Dynamics GP and Dynamics 365 Business Central both have great options to manage financial periods therefore controlling what date ranges users can post into.
In this post I’ll explore how this is achieved in both products, and point out what I think are the key benefits of each solution.
Dynamics GP
In Dynamics GP you can open and close financial periods using the “Financial Period Setup” window as per below
There’s a couple of key takeaways here:
This is a global setting therefore the configuration of this window affects all users of the system. i.e. you can’t allow some users to post into certain periods on an individual basis.
You can close the financial period for one series, (or ledger) while leaving another series open. For example, in the configuration above you can post a Sales transaction with a GL posting date of March, however you can’t post a Purchasing transaction with a GL posting date of March as that has been closed.
Dynamics 365 Business Central
In Dynamics 365 Business Central you can control allowed posting dates in two separate places.
The first is by entering a specific date range in the General Ledger Setup as per below.
The next is at user level via the User Setup window:
If you haven’t specified a user as having a different “Allowed Posting Date” range in the User Setup window then they are bound to the allowed posting dates in the General Ledger Setup.
The key takeaways here are:
You can have different allowed posting dates for different users.
You can’t completely close one series (ledger) and have another still open.
Conclusion
I think both systems have great features.
I love the way you have the flexibility to only close down certain series (ledgers) in Dynamics GP, as I imagine in the real world departments aren’t ready to close at the same time.
I also like how in Dynamics 365 Business Central we can close a financial period using the “General Ledger Setup” window for the majority of users however you can configure some users, for example a financial controller, to have the flexibility of posting across a larger date range.
Perhaps one day one of the products will incorporate both ideas 🙂
Thanks for reading!
Thinking of making the move to Business Central? We can help
Although not a regular occurrence, from time to time users need to post a VAT only invoice onto the sales or purchase ledger. If this happens below are the steps you can take to do this:
Please note these steps are specifically for a Purchase Invoice however it should work the same for a Sales Invoice.
Step 1: Add a new VAT Product Posting Group
First go to “VAT Product Posting Group” and add a new VAT Product Posting group for FULL VAT as per below
Step 2: Configure VAT Posting Setup
Next we need an additional FULL VAT entry in the “VAT Posting Setup” matrix as per the screen shot below. I’ve included FULL VAT twice, once with a blank “VAT Bus. Posting Group”, and once with a “VAT Bus. Posting Group” of DOMESTIC.
Please note I’ve set the system up this way so if entering a VAT only invoice via a “Purchase Journal” I only have to populate the “VAT Prod. Posting Group” whereas if I were to enter the invoice via “Purchase Invoice” its likely the supplier would have a “VAT Bus. Posting Group” of DOMESTIC. Setting the system up this way covers both scenarios.
Step 3: Entering the VAT only invoice via a “Purchase Journal” window.
In this example I’m entering a ÂŁ100.00 VAT only invoice via the “Purchase Journal” window.
To do this I’ve entered the invoice details as follows:
Just to confirm, I’ve selected a document type of “Invoice” and the Vendor account of “1000”. Then for the “VAT only” element to work I’ve selected the following for the various columns:
Bal. Account Type = G/L Account
Bal Account No. = 46330 (this is the VAT account specified in the VAT Posting Setup)
Bal. Gen Posting Type = Purchase
Bal. VAT Bus. Posting Group = BLANK (I could select DOMESTIC as well if I like)
Bal. VAT Prod. Posting Group = FULL VAT
Please note using the “VAT Posting Group” setup outlined in my screen shot above a combination of a blank “VAT Bus. Posting Group” and a “VAT Prod. Posting Group” of “FULL VAT” equates to 100% full VAT
If I now preview the posting on this transaction I can see 3 G/L Entries and one VAT entry:
If I drill down on the G/L Entries this shows the full amount posting to the VAT control account specified in the VAT Posting Setup. (as this is a Purchase Invoice the credit side goes to the Creditors Control Account):
And when I drill back on the VAT entries I can see a VAT entry for the full amount:
Step 4: Entering the VAT only invoice via the “Purchase Invoice” option
Once in the “Purchase Invoice” page I enter the invoice line as per below.
To confirm, I’ve entered the line as per below:
Type = G/L Account
No. = 46330 (this is the VAT account specified in the VAT Posting Setup)
Vat Prod. Posting Group = FULL VAT
Now when I check the “Statistics” on the invoice it shows the full amount to VAT:
Also, when I preview the posting I can see G/L entries to the VAT account and a VAT Entry of the full amount:
Step 5: Ensure FULL VAT is included on the VAT Statement
Once you have posted the transaction you should also ensure the new “VAT Prod. Posting Group” (i.e. FULL VAT) is included on the VAT statement so any transactions posted to this are picked up correctly when reporting the VAT.
As you can see below I’ve included this in the Purchases section:
I hope this helps anyone who needs to post a VAT only invoice in Dynamics 365 Business Central.
Recently I’ve been looking into how the “Unit Cost” is calculated for items using the “FIFO” costing method. I’ve found even if the item is set to “FIFO” the Unit Cost still displays an “Average Cost”. What’s more, depending on your “Inventory Setup”, this “Average Cost” might not be an as it seems either.
The answer lies in the role of the “Automatic Cost Adjustment” setting in “Inventory Setup”. (and therefore the “Adjust Costs – Item Entries” batch job)
In this post I’ll walk through a series of postings and check back on the “Unit Cost” while also checking the “Value Entries” to see what costs are being posted to the GL.
Here goes 🙂
Unit Cost when “Automatic Cost Adjustment” set to ALWAYS
In the first test I set the option “Automatic Cost Adjustment” to ALWAYS in my Inventory Setup as per below:
I then created a brand new item with a costing method of FIFO and gave it an initial “Unit Cost” of ÂŁ10.00
With this configuration I then received and invoiced the following quantities and values:
A Purchase Order with a Quantity of 5 and a unit cost of ÂŁ20.00
This changes my original “Unit Cost” to ÂŁ20.00.
A Purchase Order with a Quantity of 5 with a unit cost of ÂŁ50.00
Now when I check the Unit Cost on the Item page its showing as ÂŁ35.00.
So why is this, and what cost will be posted when I sell the item?
If you drill back on the “Unit Cost” the answer becomes apparent via the “Average Cost Calc. Overview” page:
This is showing that we have a quantity of 10 in inventory at a total value of ÂŁ350.00 giving an average cost, and therefore a Unit Cost, of ÂŁ35.00.
Selling an item
Things get really interesting when I now sell an item.
According to FIFO rules, when we sell an item, the system should post the actual cost from the first receipt (i.e. first in, first out). This cost isn’t ÂŁ35.00, as is shown in the Unit Cost, it should be ÂŁ20.00.
To see what happens I’ll ship and invoice a Sales Order for a Quantity of 1 as per below. (as you can see the Unit Cost displayed is ÂŁ35.00)
Firstly, let’s check the “Unit Cost” on the item.
After posting the sales order if I now check the “Unit Cost” on the item you can see this has *automatically* (more on this later) been recalculated as per below:
Its now showing ÂŁ36.66667 because we have a total of 9 in inventory at a total cost of ÂŁ330.00 giving us an “Average Cost” of ÂŁ36.66667 i.e. 330/9=36.66667.
So, what cost was posted to the GL for the Sales Order? Did the system post ÂŁ35.00 or ÂŁ20.00?
For this we’ll dig into the “Value Entries” on the item. As we can see the system posted an initial cost amount of -ÂŁ35.00, as per the “Unit Cost” and then *automatically* posted an adjustment entry of ÂŁ15.00 giving the correct FIFO cost of ÂŁ20.00
The key takeaway here is the reason we get the additional “adjustment” posting of ÂŁ15.00 *automatically* is because we have the “Automatic Cost Adjustment” setting switched to ALWAYS in the Inventory Setup.
As I understand it having this switched to ALWAYS runs the “Adjust Costs – Item Entries” batch job every time you post a transaction therefore posting the correct FIFO cost *automatically*.
Unit Cost when “Automatic Cost Adjustment” set to NEVER
Now, let’s test what happens to the “Unit Cost” and the FIFO costs when we have the “Automatic Cost Adjustment” set to NEVER.
First, I’ll create a new item as per below using the same initial “Unit Cost” and a costing method of “FIFO” as the previous item:
I’ll raise the same Purchase Orders as before however for brevity I won’t include screen shots of the Purchase Orders on this occasion.
When we now check the “Unit Cost” the system is still showing ÂŁ20.00 as per the first purchase order we received and invoiced. It hasn’t been *automatically* changed to the correct “Average Cost” of ÂŁ35.00.
However if I check the “Average Cost Calc. Overview” by drilling back on the “Unit Cost” it shows we have a quantity of 10 at a total cost of ÂŁ350.00.
So, why hasn’t the system updated the “Unit Cost” on the item on this occasion?
This is because we have switched “Automatic Cost Adjustment” to NEVER. This means the “Adjust Costs – Item Entries” batch job hasn’t ran when we posted the receipt and invoice for the Purchase Orders.
Therefore if we want to update the “Unit Cost” we must run the “Adjust Costs – Item Entries” batch job manually as per below:
Then click OK to run this for all items. (I could add a filter for my item if I’d prefer)
Now when I check the “Unit Cost” the correct Average Cost is now showing
Its also worth noting that if I leave the setting “Automatic Cost Adjustment” set as NEVER, when I post a shipment the “Value Entries” produced will be for the “Unit Cost” on the item i.e. now that is -ÂŁ35.00 as we have ran the “Adjust Cost – Item Entries” batch job. The additional “Adjustment” Value Entry will only be produced when I next run the “Adjust Costs – Item Entries” batch job.
Conclusion
The “Automatic Cost Adjustment” setting has a direct impact on what is shown in the “Unit Cost” of an item. This determines when the “Adjust Costs – Item Entries” batch job runs which, amongst other things, also recalculates the Unit Cost on items.
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