Enterprise resource planning (ERP) solutions like Microsoft Dynamics NAV (formerly Navision) act as a company’s central nervous system, combining the financial and operational systems into a single, convenient, and highly efficient platform.
And Microsoft Dynamics NAV is now Microsoft Dynamics 365 Business Central.
In Navision for the Inventory Valuation Report shows the value of the on-hand quantity of each inventory item. This report calculates the value using the selected costing method and the quantity on hand, regardless of whether the quantity has been invoiced.
If your intent is to get inventory valuation and tie values to the G/L, you probably want to use the Inventory to G/L Reconcile. This report reconciles the inventory printed in the Inventory Valuation report to the amounts posted to the general ledger in the balance sheet inventory accounts.
These amounts can be different because uninvoiced purchase and sales orders with items that have been received or shipped will appear in the Inventory Valuation report but will not be posted to the general ledger. These amounts can also be different because of not running periodic activities in a timely manner. This report detects and reports on all these differences.
In addition, whether your inventory value in the G/L includes expected cost, well, that is dependent on how you have “Expected Cost Posting to G/L” set in Inventory Setup. This field determines if the program posts expected costs to interim accounts in the general ledger allowing for an estimate of the cost of received items before receiving the purchase invoice.
If you place a check mark in this field, and there are already expected cost value postings, the program posts these expected-cost value entries to the general ledger the next time you run the Post Inventory Cost to G/L batch job.
Expected costs are posted to interim accounts in the general ledger. If you want to post expected costs, you must set up interim accounts for the relevant posting groups.
The Inventory Valuation Report’s values are the first column on the Inventory to GL Reconcile.
The column Inv. Posted to GL should always balance to your general ledger. This does assume that you have the ‘direct posting’ flag on your inventory accounts in the general ledger turned off or unchecked so that accruals and adjustments are not being posted to these accounts.
You might see vales in the Pending Adjustments column(s) if you have not run Adjust Cost – Item Entries. There is the misconception that if you turn on Automatic Cost Posting that you don’t need to run the Adjust Cost routine. However, if your costing method is LIFO or FIFO or you are using production orders, as examples, the adjust cost is necessary. It should be run at a minimum once per month. Your circumstances could be different and thus affect the adjust cost requirement differently.
Hope you find this information helpful,