At any point in time Smart Costing can detect exactly what has changed in the Inventory – eliminating the need for complete recalculations - with Smart Costing, changes are simply just being applied to the costing profile, their consequences are calculated and further applied in terms of adjustments. In fact all the known ingredients of the traditional costing process are included in this processing … it just happens real-time.
This incremental costing processing is handled in a very efficient background process on the server, thus the on-line users are not affected – the only impact is that the same on-line users have access to real-time calculated cost prices.
The process of closing the inventory is now just a matter of typing in a closing date in the system. So there are no need to run any monthly closing batch function.
The process of adjusting inventory on-hand levels or transactions can be rather cumbersome for standard dynamics users. First of all it requires the inventory to be closed, which most often only happens on a monthly basis. Furthermore adjustment of on-hand levels cannot be performed directly from the on-hand form - with Smart Costing the ability to adjust anything at any time is available:
Besides from receipt transactions and on-hand levels, issue transactions can be adjusted. Often items are sold before their real cost price is known due to delayed purchase invoices, and often such issue transactions end up with an incorrect cost price estimate which will have a direct impact on ledger when closing the period. With Smart Costing such issue transactions can simply be adjusted so that any period can be closed with a result which is not damaged by incorrect cost price estimates.
The standard requirement for having the inventory closed before doing adjustments is history with Smart Costing installed. Everything is fully recalculated at any point in time, thus adjusting inventory can be done whenever needed: if inventory value needs to change as of now … simply go and adjust now.
Any CFO should be concerned about whether the inventory valuation and posted amounts are correct when the time for period closing is near. There are several reasons for that: Items are often sold before cost prices are known which means that cost prices are estimates, errors in data entry during the period, errors in prices, currencies, etc. It’s a simple fact that it’s impossible to manually check cost prices on all issue transactions within a period.
A new simplified periodic average cost price model is introduced. Average cost prices are always calculated as clean weighted average prices for individual periods.