What to expect when processing an Inventory transfer on Microsoft Dynamics GP 9.0 or later that originated on Microsoft Business Solutions-Great Plains 8.0

An Inventory Transfer for an Average Cost item has been posted and the Average Cost is recalculating differently than what was expected.

Symptoms

Consider the following example:

1. An Inventory Item with Item Number AVERAGE was created.

2. An Inventory Adjustment was posted for AVERAGE with a quantity of 10 and a cost of $1.00 using the date of 4/1/2017 into site WAREHOUSE. 

3. Another Inventory Adjustment was posted for AVERAGE with a quantity of 10 and a cost of $2.00 using the date of 4/2/2017 into site WAREHOUSE.

4. An Inventory Transfer was posted for AVERAGE with a quantity of 10 using the date of 4/3/2017, transferring the inventory to NORTH from WAREHOUSE.

Cause

In the example, if all of the steps that took place happened when using Microsoft Dynamics GP 9.0 or later, you would see the average cost at this point in time show as $1.50. This is reflected by the ADJUNITCOST field in the IV10200 showing 1.50 for the newest transfer into the NORTH site.

When the Inventory Transfer takes place (Step #4) the system writes an outflow record into the IV10201 table.  This occurs because quantities at the WAREHOUSE site are being consumed.  The UNITCOST field in the IV10201 will be populated with the current cost since progressive dated transactions are being entered and there is no backdating.  In the exampe the current cost used would be $1.50 as this is the current cost of the receipt layer entered in Step #3.

Next, the receiving for the NORTH site is written into the IV10200 table.  The cost used for this receipt layer is matched to the outflow record written in the IV10201.  So the cost that the Inventory went out at from WAREHOUSE is the cost used for the receiving into NORTH.

If you had used Microsoft Business Solutions - Great Plains 8.0 and upgraded after processing the adjustments and prior to entering the Inventory Transfer (Step #4), the calculation will be somewhat different.  This is because of the new fields added to the IV10200.  These new fields will only be populated on the most recent receipt layer with a quantity on hand on the date of the upgrade. This process is often referred to as "stamping" the receipt layer. In the example above, the receipt layer entered in Step #2 would not be stamped, but the receipt layer entered in Step #3 would be stamped.

This could change the average cost calculation because when the Inventory transfer takes place (Step #4) an outflow record would not be written to the IV10201 table. This is because the layer that is being consumed is the first, unstamped layer. Any unstamped layer will not have a record written to the IV10201 table. So when the receipt record for the NORTH site is written into the IV10200 table it is not going to be pulling the cost from the IV10201 for the quantity being consumed. It cannot do this since a record does not exist. What happens in this case is that the system will then look to the IV10200 record being consumed and use the UNITCOST from that layer as the UNITCOST for the receiving into NORTH.

If that UNITCOST happens to be different than the ADJUNITCOST in the previously entered record in the IV10200, then there will be a recalculation of the average cost.

This may be confusing since the quantity on hand did not change and there was no backdating, so some may wonder why the cost does.

Make sure to understand the following:

 1. This is not going to happen once all of the unstamped receipt layers are consumed.

2. If you do not want to see this behavior occur for the unstamped records entered prior to the upgrade, then implement the Historical Inventory Trial Balance (HITB) Report and run the IV Reset process. This will stamp all of the unrelieved records in the IV10200 table. So when an Inventory Transfer takes place, all purchase receipt records would be stamped and write outflow records into the IV10201.

Resolution

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