Adjust Cost Entries generates lots of unexpected entries

Adjust Cost Entries generates lots of unexpected entries
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Joe Gorman
Joe GormanDec 07, 2022 12:53 AM
Hello, I want to run the adjust cost routine which we currently have set to “Always”, in a nightly …

1. Adjust Cost Entries generates lots of unexpected entries

Joe Gorman
Posted Dec 07, 2022 12:53 AM

Hello,

I want to run the adjust cost routine which we currently have set to “Always”, in a nightly job to hopefully reduce the locking we are seeing but when I ran a test run in a test company there were a lot of unexpected entries. Firstly as I say Automatic Cost Adjustment is set to “Always” but also so many entries were for very significant amounts. I see some entries for 0.01$ or for < 5.00$ which I expect are rounding adjustments, but I also see loads for 18 to 20K$. Even higher. There are some big totals to inventory and variance accounts,
Before I turn this on in LIVE I want to understand the source of the entries.

Could it be some transactions where missed with the setting to “Always”?
There is a field “Applied Entry to Adjust” in the Item Ledger Entries table, if this is set to yes does that mean that this entry has yet to be adjusted?

I haven’t seen any MS documentation that states conclusively how this field is toggled.
On BC version 18

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Joe
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2. RE: Adjust Cost Entries generates lots of unexpected entries
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Kim Dallefeld
Posted Jan 24, 2023 10:34 AM
I have lots of comments and questions for you.
First, when you set this to Always, as is recommended by many, you will encounter that it take too long to run causing performance and locking issues. And with this setting you can hit errors due to conflict with the Allow Posting From Date in General Ledger Setup or User Setup. You do need to run in a job queue after hours, so you are on the right track.
Second, you should have been running this from day one in production or you inventory value and cost of goods are not accurate. You would see this in the Inventory to GL Reconcile Report.
Finally, What does Cost Adjust do, it matches decreases in inventory value to increases in inventory value. Imagine the situation where you receive inventory, use that inventory into a finished good or a sale, and then the process the vendor invoice. And the vendor invoice has a different unit cost than was on the purchase order at receipt. Your finished good (which could be sold) or the sale of the inventory are both carrying an incorrect cost. Adjust cost, takes the difference and moves it through the system based on the transaction (for the finished good produced, it adds to inventory value and for an item sold, it moves to cost of goods.)
I honestly have not looked at the field that you mention in your question.
Hope this helps, I’m happy to offer further assistance.

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Kim Dallefeld, MVP, MCT Kim@Dallefeld.com
CEO/Principal Consultant
Dallefeld Consulting, LLC

NAVUG Legend
NAVUG All-Star
NAVUG Board and Programming Committee
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3. RE: Adjust Cost Entries generates lots of unexpected entries
Joe Gorman
Posted Feb 13, 2023 07:51 AM

Thanks so much for your response, Kim.
To answer some of your questions: I believe the adjust cost has been set to “Always” since day one so our costs should be “adjusted” but what I found since posting my question was a lot of our opening inventory balances were entered with the incorrect item cost and when that cost was later changed and when we ran then ran the routine in a job or wide open manually, the new costs generated some new GL entries once the transactions were updated as the routine “moves it through the system”.
This seemed to explain most of our new entries so our accounting team has an answer.
Regards,
Joe

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Joe
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4. RE: Adjust Cost Entries generates lots of unexpected entries
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Andrew Good
Posted Feb 14, 2023 07:48 AM

Other activities and choices in your BC setup can affect Adjust Cost – Item Entries too. If you are using manufacturing and purchase invoices are left open (not invoiced) for a long time, then the adjust cost has more work to do for each purchase invoice when it is posted. Also, you can check your Item Ledger Entries where Completely Invoiced = NO, this will give you an idea of what it not yet adjusted. It is best if your users perform house keeping regularly and ensure that Purchase Invoices are posted for all receipts (non missed) and that production orders are finished quickly.

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Andrew Good
President
Liberty Grove Software
Oakbrook Terrace IL
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