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Setting Up Inventory Valuation and Costing

To make sure that inventory costs are recorded correctly, you must set up various fields and windows before you begin to make item transactions.

The following table describes a sequence of tasks, with links to the topics that describe them.

To See
Set a costing method for each item to govern how its incoming cost is used to assess inventory value and the cost of goods sold. How to: Register New Items
Ensure that the cost is automatically posted to the general ledger whenever an inventory transaction is posted. Automatic Cost Posting field in the Inventory Setup page
Ensure that expected costs are posted to the general ledger to see from the interim G/L accounts an estimate of the amounts due and the cost of the traded items before they are actually invoiced. Expected Cost Posting to G/L field in the Inventory Setup page
Set the system up to adjust for any cost changes automatically every time you post inventory transactions. How to: Adjust Item Costs
Define if the average cost is to be calculated per item only or per item for each stockkeping unit and for each variant of the item. Average Cost Calc. Type field in the Inventory Setup page
Select the period of time you would like the program to use for calculating the weighted average cost of items that use the average costing method. Average Cost Period field in the Inventory Setup page
Define inventory periods to control inventory value over time by disallowing transaction posting in closed inventory periods. How to: Work with Inventory Periods
Ensure that sales returns are applied to the original outbound transaction to preserve inventory value. Exact Cost Reversing Mandatory field in the Sales & Receivables page
Ensure that purchase returns are applied to the original inbound transaction to preserve inventory value. Exact Cost Reversing Mandatory field in the ´Purchases & Payables page
Set up the rounding rules to apply when adjusting or suggesting item prices and when adjusting or suggesting standard costs. Rounding Method page

See Also

Dynamics 365 Business Central
Managing Inventory Costs
Working with Dynamics NAV
Finance