Just explain all these issues to them. OWrst is if the Auditor finds out something that you/ the NSC "Forgot " to tell them. They will not accpet that the NSC “did not know”, they will often look for deeper reasons.
Hope this helps.
By the way, are you an End user, if so this should have been part of basic training that you got from your NSC.
In fact, we got certified for Navision Financials 4.0, but Inventory was not part of Financials.
We were examined only in the following application areas:
General Ledger
Payables
Receivables
Fixed Assets
Resources and Jobs
Actually we are implementing Navision Financials 4.0 for a company and it’s our first implementation.
That is why I’ve got so much questions.
Regards
Beatrice.
Ah that makes it a lot clearer. Can I suggest you update your Profile and BIO, so that memebrs know a little about you,.it makes it easier to help you if we know your situation.