A Beginner’s Guide to Postings and Closing stock in Dynamic 365 F&O

Guide to Postings and Closing stock in Dynamic 365 F&O

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.

Postings and Closing stock

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

ParticularDr.Cr.Common Account Required (Y/N)TypeSet up
Cost of purchased materials receivedXYRaw Material Inventory Account – 1220006Inventory Posting set up
Purchase expenditure, un-invoicedX
Purchase expenditure, un-invoicedX
Purchase, accrualX

Purchase Invoice

Particular Dr.Cr. Common Account Required (Y/N) Type Set up
Purchase expenditure, un-invoicedX
Purchase, accrualX
Purchase expenditure for productX
GSTX
Vendor balanceX
Cost of purchased materials receivedXYRaw Material Inventory Account – 1220006Inventory Posting set up
Purchase expenditure, un-invoicedX
Cost of purchased materials invoicedXYRaw Material Inventory Account – 1220006Inventory Posting set up
Purchase expenditure for productX

Posting while Production transaction

Picking List

ParticularDr.Cr.Common Account Required (Y/N)TypeSet up
Estimated cost of materials consumedXYRaw Material Inventory Account – 1220006Inventory Posting set up
Estimated cost of materials consumed, WIPXYWork in Progress Account – 1220011Inventory Posting set up

Route card/Job Card

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

Report as finished

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

X
YWork in Progress Account – 1220011Inventory 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 consumedXYInventory Posting setup
Cost of materials consumed, WIPXYWork in Progress Account – 1220011Inventory Posting setup
Manufacturing cost absorbedX
Cost of manufacturing consumed, WIPXYWork in Progress Account – 1220011Category/Resource/ Resource group
Indirect cost absorbedX
Cost of indirect cost consumed, WIPXYWork in Progress Account – 1220011Costing Sheet
Manufactured costXYFinished Goods Inventory Account – 1220013Inventory Posting setup
Manufactured cost, WIPXYWork in Progress Account – 1220011Inventory Posting setup

Posting while Sales transaction

Packing Slip

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

Sales Invoice

Particular Dr. Cr. Common Account Required (Y/N) Type Set up
Cost of units, deliveredXYFinished Goods Inventory Account – 1220013Inventory Posting setup
Cost of goods sold, deliveredX
Cost of units, invoicedXYFinished Goods Inventory Account – 1220013Inventory Posting setup
Cost of goods sold, invoicedX
RevenueX
Customer balanceX

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.

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I am a Functional Consultant (Chartered Accountant) at Dev Information Technology Ltd. I have 2 years of experience in Microsoft Dynamics AX/Dynamics 365 (ERP) and have worked on projects in private sector.

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