Expected Cost Posting to G/L
Modified on: Mon, Dec 12, 2016 at 2:57 PM
Does Navision support the following process in Purchasing and Accounts payable:
When a PO is 'received' the costs are distributed to the account specified on PO and sets up in an A/P Outstanding receipt GL account on the balance sheet. The invoice process then picks up the PO lines amount from the outstanding receipt file which in turn would then moves to Accounts Payable on balance sheet until cheque is issued.
The functionality is called "Expected Cost Posting to G/L" in Navision, and can be turned on from the "Inventory Setup" window: Warehouse > Setup > Inventory Setup. On the General Tab, there are check boxes for "Automatic Cost Posting" and " Expected Cost Posting to G/L".
A check in the Automatic Cost posting field indicates that, when posting items to an item account, Navision will automatically post to the inventory account, adjustment acct and COGS account in the GL. Note that even when this is turned "ON" it is still necessary to run the Adjust Cost - Item entries and Post Inventory cost to GL batch jobs periodically.
A check in the Expected Cost Posting field indicates that expected inventory costs (ie. receipts, shipments) will be posted to interim accounts in the GL. Prior to using this option, you must set up interim accounts for the relevant posting groups: COGS Account -Interim , Inventory Accrual Acct - Interim, and Inventory Acct - Interim.
ALSO, since this was not turned on initially, you must be cautious starting this implementation now, and this can be done in one of two ways:
1. Turn Expected Cost option on ONLY WHEN there are no partially received items in the system (ie. no receipts or shipments, return orders etc -- only open PO's; and AFTER the inventory batch jobs have been run (Adjust Cost - Post to GL).
2. Set up all o/s GL amounts to interim accounts by journal entry prior to turning on Expected Cost option. These values can be obtained by running the "Inventory to GL Reconciliation" report -- "Received not invoiced", "Shipped not Invoiced" amounts are calculated for this report. This report can also be used to post expected costs to GL manually for specified periods, if you decide not to use the "Expected Cost" option.
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