Inventory Close and Recalculation are Your Friends
Why should I? It is too much work. I am afraid of it. I don't know what it does.
For this blog, I will focus on Inventory Recalculation and Inventory Closing.
I will use FIFO costing as an example for Recalculation.
Changes Dynamics native costing 'average' to your chosen method (i.e. FIFO).
Is a prerequisite to Inventory Close
Is not required for Standard Cost method
is a separate process from putting an accounting period on hold.
provides further control by being able to prevent retroactive posting by day (vs. by period) and prevents posting to a closed date.
2.1 Why do Inventory Recalculation
If you process a transaction, let's say a Sale Order, D365 will use 'average' cost' for the original entry.
When you run Inventory Recalculation, D365 will change the Sales Order to FIFO costing.
I strongly recommend that Inventory Recalculation be run each morning (for yesterday).
This makes your trial balance up to date for your desired FIFO costing, and also makes review of the related Recalculation voucher simplified, because it is looking at recent transactions instead of a long cumbersome voucher covering numerous days or longer.
2.2 Why do Inventory Close
I highly recommend Inventory Close to be run each morning (as of yesterday).
Retroactive transactions can render existing reconciliations obsolete because the values have changed.
Normally, after Inventory Close, you may perform a daily reconciliation of the Inventory Value (sub ledger) vs. the Trial Balance (general ledger) without having to worry about someone posting retroactive transactions to the Inventory sub ledger.
Inventory close is a required step in the month-end closing procedure for all inventory models except moving average. You will be warned if you try to close a financial period without first performing the inventory close as of the period end date.
3.1 Process Inventory Recalculation
You may also run Inventory Recalculation for "today".
You can even filter it to run for a specific Item number.
If you change your filters, remember to reset them next time you run Inventory Recalculation.
Inventory management > Periodic tasks > Closing and adjustment > Recalculation
3.2 Process Inventory Close
I usually skip
"Check open quanities"
"Check cost prices"
and jump straight to "Close Inventory"
Inventory management > Periodic tasks > Closing and adjustment > Close procedure > Close inventory
You may undo an Inventory Close or Inventory Recalculation.
You may desire to do this if you have a large transaction that you intentionally want posted retroactively to a prior period.
You must perform Cancellations in reverse chronology (cancel youngest first)
Later on you may redo the Inventory Recalculations and Closings.
Remember, Inventory Recalculations and Inventory Closings are your friend.
Delaying Inventory Recalculation and Inventory Close only complicates Financial Analysis and delays accurate update of your financial values based on the chosen Inventory Costing Methods.