Valuing your stock without question

A correct and complete stock value

Inventory is a major balance sheet item in many organisations and accountants therefore perform various checks on it. As an organisation, you want this stock valuation to be correct and complete. However, there are many questions about the accuracy of the stock valuation in Microsoft AX / F&O. What insights do you need to make sure the stock valuation in your organisation is correct and fully understood? Check them out under the heading practical examples. 

Optimising stock valuation; practical examples

We have carried out the following optimisations for various customers in different sectors:

• Various surcharges were taken into account in the comparison between purchase price and PPP, which reduced the number of differences and ensured the correct comparison was made.
• Corrections were made to incorrectly booked receipts in order to reconcile the issues (and therefore margins) and stock in hand in both the sub ledger and general ledger.
• Re-design of the general ledger integration scheme of stock transactions to align the general ledger accounts to be used with the format of the financial statements.
• Standardisation of price units to make price comparisons and reconciliations easier.
• Setting up various stock value reports for insights into sub-data and reconciliations with the general ledger.
• (Re)deploying the required functionalities to achieve a correct and complete stock valuation process.

Do you recognise yourself in the above points or do you have other questions concerning stock valuation? Please do not hesitate to contact us!

How does inventory valuation work in Microsoft AX2012 and Microsoft Dynamics 365 Finance and Operations?

A frequently asked question is how stock valuation actually works in AX / F&O. The terms cost price, GIP, temporary issue and stock closure all come up, but what do they really mean? And at what point is the valuation methodology of e.g. FIFO or Weighted Average actually applied?

Experience and research [PWC research] show that many organisations have difficulty understanding the valuation mechanism in AX / F&O. Therefore, we have developed a workshop in which we consider the question of how to get a grip on the stock valuation and what you should (or should not) do to set up and manage the stock valuation correctly. 

Grip on the valuation of your stock

To what extent does your organisation have a complete grip on the valuation of the stock? Can you answer all the questions of the accountant with peace of mind and show the required substantiation without too much effort? Is there sufficient insight into the set-up possibilities? Are you sure that you perform all required processes to apply the valuation methods correctly and completely?

Mprise has developed a checklist that measures the use of stock valuation functionalities in AX / F&O in your organization in one day. You can see this as a thermometer: it will be examined to what extent the design possibilities, processes and reports & insight in AX / F&O are already sufficiently used for a correct and complete stock valuation. From this checklist, you receive a report in which, by means of scores, the current use is shown, including advice for relevant optimisations.

Research: is stock control possible in AX / F&O?

The research [PWC research] is now ten years old, but the conclusions are still relevant. The main conclusions are:

1. AX offers sufficient possibilities to carry out an adequately managed inventory process.
2. However, many organisations find it difficult to manage stock (valuation) in AX.
3. Many organisations find stock valuation difficult to understand.

In a previous blog, we indicated that awareness and sufficient basic knowledge can offer a solution to adequately carry out and manage the stock valuation. Is following our one-day workshop a good first step for you?