Simplifying IT, Empowering Businesses

Introduction

While talking about ERP in Finance, the topic of the process of properly posting accounts from various modules and submodules always seems to come up. This is a topic that has been frequently discussed in the comments section of our blog, and we have decided to make a proper post dedicated to it. This guide will help you deal with finding the closing value of stocks in main accounts while using Dynamic 365 F&O. Lets begin:

Agenda of document

1. Postings
2. Closing stock value
   • Work in progress
   • Finished product

Closing stock value and Postings

By summing the following 3 components we can get value for closing stock in particular ledger.

• Raw material
• Direct manufacturing cost
• Indirect manufacturing cost

In D365 F&O, we have to use posting profiles, categories and costing sheet for bringing above component together and putting them in right posting set up to get value for closing stock in particular ledger

Before moving towards posting setup we have to do a small set up in an item model group as follows.

We have to use common main accounts in many posting profiles for the right impact in closing stock value in ledger. For that we need to understand postings done in every transaction like purchase, sale and production.

For Example, we take following account to understand posting set up

• Closing Stock of Raw material: 1220006
• Closing Stock of Work in Progress: 1220011
• Closing Stock of Finished goods: 1220013

Posting while Purchase transaction

Product Receipt

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Cost of purchased materials received	X		Y	Raw Material Inventory Account – 1220006	Inventory Posting set up
Purchase expenditure, un-invoiced		X
Purchase expenditure, un-invoiced	X
Purchase, accrual		X

Purchase Invoice

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Purchase expenditure, un-invoiced		X
Purchase, accrual	X
Purchase expenditure for product	X
GST	X
Vendor balance		X
Cost of purchased materials received		X	Y	Raw Material Inventory Account – 1220006	Inventory Posting set up
Purchase expenditure, un-invoiced	X
Cost of purchased materials invoiced	X		Y	Raw Material Inventory Account – 1220006	Inventory Posting set up
Purchase expenditure for product		X

Posting while Production transaction

Picking List

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Estimated cost of materials consumed		X	Y	Raw Material Inventory Account – 1220006	Inventory Posting set up
Estimated cost of materials consumed, WIP	X		Y	Work in Progress Account – 1220011	Inventory Posting set up

Route card/Job Card

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Estimated manufacturing cost absorbed		X
Estimated cost of manufacturing consumed, WIP	X		Y	Work in Progress Account – 1220011	Category/Resource/ Resource group
Estimated indirect cost absorbed		X
Estimated cost of indirect cost consumed, WIP	X		Y	Work in Progress Account – 1220011	Costing Sheet

Report as finished

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Estimated manufactured cost -FG	X		Y	Finished Goods Inventory Account – 1220013	Inventory Posting set up
Estimated manufactured cost, WIP – FG		X	Y	Work in Progress Account – 1220011	Inventory Posting set up

Above all accounts get reversed when we end Production order so, we are not going to repeat that. extra accounts which are posted in end production order status are mentioned below.

End

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Cost of materials consumed		X	Y		Inventory Posting setup
Cost of materials consumed, WIP	X		Y	Work in Progress Account – 1220011	Inventory Posting setup
Manufacturing cost absorbed		X
Cost of manufacturing consumed, WIP	X		Y	Work in Progress Account – 1220011	Category/Resource/ Resource group
Indirect cost absorbed		X
Cost of indirect cost consumed, WIP	X		Y	Work in Progress Account – 1220011	Costing Sheet
Manufactured cost	X		Y	Finished Goods Inventory Account – 1220013	Inventory Posting setup
Manufactured cost, WIP		X	Y	Work in Progress Account – 1220011	Inventory Posting setup

Posting while Sales transaction

Packing Slip

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Cost of units, delivered		X	Y	Finished Goods Inventory Account – 1220013	Inventory Posting setup
	X

Sales Invoice

Particular	Dr.	Cr.	Common Account Required (Y/N)	Type	Set up
Cost of units, delivered	X		Y	Finished Goods Inventory Account – 1220013	Inventory Posting setup
Cost of goods sold, delivered		X
Cost of units, invoiced		X	Y	Finished Goods Inventory Account – 1220013	Inventory Posting setup
Cost of goods sold, invoiced	X
Revenue		X
Customer balance	X

By setting up above common accounts in posting profiles one can easily get value in closing stock accounts.

Tabs set up in above tables describe the posting path in which users need to arrange necessary posting set up. We will discuss the setup one by one.

Inventory Posting setup

Path: Inventory management > Set up > Posting > Posting

Posting setup contains six tabs under which users can set up relevant postings by combination of “group”, “All”, “Table”.

Category/Resource/Resource group

Category

Path: Production control> Set up > Routes > Cost category

Resource

Path: Production control> Set up > Resources > Resources

Resource Group

Path: Production control> Set up > Resources > Resource Groups

Costing Sheet

Cost management > Indirect cost accounting policies set up > costing sheets

To post indirect overheads in ledger one should have its cost group type to indirect, otherwise the system will not populate posting set up and other functions for setting up indirect overhead in the cost sheet.

Now, add a new node under the same head and then enter ledgers.

**Value which is posted with the ledger is always dependent upon the calculation group which is given in the item set up.

Conclusion

We hope that the blog was able to summarize all the important points for you, and that finding the value of closing stocks in your main account should be relatively easy now.

With the information mentioned above, you should also be able to figure out the perfect spot for the main accounts to gain a corresponding perfect value in the closing stock.

This should also help explain the easy method for generalizing the closing stock value posting process, and ensure that the posting is done in every stage of the transaction. If you have any questions relating to the topics covered here, please feel free to post a comment down below and our DEV IT engineers will be glad to assist you.