Hi everyone!
We are looking at our costing method again. Today I was asked about changing from Last costing to lot avg costing. We looked in company maintenance, but lot avg is not in the drop down list.
Is it a bad idea to go from last to lot avg costing? Did you do it? How did it go?
Is there a better way to cost materials so that they retain the value of their lot instead of changing value each time someone receives something? I am not in finance, so you might have to spoon feed this to me.
I just asked tech support why we can’t turn on Lot Average Costing. I don’t see it as an option. Is there a module purchase required to use Lot Average? Will post back when I hear from support.
I’m not sure of licensing/modules, but I see it in the Part Maintenance drop down. I don’t see it in Company Configuration either. It looks like the part must be lot tracked in order to set this as a costing method, so maybe that’s why you can’t set it to the company default.
That might be it! If I start a new part I can select Lot Average as the costing method. Now I can do a little testing with DMT to see if this is doable. I think I have to pull all parts out of stock, change the part costing method, then readd them all to inventory.
This sounds like a lot. I hope that DMT can do it!
Support confirmed we have to make the change at the part level for each part. They didn’t know why the option was greyed out from the Company Configuration screen. We are assuming that once we fix all the part’s costing methods, then we can change the company default costing method.
What was your process in DMT for changing costing methods?
Does pulling stock from inventory, then readding it after changing the costing method do anything to our books that we need to note?
I pulled the parts out of inventory with the DMT Management-Inventory-Adjustments-Quantity Adjustment template (during a time when no inventory was moving). Then used DMT Management-Inventory-Part-Part template to update the cost method (included the field “UpdatePartPlant” so the site cost methods were updated too). Then adjusted everything back in with the same qty adjustment template.
So the inventory was adjusted out at our standard cost, and adjusted back in at our average cost. Any discrepancy in the two would hit the books. The reason code (and associated GL control) selected during the adjustments will dictate which accounts get hit with the discrepancy.
You can also see these discrepencies/differences in costs from the part tran tracker (or table) after doing the adjustments. I just changed this part from avg to lot avg:
you cannot change the costing method with quantity on hand
Lot Average cost is almost equivalent to “lot actual cost”. We don’t actually have this concept except through proper procedures… if you only do one receipt per lot, then that lot is the actual cost for that lot… if you do multiple receipts, and the receipts have different unit values for cost, then the cost will be averaged in (using weighted average, just like average cost).
You might want to clarify whether you need Lot Average on ALL part numbers. There are probably some parts, like for MRO, where there is not a lot number from the supplier. If you set as lot tracked on those parts, you will need to figure out what to use for those. Or better yet, don’t mark those as lot tracked.
I must’ve named the BAQ something I can’t remember or I didn’t save it sorry. I’m pretty sure I pulled the Plant in using the WarehouseCode on PartBin and then Warehse table. I don’t think the revision is maintained when something gets put into inventory.
Does anyone know specifically about this setting in the Company Configuration? If we are currently set to Last, what would it take to switch this to Lot Avg? Do we just have to fix the part costing for each part actually in stock (Qty on hand), or do we have to change the costing for all parts, regardless of on hand qty?
Correct
The company setting is to define what the default is when you create a new part.
To load the part inventory back in can be done two ways
DMT
Qty adjust out parts
Upload partlot table with costs
Upload part lot qty as qty adjust
PO receipt
Create a receipt and copy and paste insert all parts, lots and costs in one step ( did this in the old days before DMT)
The lot avg is the cost that is used for job and quote estimated cost
