Experience in moving from FIFO Cost to Standard Cost

Epicor ERP 10
1

Hi,

does anybody have experience moving from FIFO Cost to Standard Cost? I am trying to scope this project. I am looking for best practices, what it will take, the risks.

Thank you,

Daniel

2

Epicor (supposedly) has a utility to move to STD-COST (not sure they really do?)

I have done this a few times:

  1. MOM’s have to be accurate (including SUB-contract costs)

  2. audit RG’s and Resource rates for labor and burden

  3. Need to adjust inventory to ZERO (without any residual fractions) in order to change cost-method

  4. evaluate COST on every-part to ensure LAST-COST is not zero
    any part not yet received will have last and avg = zero…
    but the std-cost-roll needs a cost to have accurate std-cost-roll results (ref sub-con cost comment in #1)

  5. Per #3 suggest a NEW GL account and reason code per auditability
    Run Stk-stat-report and evaluate GL Account balances for all inventory
    Create reason code and new GL account “called-inv-down”
    Transactions will credit INV acct’s and debit NEW acct
    ** EPICOR needs transactions! There are ways to auto-mate… but I relied on someone to develop the command file and execute.

  6. BAQ after inv-reduction to insure inv-qty for all parts - 0

  7. Change cost factor to STD

  8. execute std-cost-roll process

  9. AUDIT results (EPICOR can act goofy when MASS std-cost-roll occurs)
    Compare STD-cost per part to costed-BOM report…
    Manually select various parts… audit

  10. create a reason-code for “CIOST-UP” targeting a different NEW GL Account

  11. Execute process
    ** EPICOR needs transactions! There are ways to auto-mate… but I relied on someone to develop the command file and execute.

  12. AUDIT expected results!
    Run stk-status report, evaluate GL accounts, etc.
    COSTING will change!
    FIFO costs had inv-valuation at $12345.89
    Std-costing will result in a different # and account will need to know the difference!

DO ALL OF THIS IN A TEST ENVIRONMENT… prior to attacking Production.
There will “always” be some unexplainable results… maybe 1 out of 1,000 parts that drive u crazy.

SNOW happens…

1 Like
3

Joe,

Thank you for this. I will most likely have to change a lot of parts at once. Do you use any DMT to perform some of the tasks below like adjusting the inventory to 0 and changing the costing method.

Thank you,

Daniel Cardoso | IT Manager
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Direct: +1 (267) 932-2380
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daniel.cardoso@nordicice.commailto:daniel.cardoso@nordicice.com
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4

Changing costing method involves basically the following steps.

  1. zero all the quantity on hand.

  2. Change the costing method on the parts

  3. Update the cost of each part based on the costing method

  4. Adjust the quantity on hand to bring it to original levels.

All the above are done by DMT if there are a lot of parts involved.

Vinay Kamboj

5

The steps below are spot on.

I like to add a specific reason code for these types of big cost changes and this can be called out manually or be the DMT. Confirm the GL account that will be hit with accounting team so there is no “Oh By The Way” momemts.

Brad Boes
bradboes@boosterpconsulting.com
231-845-1090

4E97EE45F2E1469CBEAB62FA41607A8D.png705×1 83 Bytes

6

If you are not using standard cost and are moving to standard cost, you can roll standard cost before doing any inventory transactions or changing cost method. We are about to do this process and have successfully done it on test.

We’re using DMT. I created 3 BAQ which output a file in DMT format.

Prior to starting, run all 3 BAQs, right click and copy to respective sheets, load into DMT in sequence.

Quantity Adjustment_1.xlsx = Calculated Field AdjustQty = 0-PartBin.OnhandQty

Company Plant PartNum AdjustQuantity WareHseCode BinNum ReasonCode LotNum

Part Combined.xlsx = You have to use Part Combined to make sure your site records get updated too.
Company PartNum CostMethod PartPlant#Plant PartWhse#WarehouseCode PartRev#RevisionNum PartPlant#CostMethod

Quantity Adjustment_2.xlsx = AdjustQty = PartBin.OnhandQty

Company Plant PartNum AdjustQuantity WareHseCode BinNum ReasonCode LotNum

7

Great write-up! I do have a question that probably will get answered by testing, but in case anyone has gone through this process and wants to help shape my expectations: what happens to parts already on order and open jobs? Does any of that warrant special treatment?

Thanks!

Paul

8

I went live on FIFO on 10.0 and it was bug ridden, to the point it didn’t work - but anyway I’m over that :slight_smile:

Ultimately, my client decided to move onto average cost, which was tricky as a large amount of the stock was serialized, thus we had the added complication of adjusting everything out of stock, noting which serial numbers we in each bin location, changing the cost type and then adjusting the stock back in. This required batches of serial numbers, all ‘~’ delimited.

The easiest way I found was to write SQL proc and populate a temporary table with the ‘~’ delimited serial numbers stored in a field.