A Practical Guide to Calculate the Cost Difference after Month-End in Dynamics 365 Finance and Operations

Introduction: Month-end reconciliation is a key task for ensuring accuracy between your inventory and financial ledgers in Dynamics 365 Finance and Operations (D365FO). Variances can occur due to posting errors, unrecorded transactions, or system glitches. In this guide, we will walk through a step-by-step method to calculate potential cost differences after the month-end close by comparing the Inventory Value Storage Report and the Trial Balance.

Step 1: Run the Inventory Value Report Storage The first step is to generate the Inventory Value Report Storage at the transaction level for the month you’re closing. This report gives a detailed view of your inventory at the close of the period.

• Navigate to the Cost management > Inquiries and reports > Inventory value report storage.
• Ensure you select the Transaction Level for detailed insight.

• View the Report. Before downloading the report, insert the Voucher column. This step is crucial for tracking transactions later.

Step 2: Download the Report and Create a Pivot Table Once the report is downloaded, open it in Excel to analyze the data further.

• Select all the data in the report.
• Create a Pivot Table using this data.
• Add Reference to the rows section and Inventory: Amount to the values section.

This will help you aggregate the total inventory value for the selected period.

Step 3: Calculate the Total Inventory Value After generating the pivot, you will see the Total Inventory Value for the period under the "Inventory: Amount" column. This total reflects your inventory value at the transaction level for the specific month.

Step 4: Open the Trial Balance Next, open the Trial Balance for the same period.

• Go to General Ledger and select Trial Balance.
• Set the same date range as used in your Inventory Value Report.
• Look for the Cumulative Closing Balance of your inventory account(s) at the end of the period.

Step 5: Perform a Comparison Now it’s time to compare the two sets of data:

• Copy the Cumulative Closing Balance from the Trial Balance.
• Subtract the Total Inventory Value from the Inventory Value Report.

Formula:

Difference Amount = Trial Balance Closing Amount - Inventory Value Report Total Amount        

• If the result is zero, there are no discrepancies between your inventory and financial records.
• If you find a positive or negative value, there are discrepancies that need further investigation.Check My #3. Analyzing Cost Differences Between Trial Balance and Inventory Value Storage Report at Voucher Level Using Excel in Dynamics 365 Finance and Operation Article.

Conclusion: By following these steps, you can effectively verify whether your inventory and financial ledgers align after the month-end closure. If you find discrepancies, the next step is to dive deeper into the individual vouchers. In our next article, we’ll explore how to compare each voucher and identify the root cause of the discrepancies.

Stay tuned for more detailed insights on handling these variances to ensure a smooth and accurate reconciliation process.

#Dynamics365 #ERP #InventoryManagement #FinancialReconciliation #MonthEndClosure

About the Author: I'm Satyajit, a passionate ERP Functional Consultant with a focus on Dynamics 365 Finance and Operations. With experience in both Finance and Supply Chain Management modules, I thrive on solving complex problems and continuously learning to drive business success.