Balancing General Ledger against Inventory has always been a tremendous headache. I have always spent several weeks handling Inventory-GL issues which theoritically would not take more than few days. The problem in our case is represented with "cost-adjustment" primarily which results from improper appliction of certain processes.
This headache has motivated me to create a sort of test-environment in order to detect all the associated factors affecting the IV-GL balance. Aside from the issues resulting from the improper application (which is not my topic now), I have found out that there is a specific case in MS Dynamics GP 10, in which the system contributes to the IV-GL imbalance, which might be called "Enter/Match Partial Cost Change". I will thoroughly explain this point as follows;
Stage 1 - Receiving a Shipment
Receivng Transaction Details:
Document Number | Type | Item | Quantity | Unit Cost | Extended Cost |
RCT000000889 | Receiving | A | 100 | 39.25 | 3925 |
Inventory Module:
IV30300
Item | TRXQTY | Unit Cost | EXTDCOST | IVIVINDX | IVIVOFIX |
A | 100 | 39.25 | 3925 | Inventory Warehouse | Accrued Purchases |
IV10200
Item | QTYRECVD | Unit Cost | EXTDCOST | ADJUNITCOST |
A | 100 | 39.25 | 3925 | 39.25 |
SEE30303
Item | TRXQTY | Unit Cost | EXTDCOST | IVIVINDX | IVIVOFIX | JRENTRY | Dr | Cr |
A | 100 | 39.25 | 3925 | IV Warehouse | Accrued Purchases | X | 3925 | 0 |
General Ledger :
GL20000
JRENTRY | Account Index | Dr | Cr |
X | Inventory Warehouse | 3925 | 0 |
X | Accrued Purchases | 0 | 3925 |
Stage 2 - Enter/Match Invoice:
On the Enter-Match winodw, I will suppose that part of the shipment will have the same Unit Cost (regardless of the quantity), while the other part of the shipment cost will increase or decrease (same result either in the increase or decrease.)
Enter/Match Transaction Details:
Document Number | Type | Item | Quantity Invoiced | Unit Cost | Extended Cost |
RCT000000890 | Invoice | A | 80 | 39.25 | 3140 |
RCT000000890 | Invoice | A | 20 | 50 | 1000 |
Inventory Module:
Inventory module assumes that all the cost layer is adjusted to have a unit cost of (50).Therefore, it calculates the difference between the old Extended Cost (100*39.25 = 3925) and the new Extended Cost (100*50 = 5000) and the difference between the two which is (1075) is debited on the inventory warehouse account.
IV30300
Item | TRXQTY | Unit Cost | EXTDCOST | IVIVINDX | IVIVOFIX |
A | 100 | 39.25 | 3925 | Inventory Warehouse | Accrued Purchases |
A | 0 | 0 | 1075 | Inventory Warehouse | COGS |
IV10200
Item | QTYRECVD | Unit Cost | EXTDCOST | ADJUNITCOST |
A | 100 | 50 | 3925 | 39.25 |
SEE30303
Item | TRXQTY | Unit Cost | EXTDCOST | IVIVINDX | IVIVOFIX | JRENTRY | Dr | Cr |
A | 100 | 39.25 | 3925 | IV Warehouse | Accrued Purchases | X | 3925 | 0 |
A | 0 | 10.75 | 1075 | IV Warehouse | COGS | Y | 1075 | 0 |
General Ledger :
On the other hand, General Ledger can detect correctly that the change on the unit cost is partial, while the other part of the cost layer still have the same cost. Therefore, it calculates the cost adjustment as follows;
Old Extended Cost = 100*39.25 = 3925
New Extended Cost = (80*39.25)+(20*50) = 4140
And the difference is 4140 – 3925 = 215
GL20000
JRENTRY | Account Index | Dr | Cr |
Y | Inventory Warehouse | 215 | |
Y | Accrued Purchase | 4140 | |
Y | COGS | 3925 |
As a result of the explanation above, GP creates an imbalanced Journal entries between GL and Inventory in this case specifically (partial change of the unit cost) because of having different modules behaviors.
I wish I could discuss this issue with the community members in order to gain further knwoledge on the IV-GL behaviors regarding cost-adjustment.
Best Regards,
Mahmoud Saadi