D365 Inventory Costs Reconciliation with G/L - Locus IT Services

D365 Inventory Costs Reconciliation with G/L

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D365 Inventory Costs Reconciliation with G/L

When you post inventory transactions, such as sales shipments, purchase invoices, or inventory adjustments, the changed item costs are recorded in item value entries. To reflect this change of inventory value in your financial books, the D365 Inventory Costs Reconciliation with G/L are automatically posted to the related inventory accounts in the general ledger.

For every inventory transaction that you post, the appropriate values are posted to the inventory account, adjustment account, and COGS account in the general ledger. The Automatic cost posting is described by the Automatic Cost Posting field on the Inventory Setup page.

Even though Microsoft Dynamics 365 inventory costs are automatically posted to the general ledger, it is still essential to make sure that the costs of the goods are sent to the related outbound sales transaction, particularly in situations where you sell goods before you invoice the purchase of those goods. This is referred to as cost adjustment.

D365 Inventory Costs Reconciliation with G/L Process

1. To Post Inventory Costs Manually

  • Choose the search icon, enter Post Inventory Cost to G/L, and then choose the related link.
  • Post inventory costs to the general ledger manually by running the batch job. When you execute this batch job, general ledger entries are created on the basis of value entries. You can post the entries so that they are summarized per posting group.

To see a list of errors before running the posting batch job, you can run the Post Invt. Cost to G/L – Test report. The test report dockets all the errors encountered during a test posting. You can then fix the errors, and run the inventory cost posting batch job without skipping any entries.

If you would like to simply get an overview of what values could be given to the general ledger without actually executing the posting, you can run the Post Inventory Cost to G/L batch job without actually posting the values to the general ledger. You do this by clearing the check mark from the Post field on the request page.

This way, when you run the batch job, the report is produced showing the values that are ready to be posted to the general ledger, but they are not posted.

2. To Audit the Reconciliation Between the Inventory Ledger and the General Ledger

  • The Inventory – G/L Reconciliation page provides the following:
    • Exposes reconciliation differences by comparing what is recorded in the inventory ledger and in G/L.
    • Shows un-reconciled cost amounts in the value entries in the inventory ledger as if they were linked to the relative inventory related accounts in G/L and compares those to the totals actually recorded in the same accounts in G/L.
    • Reflects the double entry structure of G/L by visually presenting data as such.
    • Lets users drill down and see the entries that make up the cost amounts.
    • Includes filters to narrow the analysis by date, item, and location.
    • The Name column on the far left in the grid lists the various G/L account types that are associated with inventory.
  • The InventoryInventory (Interim) and WIP Inventory columns show the invoiced, non-invoiced, and WIP totals of each G/L account type.
  • The Total column shows the sum of the value entry amounts in the three inventory columns.
  • The G/L Total column shows the amounts for each G/L account type that exists in G/L.
  • The Difference column represents the difference between the value in the G/L Total and Total fields.

When you have entered all relevant filters, choose the Show Matrix action. The data is calculated and the matrix page appears. In the grid on the far left column, the different general ledger account types that are associated with the inventory are displayed.

The grid then shows the WIP, invoiced and non-invoiced inventory totals for each of these account types. These totals are calculated from the value entries. The next columns will show the totals calculated from the general ledger entries for the same account types.

Choose the amount in any of the total fields to see the inventory report entries that were used to calculate the totals. For the inventory totals, entries of the inventory report are the sums of the value entries for the items. For the G/L totals, entries of the inventory report are the sums from the general ledger entries. For more information on D365 Inventory Costs Reconciliation with G/L, please contact us.

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