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    Provision for Landed Cost when Using Microsoft Dynamics NAV Standard Cost Method

    There are times when a company wants to add “Landed Cost Elements” to inventory as part of the procurement process. This could be freight, duty, drayage, or storage.

    The setup and accounting for a provision for landed cost when using the Standard Cost Method is different than when using all of the other costing methods in Dynamics NAV. Let me illustrate by looking at the setup for a FIFO item using a Dynamics NAV 2013 Item Card.

    If we wanted to add a provision for landed cost of 10% for this item, we simply put 10% in the Indirect Cost % field. If we invoice a purchase receipt for 150.00, then 165.00 will go to inventory, 150.00 will go to Accounts Payable, and 15.00 will go to the overhead applied account. (We could have also used the Overhead Rate field which would hold a fixed amount for the provision.)

    Item Card with Indirect Cost % field set to 10% and Costing Method set to FIFO

    Figure 1 – Item Card with Indirect Cost % field set to 10% and Costing Method set to FIFO

    Now, if I use a Standard Cost item and a 10% Indirect Cost %, and I post a Purchase Invoice for 5.00, I would expect that 4.80 would go to inventory, 5.00 would go to Accounts Payable, 0.48 would go to Overhead Applied, and who knows what to Purchase Price Variance.

    Setting a percentage for Indirect Cost while using Standard Costing Method

    Figure 2 – Setting a percentage for Indirect Cost while using Standard Costing Method

    Below is what you get when you post the Purchase Invoice.  It is not at all what you might expect:

    Purchase Invoice using Standard Costing Method and percentage for Indirect Cost

    Figure 3 – Purchase Invoice using Standard Costing Method and percentage for Indirect Cost

    When we set up an item using the Standard Cost Method, we need to use a fixed amount for the Provision for Landed Cost, to put the provision in the Overhead Rate Field, and to add that amount to the Item’s Purchase Standard Amount to give a total Standard Cost.

    Setting a fixed Overhead Rate with Standard Costing Method

    Figure 4 – Setting a fixed Overhead Rate with Standard Costing Method

    Here is what we now get when we post the Purchase Invoice with the above setup.  It is what you might expect:

    Purchase Invoice using Standard Costing Method and percentage for Indirect Cost

    Figure 5 – Purchase Invoice using Standard Costing Method and percentage for Indirect Cost

    To find out more about using various costing methods or any other Dynamics NAV costing topic, please contact ArcherPoint.


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    Reversing the Entire Production Order Consumption in Microsoft Dynamics NAV 2013

    (Without Keying in the items One by One)

    Occasionally there is a mistake made where Production Order Consumption is posted.  It is quite easy to fix the problem if there are only one or two lines that need to be reversed, but what if the entire consumption needs to be reversed for tens or hundreds of items on a single Dynamics NAV Production Order?

    In Dynamics NAV 2013 I created a Released Production Order for a Bicycle:

    Released Production Order for a Bicycle

    Figure 1 - Released Production Order for a Bicycle

    I then used the Dynamics NAV Consumption Journal to Calculate and Post the consumption for the Production Order:

    Calculate and post the consumption for the Production Order

    Figure 2 – Dynamics NAV Consumption Journal to calculate and post the consumption for the Production Order

    After I posted the consumption, I realized that I had posted the consumption for the wrong order, and I need to reverse all of the consumption for this order.

    I could open up the Consumption Journal and type in all of the items and the quantities.  This might be OK if there were only a few lines, but what if there were a hundred?

    Here is the trick:

    Open up the Consumption and then select “Calculate consumption”. Simply select “OK” and let it calculate.  The trick is to select the calculation based on “Actual Output”:

    Set the calculation based on “Actual Output”

    Figure 3 – Edit the Consumption Journal->Calculate Consumption and set the calculation based on “Actual Output”

    Now, when using Actual Output, you can see that the quantities are all negative:

    Consumption Journal showing negative quantities

    Figure 4 – Consumption Journal showing negative quantities

    And you can see that the component lines of the Production Order are returned to the original state:

    Component lines of the Production Order are returned to the original state

    Figure 5 – Component lines of the Production Order are returned to the original state

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.

    If you would like more information on this subject or another Dynamics NAV Manufacturing subject, please contact ArcherPoint.


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    Using the Standard Cost Worksheet in Microsoft Dynamics NAV

    If your company is using the Dynamics NAV Standard Cost Method, there are times when you need to establish Standard Costs for Purchase and Produced items.

    In Dynamics NAV there is functionality and a process for establishing Standard Costs that will update the Standard Costs for the Items, and, just as importantly, create a Revaluation Journal that, when posted, will keep the General Ledger in balance with the Inventory Subledger.

    Times when you might want to establish or reestablish Standard Cost for Items include:

    • When you add new items
    • When you find a significant mistake in the purchased item cost, the Production BOM, and/or Routing and want to make a correction
    • When there has been a significant change in the cost of raw materials
    • When there is a significant change in the Production BOM
    • When there a significant changes in the Production Process
    • Fiscal Year End Rollup and Revaluation

    This functionality for updating Standard Costs in Dynamics NAV is called the Standard Cost Worksheet:

    Viewing the Microsoft Dynamics NAV Standard Cost Worksheet

    Figure 1 – Viewing the Microsoft Dynamics NAV Standard Cost Worksheet

    Following is the process to establish new Standard Costs using the Dynamics NAV Standard Cost Worksheet:

    1. Populate the standard cost worksheet with the purchased items.
    2. Change the “New Standard Cost” to be what is expected to pay on purchases for the next fiscal year.
    3. Populate the standard cost worksheet with the work centers and machine centers.
    4. Change the work center and machine center direct costs, overhead %, and overhead rate as calculated for the next fiscal year.
    5. Roll up the standard cost for the produced items. The rollup will use the new standards for purchased items and work/machine centers contained in the standard cost worksheet—if the purchased item or work/machine center is not in the Standard Costs.
    6. Implement the standard cost worksheet.
      • This will update the item cards for both purchased and produced items.
      • This will also create a revaluation journal based on the difference in value of each positive item ledger entry (with a remaining quantity) and the new standard for the item.
    7. Post the revaluation journal.
      • This will post the differences to the General Ledger to bring the General Ledger into agreement with the Inventory Subledger.
      • This will also add the necessary Value Entries so that when the inventory valuation report is run the value of the inventory will be equal to the standard cost of the inventory and the unit cost on the item card will be equal to the standard cost for the item.

    Now let's take a closer look at the steps involved:

    #1 – Populate the standard cost worksheet with the purchased items. At this point there is only one way to suggest new standards—to adjust the old standard up or down based on a percent. ArcherPoint has worked with clients to suggest new standards in different ways. For instance, use the last direct cost from the item card as the new standard.

    Populate the Suggest Item Standard Cost fields

    Figure 2 – Populate the Suggest Item Standard Cost fields

    The result is that all of the purchased items with a standard cost method are brought into the standard cost worksheet:

    Items with a standard cost method are brought into the standard cost worksheet

    Figure 3 – All purchased items with a standard cost method are brought into the standard cost worksheet

    #2 – The Cost Accounting Department in conjunction with the Purchasing Department then populates the Standard Cost Worksheet with the New Standard Cost.

    #3 – Populate the standard cost worksheet with the work centers and machine centers:

    Populate the standard cost worksheet with the work and machine centers

    Figure 4 – Populate the standard cost worksheet with the work centers and machine centers

    The result is that the Work and Machine Centers are brought into the Standard Cost Worksheet:

    Work and Machine Centers are brought into the Standard Cost Worksheet

    Figure 5 – Work and Machine Centers are brought into the Standard Cost Worksheet

    #4 – Change the work center and machine center direct costs, overhead %, and overhead rate as calculated for the next fiscal year.

    Change the work center and machine center figures for the next fiscal year

    Figure 6 – Change the work center and machine center figures for the next fiscal year

    #5 – Roll up the standard cost for the produced items:

    Roll Up Standard Cost for the produced items

    Figure 7 – Roll Up Standard Cost for the produced items

    This will roll up the Standard Cost for the Produced Items and put them in the Standard Cost Work Sheet:

    Standard Cost for the Produced Items are rolled up and put in the Standard Cost Work Sheet

    Figure 8 – The Standard Cost for the Produced Items are rolled up and put in the Standard Cost Work Sheet

    #6 – Implement the Standard Cost Changes:

    Implementing the Standard Cost Changes

    Figure 9 – Implementing the Standard Cost Changes

    This will update the Item Cards with the new Standard Costs and will create a Revaluation to be posted to bring the General Ledger into balance with the Inventory Subledger

    A Revaluation will be posted to bring the General Ledger into balance with the Inventory Subledger

    Figure 10 – A Revaluation will be posted to bring the General Ledger into balance with the Inventory Subledger

    #7 – Post the revaluation journal.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.

    If you would like more information on this subject or another Dynamics NAV costing subject, please contact ArcherPoint.


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    How to Run Tables in Microsoft Dynamics NAV 2009 RTC or NAV 2013

    As a consultant who is not a developer, it has frustrated me to not be able to “Run Tables” as I used to do from the Dynamics NAV Classic Client Object Designer. I frequently need to Run Tables for diagnostic and analysis purposes. I then figured out a very simple solution.

    Example:

    You want to make a list of all of the Production Output for a period of time. To do this, you need to see all of the Item Ledger Entries in the system and then filter on Entry Type = “Output” and a Date Range.

    From any Item Card, drill down on Quantity on Hand:

    From Item Card, drill down on Quantity on Hand

    Figure 1 – From any Item Card, drill down on Quantity on Hand

    This will give you a list of the Item Ledger Entries for the current item:

    List of Item Ledger Entries for the current item

    Figure 2 – List of Item Ledger Entries for the current item

    To see all of the Item Ledger Entries in the system remove the Item No. filter:

    Remove the Item No. filter to see all the items

    Figure 3 – Remove the Item No. filter to see all the items

    Then set filters to get the information that you are looking for. In this example, I have set the Entry Type to “Output” to create a list of all of the Production Output:

    Set the filters to get the information of interest

    Figure 4 – Set the filters to get the information of interest

    You can then export this list to Excel.

    I hope that this was helpful.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.


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    Regenerative versus Net Change MRP Planning in Microsoft Dynamics NAV

    Dynamics NAV gives us the option to run Regenerative or Net Change MRP Planning (NAV Planning Worksheet):

    Select Regenerative or Net Change from the NAV Planning Worksheet

    Figure 1 – Select the option to run Regenerative or Net Change MRP from the NAV Planning Worksheet

    The question is: Which one should you use?

    From the APICS Dictionary:

    Regenerative MRP: An MRP processing approach where the master production schedule is totally re-exploded down through all bills of material, to maintain valid priorities. New requirements and planned orders are completely recalculated or “regenerated” at that time. Ant: net change MRP.

    Net Change MRP: An approach in which the material requirements plan is continually retained in the computer. Whenever a change is needed in requirements, open order inventory status, or bill of material, a partial explosion and netting is made for only those parts affected by the change. Ant: regeneration MRP.

    Some history:

    MRP has been around now for nearly fifty years. In the early days, MRP was run on mainframe computers with little memory or disk space. At my first job where we used MRP, it took nearly forty hours to calculate a Regenerative plan.

    There was then an effort to reduce the Regeneration time. The result was Net Change MRP. When Net Change is run, MRP will only re-plan those items that have changed and would affect the plan.

    Changes that would qualify for a Net Change Run are:

    • Quantity on hand change due to a cycle count
    • Bill of Material change
    • New Sales Orders
    • Routing change
    • Etc.

    When the system recognizes a change of this nature, it stores the item number and other information in the Dynamics NAV “Planning Assignment Table”:

    Changed items are stored in the Planning Assignment Table

    Figure 2 – Changed items are stored in the Planning Assignment Table

    Then, if you calculate a Net Change Plan, the system looks to this table to see what needs to be re-planned.

    What’s my advice? It depends. If you are Calculating Regenerative Plans and it taking a long time (more than an hour, perhaps) and it is interfering with business, try the Net Change Calculation to see if there is an improvement. If you are Calculating Regenerative Plans as a batch at night and it is not interfering with business, then stay with Regenerative.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.


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    Using Microsoft Excel Pivot Tables to Verify Posting Group Setup and Analysis in Microsoft Dynamics NAV

    In the early stages of a Dynamics NAV implementation, it is essential to verify your Posting Group Setup through testing. I have come to rely on Excel Pivot Tables for this analysis.

    I will use a Dynamics NAV Finished Production Order to illustrate this. What I want to find out is: Did postings go to the correct General Ledger Accounts?

    View of the Dynamics NAV Finished Production Order

    Figure 1 – View of the Dynamics NAV Finished Production Order

    I find the Item Ledger Entries associated to this Finished Production Order:

    View the Item Ledger Entries associated to this Finished Production Order

    Figure 2 – View the Item Ledger Entries associated to this Finished Production Order

    I then use the Dynamics NAV Navigation tool to find all of the General Ledger Entries associated with this Production Order.  To make sure I have all of the entries, I always remove the date filter and select “Find”.  The reason for this is that the transactions for a Production Order may have taken place over a period of many days:

    Use the Dynamics NAV Navigation tool to find the General Ledger Entries associated with this Production Order

    Figure 3 – Use the Dynamics NAV Navigation tool to find the General Ledger Entries associated with this Production Order.  Be sure to remove the date filter to find all the entries.

    Then I “Show” the General Ledger Entries:

    “Show” the General Ledger Entries

    Figure 4 – “Show” the General Ledger Entries

    This gives me the list of General Ledger Entries associated with this Production Order, which I copy to Excel:

    Copy the list of General Ledger Entries associated with this Production Order to Excel

    Figure 5 – Copy the list of General Ledger Entries associated with this Production Order to Excel

    In Excel, I highlight all of the Columns and Rows that I want to convert to a Pivot Table:

    In Excel, highlight the Columns and Rows to convert

    Figure 6 – In Excel, highlight the Columns and Rows to convert to a pivot table

    I then select “Insert/Pivot Table” which brings up this Options Dialog Window:

    Select “Insert/Pivot Table” which opens the Pivot Table Options Dialog Window

    Figure 7 – Select “Insert/Pivot Table” which opens the Pivot Table Options Dialog Window

    I select “OK,” which brings me to this window, where I drag down G/L Account No. and G/L Account Name into the “Row Labels,” and I drag down Amount into the “Sum of the Values”:

    Populate the fields to report

    Figure 8 –Populate the fields to report: G/L Account No. and G/L Account Name into the “Row Labels,” and Amount into the “Sum of the Values”

    This then populates the Pivot Table with a summary of the General Ledger Entries for this Finished Production Order:

    The Pivot Table is populated with a summary of the General Ledger Entries for this Finished Production Order

    Figure 9 – The Pivot Table is populated with a summary of the General Ledger Entries for this Finished Production Order

    From this analysis, it is clear that the Posting Setups are correct.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Using Alternate Production BOM Versions for Production Orders in Microsoft Dynamics NAV

    The scenario:

    Your company produces bicycles and uses Dynamics NAV Production Orders.  The Production Orders feature automatically uses the “Current Version” of the Production BOM, but in this instance we want to use an “Alternate Version” of the Production BOM.

    First, we set up the Versions of the Production BOM.

    When we open up the Production BOM in NAV 2013, we see what I call the “Header Version”; however, it could be called the “Version-less Version”.  We can see that the Active Version is the Current Version.  When a Production Order is created, it will default to the Active Version.

    Production BOM in NAV 2013

    Figure 1 – Production BOM in NAV 2013

    If we select Versions from the BOM card, the system will display a list of the versions of the Production BOM’s we have entered.  In this case, there are two versions.  Note the starting date for the alternate Version; it has been set to 12/1/2099 with the idea that it is so far into the future that it will never be inadvertently used.

    Viewing the Production BOM Version List

     

    Figure 2 – Viewing the Production BOM Version List

    We can see the differences in the Production BOM Lines using the Dynamics NAV “Matrix per Version”. Note that there are no Mudguards in the Alternate Version.

    Using the Production BOM Matrix

    Figure 3 – Comparing the difference between Production BOMs using the Production BOM Matrix per Version

    Next, we create the NAV Production Order in the normal way.  We can see that the system automatically used the Production BOM 100 and the Version set to Current.

    Creating a NAV Production Order

    Figure 4 – Creating a NAV Production Order

    To use the Alternate Version, we select “Production BOM Version Code” and then set the Version to Alternate.

    Select Production BOM Version Code and set the Version to Alternate

    Figure 5 – Select Production BOM Version Code and set the Version to Alternate

    To complete the process of using the Alternate Production BOM Version, we need to “Refresh” the Production Order again.  The trick to getting the system to use the Alternate Version and to not default to the Active Version is to “un-check” the Lines Option.

    Refresh the Production Order again un-check the Lines Option

    Figure 6 – To use the Alternate Production BOM Version, Refresh the Production Order again un-check the Lines Option

    We can now see that the system used the Alternate Version of the Production BOM.  Note here that there are no mudguards in the Production Order Component List.

    Final Production BOM is shown

    Figure 7 – The final Production BOM is shown

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Using a Frozen BOM to Roll up Standard Cost in Microsoft Dynamics NAV

    When you are rolling up Standard Costs at the beginning or end of a Fiscal Period, it is often desirable to keep a copy of the “Frozen BOM” for reference purposes. This will help answer the question, “What was the composition of the BOM when the Standard Costs were rolled up?”

    To do this, create a Production BOM Version for each BOM with the version number—something like “FY2013” with a starting date far into the future, like 12/31/2113.  In this way, the BOM will never be inadvertently used for anything but the cost rollup.

    NOTE: To create these BOM Versions in bulk for all of your Production BOMs, you will need to contact your Dynamics NAV partner to write a processing report.

    Create a Production BOM Version for each BOM with the version number using a starting date far into the future

    Figure 1 – Create a Production BOM Version for each BOM with the version number using a starting date far into the future, like 12/31/2113

    Now, when rolling up the Standard Cost using the Dynamics NAV Standard Cost Worksheet, use the “Calculation Date” of 12/31/2113 so that the system will use that version of the Production BOM.

    Roll up the Standard Cost with the Dynamics NAV Standard Cost Worksheet using the new Calculation Date

    Figure 2 – Roll up the Standard Cost with the Dynamics NAV Standard Cost Worksheet using the new Calculation Date

    The result of this is that you have used the Production BOM Version FY 2013 for the rollup, and that Version will be saved for future reference.

    For more information on Standard Cost rollups for another Dynamics Cost topic, please contact ArcherPoint.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Phasing in ECN for Bill of Material Changes in Microsoft Dynamics NAV

    As with most if not all manufacturing companies, product engineers will make changes to the product Bills of Material (BOM).

    One possible reason for an Engineering Change Notice (ECN) change is to use up the existing inventory of component parts before switching to the new component part. Another possibility would be the introduction of new packaging at the beginning of a new model year.

    In Dynamics NAV we have two possible ways to handle this:

    • Using Starting and Ending dates in the BOM line itself
    • Using Starting dates in BOM Versions

    If I look at a Production BOM in Dynamics NAV 2013, I can see that there are columns for Ending Date and Starting Date:

    Production BOM

    Figure 1 – Production BOM showing Starting and Ending Dates

    Selecting and Ending Date of 12/31/2014 for Item 1400 and a Starting Date of 1/1/2015 means that when MRP is planning, it will use item 1400 up to 12/31 and will begin using Item 1450 on 1/1.  It also means that if you create Production Orders on or before 12/31, the system will use Item 1400 and Item 1450 after that.

    Production BOM with Starting and Ending Dates populated

    Figure 2 – Production BOM with Starting and Ending Dates populated

    Another way to accomplish this ECN Phase In is to use Dynamics NAV Production BOM Versions.

    I have created two Production BOM Versions.

    In Version 1, I have set the Starting Date to 1/1/14:

    Production BOM, Version 1

    Figure 3 – Production BOM, Version 1

    In Version 2, I have set the Starting Date to 1/1/15:

    Production BOM, Version 2

    Figure 4 – Production BOM, Version 2 with a later Starting Date

    What this means is that when MRP is planning, it will use item 1400 up to 12/31/14 and will begin using Item 1450 on 1/1/15. It also means that if you create Production Orders on or before 12/31, the system will use Item 1400 and Item 1450 after that.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Rolling Up Standard Costs in Microsoft Dynamics NAV with the Standard Cost Worksheet

    There are times when you may want to establish or reestablish Standard Cost for Items:

    • For all new items
    • When you find a significant mistake in the purchased item cost, the Production BOM, and/or the Routing and want to make a correction
    • When there has been a significant change in the cost of raw materials
    • When there is a significant change in the Production BOM
    • When there are significant changes in the Production Process
    • Fiscal Year End Rollup and Revaluation

    In Dynamics NAV, we have two ways to roll up Standard Costs.

    One way is from the Item Card itself:

    Rolling up Standard Costs from the Item Card

    Figure 1 – Rolling up Standard Costs from the Item Card

    When we select “Calc. Standard Cost”, we get the options “Top Level” or “All Levels”:

    Calc. Standard Cost options – Top Level and All Levels

    Figure 2 – Calc. Standard Cost options – Top Level and All Levels

    The other way is to use the Standard Cost worksheet.  We can see that when we rolled up the Standard Cost for Item 1000, the system also included the lower level subassemblies for the Bicycle:

    Using the Standard Cost Worksheet

    Figure 3 – Using the Standard Cost Worksheet

    When I choose “Implement the Cost Changes”, the system automatically creates a Revaluation Journal for me. This Revaluation Journal inserts the necessary Value Entries to bring the Inventory Sub-Ledger into balance with the General Ledger:

    Choosing Implement Cost Changes will automatically create a Revaluation Journal

    Figure 4 – Choosing Implement Cost Changes will automatically create a Revaluation Journal

    The reason why I always recommend using the Standard Cost Worksheet for Standard Cost Rollups as opposed to doing the Rollup from the Item Card is that the Revaluation Journal is not automatically created from the Item Card. This means that the user would have to remember to manually create the Revaluation Journal (which, in my experience, is not likely).

    I do have clients whose common practice was to roll up the Standard Costs from the Item Card; however, most of the time the Inventory Sub Ledger was not in balance with the General Ledger. The good news is that, while it takes some thinking and work, we can get the Inventory Sub Ledger back into balance with the General Ledger.

    If you would like more information on this subject or another Dynamics NAV subject, pleasecontact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Quick Reporting in Dynamics NAV Using Microsoft Excel Pivot Tables

    Yesterday a client called and asked if there was a report in Dynamics NAV that listed inventory on hand and in which warehouse bins the inventory was located.

    I did not find a report for this, so I thought that if I could get to the Bin Contents Table, I could export the data to Excel and create a Pivot Table to present the information.

    Using Dynamics NAV 2013, I went to an item card.  From there, I selected “Bin Contents.”

    Select Bin Contents from the Item Card

    Figure 1 – To show inventory on hand and the associated bins, start by selecting “Bin Contents” from the Item Card

    This gave me only the Bin Contents for the current item, so I removed the item filter.

    Remove the item filter

    Figure 2 – Remove the item filter

    This then gave me the entire Bin Contents list for all items.

    The entire Bin Contents list for all items is displayed

    Figure 3 – The entire Bin Contents list for all items is displayed

    I then filtered out all of the zero quantities, which gave me the all of the Bin Contents containing inventory.

    Remove the zero quantities to list all the Bin Contents containing inventory

    Figure 4 – Remove the zero quantities to list all the Bin Contents containing inventory

    I then copied and pasted the data to Excel.

    Copy and Paste the data into Microsoft Excel

    Figure 5 – Copy and Paste the data into Microsoft Excel

    And from there, I created a Pivot Table to present the report.

    Create a pivot table to display the report

    Figure 6 – Create a pivot table to display the report

    You can see that with a little knowledge of Dynamics NAV and some skills in Microsoft Excel, you can write reports from the Dynamics NAV data. This report took less than 5 minutes to generate. If this report became widely used, then you would want to write it using other report writing tools such as Jet Reports.

    If you would like more information on this subject or another Dynamics NAV subject, pleasecontact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Using Microsoft Dynamics NAV Work Center Units of Measure (other than Time Units)

    It is quite common in processing industries, like chemical production, that the cost of Labor is not the primary cost of production. In chemical processing, the cost of energy or depreciation may be the largest cost component.

    While Centers and Routings in Dynamics NAV are typically thought of in terms of Direct Cost (Labor) and Overhead, we can set up Work Centers and Routings to accommodate other cost components.

    Using Dynamics NAV 2013, I set up a Work Center named ELECTRICITY. I set the Unit of measure to KWH, the Direct Unit Cost to .0485 per KWH, and the General Product Posting Group to ELECTRIC.

    Work Center ELECTRICITY setup in Microsoft Dynamics NAV

    Figure 1 – Work Center ELECTRICITY setup in Microsoft Dynamics NAV

    The Direct Cost Applied in the General Posting Setup is set to ELECTRIC TO INVEN.

    Set the Direct Cost Applied in the General Posting Setup to ELECTRIC TO INVEN.

    Figure 2 – Set the Direct Cost Applied in the General Posting Setup to ELECTRIC TO INVEN.

    I created an Item CHEMICAL and set up a Routing for it. Notice that the Work Center is ELECTRIC and that the Unit of Measure for the Run time is KWH.

    Item CHEMICAL with Routing; Work Center is set to ELECTRIC

    Figure 3 – Item CHEMICAL with Routing; Work Center is set to ELECTRIC

    I created a Released Production for the CHEMICAL Item, and, using the Dynamics NAV Production Journal, I recorded the use of 10,000 KWH of electricity.

    Released Production Journal for the CHEMICAL Item

    Figure 4 – Released Production Journal for the CHEMICAL Item

    These are the General Ledger entries as a result of posting the Production Journal. We can see that we got a Debit to WIP for 490.00 and a Credit to Electricity to Inventory for 490.00

    General Ledger entries as a result of posting the Production Journal

    Figure 5 – General Ledger entries as a result of posting the Production Journal

    You can see that, with a bit of creative thinking, we can set up Dynamics NAV in a way to accommodate most industries and costing scenarios.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Handling the Production BOM When ECN Effectivity is Used to Exhaustion in Microsoft Dynamics NAV

    There are times when an ECN effectivity says to use up existing parts before using the new parts (Use to Exhaustion). In Dynamics NAV we have the option to phase in using “starting dates” and “ending dates” in Production BOM’s, but that is based on an estimated usage rate that may not be accurate.

    There is a trick that will aid in planning for the new parts and using up the old parts. This trick may not be useful in a large company with rigid ISO procedures, but will work great in smaller companies.

    To Illustrate I have set up Item A and Item B. At this point they are both coded at “Purchased”. The ECN says to use up the stock of Item A before starting to purchase Item B.

    Two item cards, Item A and Item B

    Figure 1 – Two item cards, Item A and Item B

    The figure below shows the Production BOM for Item 1000 call for Item A.

    Production BOM for Item 1000 call for Item A

    Figure 2 – Production BOM for Item 1000 call for Item A

    I set up a Production BOM for Item A that calls for Item B.

    Production BOM for Item A that calls for Item B

    Figure 3 – Production BOM for Item A that calls for Item B

    I then changed the “Replenishment System” for Item A to “Prod. Order”.

    Change the Replenishment System for Item A to Prod. Order

    Figure 4 – Change the Replenishment System for Item A to Prod. Order

    When I run MRP (Calculate Regenerative Plan), I get Action Messages to produce A and buy B. The planner will ignore the Action Messages to produce A, but will accept the Action Messages to buy B.

    Run Calculate Regenerative Plan on the Planning Worksheet

    Figure 5 – Run Calculate Regenerative Plan on the Planning Worksheet

    When the entire inventory for Item A is used up, the planner will change the Production BOM for Item 1000 to use Item B instead of A.

    The planner changes the Production BOM for Item 1000 to use Item B instead of A

    Figure 6 – The planner changes the Production BOM for Item 1000 to use Item B instead of A

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Exact Cost Reversing in Microsoft Dynamics NAV 2013

    There are a couple of very important setups in Dynamics NAV that shouldn’t be ignored during a new implementation or, for that matter, in an existing implementation. 

    The scenarios are quite common:  Sales and Purchase Returns.  The question is that, when a Sales Return is put back into inventory, how should it be valued? And, conversely, when a Purchase Order is returned from inventory, how it should be valued? 

    Looking at the Sales and Receivables Setup window below, we see that there is a check box for “Exact Cost Reversing Mandatory”.

    From the Dynamics NAV 2013 Help Screen: This function is used when the company wants to apply an exact cost reversing policy in connection with sales returns. This means that the sales return is valued at exactly the same cost as the original sale when being put back on inventory. If an additional cost is later added to the original sale, the program updates the value of the sales return respectively.

    While this might seems straightforward, some thought should be given before applying Exact Cost Reversing. For instance, if the return was from a shipment made some time ago and the current value of the item is much smaller, it may be better to bring the item in at the new, lower cost.

    Dynamics NAV 2013 Sales and Receivables Setup window

    Figure 1 - Dynamics NAV 2013 Sales and Receivables Setup window

    Looking at the Purchases and Payables Setup window, we see another check box for Exact Cost Reversing Mandatory. 

    Again, while this seems to be straightforward, some thought should be given before continuing. For instance, if your vendor is only giving you a partial credit, then you would, in effect, be taking a loss on the return and that should be accounted for.

    From the Dynamics NAV 2013 Help Screen:  This function is used when the company wants to apply an exact cost reversing policy in connection with purchase returns. This means that the purchase return is valued at exactly the same cost as the original purchase when being drawn from inventory. If an additional cost is later added to the original purchase, the program updates the value of the purchase return respectively.

    Dynamics NAV Purchases and Payables Setup window

    Figure 2 - Dynamics NAV Purchases and Payables Setup window

    My recommendation is to turn on Exact Cost Reversing Mandatory for both Sales and Purchase Returns.  Then, if there is an extraordinary situation where it should not apply, turn it off for the single transaction and then turn it back on.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Dynamics NAV Posts Additional Output When the Production Order is Changed to Finished

    I frequently get the question, “Why does Dynamics NAV post additional output when I change a Production Order status to Finished?"

    The scenario:

    You create a Released Production Order for Quantity = 10. During the course of production, you record the output of 5. When you change the Production Order to Finished, NAV automatically records an additional output of 5.

    First we need to understand that Dynamics NAV records production output when a quantity is recorded on the last routing step of a routing. How does it know what the last step is? It is the step without a Next Operation Number.

    Dynamics NAV records production output when a quantity is recorded on the last routing step of a routing

    Figure 1 – Dynamics NAV records production output when a quantity is recorded on the last routing step of a routing

    Then we need to look at the Work Center or Machine Center used in that last routing step.

    Set the Flushing Method of a Work or Machine Center to Backward to bring the finished quantity up to the original quantity of the production order

    Figure 2 – When the Flushing Method of a Work or Machine Center is set to Backward, Dynamics NAV will bring the finished quantity up to the original quantity of the production order

    Note the three possible settings for Flushing Method.

    Dynamics NAV will post additional output to bring the finished quantity up to the original quantity of the production order if it has not already been recorded if the Flushing Method on the Work Center or Machine Center is set to Backward.

    We at ArcherPoint have written a small customization to reduce the original quantity to the finished quantity so that the additional output is not automatically recorded.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Microsoft Dynamics NAV 2013 Sales Order and Assembly Order Quantity Change

    While working with my associate, Barbara Plagens, yesterday, we came across a situation using Dynamics NAV 2013 Assembly Orders that, at first, we didn’t know how to handle.

    The scenario:

    You have set up a Dynamics NAV Item with the Replenishment System set to “Assembly Order” and the Assembly Policy set to “Assemble to Order”. For some reason, you have some of that item already in stock (perhaps the in-stock quantity came from a sales return). A new sales order comes in for the same item, and you want to use up the stock quantity of the item before assembling new ones. If you don’t do anything, the system will automatically create an Assembly Order for the total quantity on the Sales Order Line and ignore the quantity in stock that we would like to ship.

    Item Card Setup in NAV 2013

    Figure 1 - Item Card Setup in NAV 2013

    Suppose we have three items on hand that we want to use on the next Sales Order.

    Quantity on Hand shows three items in stock

    Figure 2 – Quantity on Hand shows three items in stock

    When we create a Sales Order for Quantity = 5 for that item, the system automatically creates an Assembly Order for Quantity = 5.

    Setting the Sales Order Quantity automatically creates the same number in Assembly Orders Quantity

    Figure 3 – Setting the Sales Order Quantity automatically creates the same number in Assembly Orders Quantity

    In order to use up the three units in stock, we change the “Quantity to Assemble to Order” on the Sales Order line to ‘2’. The system then automatically changes the Quantity to Assemble on the Assembly Order to 2.

    Setting the Sales Order Quantity automatically creates the same number in Assembly Orders Quantity

    Figure 4 – Changing the Quantity to Assemble to Order to 2 automatically changes the Quantity in the Assembly Orders view to 2

    After the shipment is posted, we can see in the Item Ledger Entries that the Assembly Order was completed for Quantity = 2 and that the Sales Shipment was recorded in two lines: One line for Quantity = 2 (the assembled items) and the other for Quantity = 3 (the items already in stock).

    Item Ledger Entry

    Figure 5 – Item Ledger Entry showing that the Sales Shipment of five items consists of two items that were assembled and three items taken from current stock

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Single Level and Rolled Up Cost Shares in Microsoft Dynamics NAV

    If you are a manufacturing company using the Dynamics NAV Standard Cost Method, it is important that you understand the concept of Single Level and Rolled Up cost Shares.

    When you Roll Up Standard Costs in Dynamics NAV, the system not only populates the Standard Cost Field for the manufactured items, but also populates the following fields:

    • Single Level Material
    • Single Level Capacity
    • Single Level Capacity Overhead
    • Single Level Subcontracting
    • Single Level Manufacturing Overhead
    • Rolled Up Material
    • Rolled Up Capacity
    • Rolled Up Capacity Overhead
    • Rolled Up Subcontracting
    • Rolled Up Manufacturing Overhead

    If we look at an Item Card from Dynamics 2013 we see that the Standard Cost for this item is 352.999. 

    Standard Cost for an item from the Item Card

    Figure 1 – Standard Cost for an item from the Item Card

    If we dig a bit deeper, we will see that the Standard Cost is broken down to Rolled Up Material Cost and Rolled Up Capacity Cost.

    Standard Cost broken down to Rolled Up Material Cost and Rolled Up Capacity Cost

    Figure 2 – Standard Cost broken down to Rolled Up Material Cost and Rolled Up Capacity Cost

    And the Standard Cost is also broken down to its Single Level Material Cost and the Single Level Capacity Cost.

    Standard Cost broken down to Single Level Material Cost and the Single Level Capacity Cost

    Figure 3 – Standard Cost broken down to Single Level Material Cost and the Single Level Capacity Cost

    What is the difference then between Rolled Up and Single Level Cost Shares?

    For a produced item, if you want to know the total content of Material, Capacity, Capacity Overhead, Subcontracting, or Manufacturing Overhead, you would look at the Rolled Up Cost Shares.  Looking at the example below, we can see that the Rolled Up Cost Shares are the summed up costs from all of the BOM layers below.

    Rolled Up Cost Shares (Taken from Dynamics NAV Manufacturing Costing Training Manual)

    Figure 4 – Rolled Up Cost Shares (Taken from Dynamics NAV Manufacturing Costing Training Manual)

    If, however, you want to know the ‘Value Added’ at a single BOM layer for a produced item, you would look at the Single Level Cost Shares. Notice in the example below that the Single Level Material contains not only the Material added at that layer, but all of the cost from the layers below.

    Single Level Cost Shares (Taken from Dynamics NAV Manufacturing Costing Training Manual)

    Figure 5 – Single Level Cost Shares (Taken from Dynamics NAV Manufacturing Costing Training Manual)

    When a Dynamics NAV Released Production Order is changed to a Finished Production Order, the Adjust Cost-Item Entries Program uses the Single Level Cost Shares to calculate variances for that Production Order. 

    Below are examples of the Single Cost Level and Roll Up Reports

    Dynamics NAV Single Level Cost Shares Report

    Figure 6 – Dynamics NAV Single Level Cost Shares Report

    Dynamics NAV Rolled Up Cost Shares Report

    Figure 7 – Dynamics NAV Rolled Up Cost Shares Report

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    Item Inventory Value Changes in Microsoft Dynamics NAV

    There are times where it seems like an item’s inventory value changes without an explanation. I have set up an example to see if I can explain this.

    I created the Item INV VALUE with the Costing Method FIFO.

    Create a new item with the Costing Method FIFO

    Figure 1 – Create a new item with the Costing Method FIFO

    I then created a Purchase Order for quantity 10 and a Direct Unit Cost of 10.00.

    Create a Purchase Order for quantity of 10 and Direct Unit Cost of 10.00

    Figure 2 – Create a Purchase Order for quantity of 10 and Direct Unit Cost of 10.00

    I posted the receipt of the Purchase Order and then ran the inventory valuation report with an as-of date of 9/10/2014.  As expected, I see that the inventory value is 100.00.

    Inventory Valuation report
    Figure 3 – Inventory Valuation report with a date of 9/10/2014 with a unit cost of 10.00 and quantity of 10 yields an inventory value of 100.00

    I then invoiced the receipt with a posting date of 9/15/2014 and a direct unit cost of 15.

    Change the posting date

    Figure 4 – Change the posting date to 9/15/2014 and a direct unit cost of 15.00 shows a total of 150.00, as expected

    I then re-ran the Inventory Valuation Report with an as-of date of 9/10/2014, and the inventory valuation remained the same at 100.00.

    Inventory Valuation Report with early as-of date

    Figure 5 –Inventory Valuation Report with an as-of date of 9/10/2014 shows an Inventory Value of 100.00

    The Unit Cost on the Item now shows 15.00.

    Unit Cost of Invoice

    Figure 6 –Unit Cost for this item shows 15.00

    The Item Ledger Entry for this receipt shows a Cost Amount (Actual) of 150.00.

    View of Item Ledger Entry

    Figure 7 – Item Ledger Entry shows an Acutal Cost Amount of 150.00 for this receipt

    If we drill down on the Cost Amount (Actual), we can examine the Value Entries for this receipt.  The original receipt was made with a Posting Date of 9/10/2014.  The Invoice has a Posting Date of 9/15/2014.  When the Inventory Valuation Report runs, it finds the Item’s Value Entries up to and including the as-of date.

    Value Entries for both 9/10/2014 and 9/15/2014

    Figure 8 – Value Entries for both 9/10/2014 and 9/15/2014

    While this may seem to be a simple example, it goes a long way toward understanding how the Dynamics NAV Inventory Valuation Report calculates the Inventory Value.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.

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    Quick Start Guide for Setting up Microsoft Dynamics NAV Subcontracting

    One of my Blog readers asked me to do a Blog on the Dynamics NAV Subcontracting Process.  There is good documentation available for this process in the Dynamics NAV Manufacturing Training Manual that you can get through Partner Source or Customer Source, so I will write an abbreviated version here.

    The scenario:

    Your company sends out parts to a subcontractor to perform an operation that your company cannot do in house. You will pay the Subcontract Vendor for its services through the normal Accounts Payable Process.

    The first step is to setup a Dynamics NAV Work Center for the Subcontract Vendor. When you populate the Subcontractor No. with a Vendor Number, the system knows that this Work Center is not a typical inside process, but will be handled outside of the company. Also notice that I set Unit Cost Calculation to “Units” and selected Specific Unit Cost. This means that I will need to put the expected cost for this operation in the Routing Line itself.

    Subcontract Vendor setup

    Figure 1 – Subcontract Vendor setup

    I then set up a 24/7 Shop Calendar to use for this Work Center.

    Work Center Shop Calendar is set to 24/7

    Figure 2 – Work Center Shop Calendar is set to 24/7

    Shop Calendar Working Days for 24/7

    Figure 3 – Shop Calendar Working Days for 24/7

    Next, set up a Routing that uses the Subcontract Work Center. Notice that I entered the Unit Cost per for what I expect to pay the Subcontract Vendor and the Lead Time entered as Move Time.

    Sub Contract Item set up

    Figure 4 – Sub Contract Item set up

    The next step is to associate the Routing to an Item.

    Associate the Routing to an Item

    Figure 5 – Associate the Routing to an Item

    Now to get the process started, you create a Released Production Order for the item. Looking at the Routing Lines for this Production Order, we see that the Routing is the one we created for the Sub Contract Operation.

    Released Production Order Routing

    Figure 6 – Released Production Order Routing

    The next step is to go to the Subcontracting Worksheet and Calculate Subcontracts.

    Choose Calculate Subcontracts from the Subcontracting Worksheet

    Figure 7 – Choose Calculate Subcontracts from the Subcontracting Worksheet

    The results of Calculating Subcontracts are that the system will populate the Work Sheet with the Production Orders that need a Subcontract Purchase Order Created.

    The Subcontracting Worksheet is populated

    Figure 8 – The Subcontracting Worksheet is populated

    You then “Carry out the Action Messages” to create a Purchase Order for the Subcontract Operation.

    Select Carry out the Action Messages to create a Purchase Order for the Subcontract Operation

    Figure 9 – Select Carry out the Action Messages to create a Purchase Order for the Subcontract Operation

    When you select Receive and Invoice for this Purchase Order, it will put the finished item into inventory and put the cost of the operation into the General Ledger WIP Account.

    Select Receive and Invoice for this Purchase Order

    Figure 10 – Select Receive and Invoice for this Purchase Order

    Finished item is put into inventory and the cost of the operation is put into the General Ledger WIP Account

    Figure 11 – Finished item is put into inventory and the cost of the operation is put into the General Ledger WIP Account

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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    The Rounding Precision Field on the Microsoft Dynamics NAV Item Card

    The scenario:

    When you look at the on-hand inventory for an item, you see fractional quantities in stock. Your natural instinct would be to look at the Rounding Precision Field on the Item Card and change it to 1. You then would expect that from that point on you would not see any fractional on hands created.

    In this case, your natural instinct is not correct (and mine for a long period of time).

    Item Card showing the Rounding Precision Field

    Figure 1 – Item Card showing the Rounding Precision Field

    Some of the confusion may be created in Dynamics NAV itself.  If I look at the Dynamics NAV Help for the Rounding Precision Field in NAV Versions 2009 and before, I see this:

    In this field, you can specify how quantities of this item must be rounded in the various calculations that involve the item. If, for example, the item is available only in indivisible units, enter 1 in this field.

    But when I look at the Help Screen in Dynamics 2013, I see this:

    Defines how calculated consumption quantities are rounded when entered on consumption journal lines. Quantities less than 0.5 will be rounded down. Quantities equal to or greater than 0.5 will be rounded up.

    The key word is consumption.

    This field is only used when calculating Production Order Consumption. It has always been this way, even in the earlier versions of NAV. The Help screen in the earlier versions is incorrect.

    So, if you are not using Dynamics NAV Manufacturing, this field has no effect.

    If you would like more information on this subject or another Dynamics NAV subject, please contact ArcherPoint.

    Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.


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