Inventory closing and Recalculation
How to do Inventory closing and Recalculation?
In D365 Finance & Operations, inventory closing, and recalculation are essential process and recommended to be part of the month close standard operating practices. In case these practices are not followed, companies may face issues like inventory miscalculations, inconsistent inventory values in defined dimensions.
Go to Inventory Management>Periodic Tasks>Closing and Adjustment.
Then from the Action tabs click on Close Procedure dropdown, in that click on Close Inventory.
After clicking on the Close Inventory a dialogue box will open in that select the Closing Period Code.
Then under the Post-Closing you can see the Run Recalculation after Closing parameter, enable this and then click OK for Inventory Closing.
Enabling this parameter will Run the Recalculation right after the Inventory Closing.
After clicking OK the system will run the Closing and Recalculation Batch Job.
This is how the Inventory Closing procedure takes places in D365 Finance and Operations.
What happens by Inventory month close and Inventory Recalculation:
– Inventory Month Close:
The system generates inventory closing journals and settlement entries for the closed transactions resulting into adjustments to update inventory accounts like inventory value and cost of goods sold. It blocks the inactive dimensions from being considered into any of the valuation process.
– Inventory Recalculation:
The system does an inventory revaluation to adjust inventory values based on the latest costs, market values and inventory valuation method selected (FIFO, LIFO, Weighted Average, Standard Cost).
By including inventory month close and revaluation as part of the month end SOPs, companies can achieve efficient inventory management.
Conclusion:
Inventory closing and recalculation in D365 Finance & Operations are critical processes for maintaining accurate inventory values and ensuring smooth month-end procedures. By performing these tasks regularly, businesses can prevent discrepancies, update inventory accounts effectively, and reflect true inventory costs based on the chosen valuation method.
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