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April 12, 2019 - By Bredet Services

The purpose of cost adjustments is to provide correct inventory valuation.

Manual vs. Automatic

Manual
This function allows you as the user to run the costs manually through a batch job. The name of the batch job is Adjust Cost – Item Entries. This will adjust the costs on the inbound transactions (Purchases) unless the Default Costing Method is set to Average, then adjustments are made to inbound and outbound transactions.  If the batch job is not run, costs will not be adjusted and possibly inaccurate. It is best to run this job during non-working hours. The adjustments will be made on the same posting date as the related invoice. If the period is closed or the date does not fall within the Allow Posting From in the General Ledger Setup window, the system will use the first available date in the open period.

Automatic
This function will adjust costs as you post any transaction involving inventory (including production). The adjustment will only affect the item(s) in question.

Pro
– Costs are updated and accurate at all times

Con
– The system might be slow depending on how many transactions are being done affecting inventory in a given time

Automatic Cost Adjustments

This field enables how far back from the current date you would like the system to make automatic cost adjustments to be performed. This selection is important for both performance and the accuracy of your costs. Shorter periods such as day or week will affect the system less. However, you will still need to run the Adjust Cost – Item Entries batch job in case you post something that does not fall in the selection. The costs will not be accurate until you run this report.

  • Never: Never run automatic costs when transactions are posted
  • Day: Costs are adjusted if posted one day from work date.
  • Week: Costs are adjusted if posted one week from work date.
  • Month: Costs are adjusted if posted one month from work date.
  • Quarter: Costs are adjusted if posted one quarter from work date.
  • Year: Costs are adjusted if posted one year from work date.
  • Always: Costs are always adjusted regardless of posting date.

For example:

  • Jan 10, you posted a purchase receipt & invoice
  • Jan 15, you posted a sales shipment & invoice
  • On Feb 5, you post an invoice for freight on the original purchase order
  • If it was set to a month or quarter, the automatic cost adjustment runs and the appropriate adjustments are done.
  • If it was set to a day or week, the automatic cost adjustment does not run and the updated cost is not forwarded and the sales costs are not updated until you run the Adjust Cost – Item Entries batch job.

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