CHAPTER 6: HANDS-ON LAB: INSIGHT AND RECONCILIATION

Chapter 6: Hands-On Lab: Insight and Reconciliation

6-1

CHAPTER 6: HANDS-ON LAB: INSIGHT AND RECONCILIATION Objectives

The objectives are:

• Describe the reconciliation process. • Set up and print the inventory value report. • Print the Potential conflicts - Inventory and General ledger report. • Print the Inventory value statement with standard cost breakdown

report. • Print the Variance analysis statement report.

Introduction The objective of this Hand-on Lab (HOL) is to explore, at your own pace, how to set up and print inventory value reports. Additionally, several other inventory and reconciliation reports are reviewed in Microsoft Dynamics® AX 2012. This HOL highlights the following topics.

• Setting up and running the inventory value report. • Print and review the potential conflicts inventory and general ledger

report. • Print and review the inventory value statement with standard cost

breakdown report. • Print and review the variance analysis statement.

Lab time: 35 minutes

Note that hands-on labs for the Inventory Costing and Valuation in Microsoft Dynamics AX 2012 contain dependencies, which means that some data that you set up or create in one lab can be used in other labs. Therefore, it is recommended that you perform all six labs on a single virtual machine (VM) in a sequential order. You can download the VM with Microsoft Dynamics AX 2012 using the following link:

https://mbs.microsoft.com/partnersource/deployment/methodology/vpc/ax2012demotoolsmaterials.htm?printpage=false&sid=va2ynauztj1yuvhufnfo34in&stext=ax%202012%20virtual%20machine

Use the AX2012-A VM with the following credentials:

Account: Administrator Password: pass@word1 (mailto:pass@word1)

Microsoft Official Training Materials for Microsoft Dynamics®

Your use of this content is subject to your current services agreement

Hands-on Lab Costing and Inventory Valuation in Microsoft Dynamics® AX 2012

6-2

Prerequisites

To successfully complete this HOL, you will need to have an understanding of the basic use and how to process sales orders and production orders. Additionally, you must have a general understanding of the basic inventory accounting principles and the underlying inventory costing methods, and valuation principles.

It is also recommended that you complete the first five labs in the “Costing and Inventory Valuation Hands-On Lab.”

Reconciliation Process By the end of a fiscal period (normally a few days into the next fiscal period unless it is a fiscal year-end) the balances from subledgers are reconciled with general ledger values. This is to ensure that the subledger and the General ledger are synchronized.

When there are discrepancies between the subledger and the general ledger, it is important to identify the reason for the discrepancies, so that suitable actions to correct the issue can be taken.

Scenario: Inventory Value Report With the inventory value report framework you can perform the following tasks.

• Create a report configuration that is tailored for a specific purpose. • Save a report configuration with a unique ID so that it can be used

multiple times. • Add ranges to filter data when you run a report.

The following topics will provide an overview of the options available to create report configurations that display the inventory value in different ways.

Ken, the Controller, needs to print a report of the details of the inventory and reconcile the information to the general ledger. He wants to view the detail by site and warehouse, and the report should include the inventory values and the cost of goods sold (COGS) values.

Exercise 1: Create an Inventory Value Report Layout

Before you can print the inventory value report, you must configure the layout of the report. To create a new layout for the inventory value report, follow these steps.

1. Open Inventory and warehouse management > Setup > Costing > Inventory value reports.

2. Click New to create a new layout.




6-3

3. In the ID field type a unique identifier such as "IVR". 4. In the Name field type a description such as "Inventory Value by

Site and Warehouse." 5. In the Date interval field, select CY for the current year. 6. In the Dimension set field, select ACC for the Ledger account

dimension set. 7. Click the Columns FastTab. 8. Select the Inventory and COGS check boxes.

TIP: You can optionally select the Print cumulative account values for comparison check box, and then specify the main account to print balances for. If this option is selected, make sure that you carefully specify the main accounts to print. If you use multiple inventory accounts for example, you might need to create several versions of the report, or create a main account of the type Total that sums all of the inventory accounts.

9. Select the Summarize physical and financial values check box. 10. Select the Calculate average unit cost check box. 11. In the Inventory dimensions grid, select the View check box for

Site and Warehouse.



Hands-Microso

6-4

-on Lab Coft Dynam

Costing anmics® AX 2

12.13.

FIGURE 6.

TIP: You can existing

About H

When you rcolumns anfollowing ty

• • • •

NOTE: Thecolumns of Work in PrPhysical (q

nd Invento2012

. Click the Ro

. Verify that t

1 INVENTOR

an use the Colayout, and t

Header Co

run an inventnd these headeype.

Financial quFinancial amPhysical quaPhysical am

e financial pof the type Finarocess (WIP) aquantity poste

ory Valuat

ows FastTab.the detail leve

RY VALUE RE

opy button onthen modify it

lumns an

tory value reper columns ca

uantity mount antity posted

mount posted

ositions COGSancial (quantiand Deferred

ed and amoun

tion in

el is set to To

EPORTS FO

n the Inventort.

d Sub-Co

port, the finanan contain a s

GS and Profit aity and amoun

d COGS only nt posted).

otals in the Le

RM

ry value repo

olumns

ncial positionsset of sub-colu

and Loss onlynt). The financontain sub-c

evel field.

rts form to co

s represent heumns of the

y contain subncial positionscolumns of th

opy

eader

-s e type



Ch

ExerciseReport

You can ussample of t

FIGURE 6.

NOTE: Whreport is nopurposes.

When you athe Invento

Exercise

Now that Kit by follow

TIP: It is rebecause thidemonstrat

1.

2.

hapter 6: H

e 2: Previe

se the Previewhe report layo

2 INVENTOR

hen you previeot real and sh

are finished rory value rep

e 3: Print t

Ken has configwing these step

ecommended is report can tion, the repor

Open InvenStatus > InvIn the ID fie

Hands-On

ew a Sam

w button on thout.

RY VALUE RE

ew the reporthould not be u

reviewing the ports form.

the Invent

gured a layoups.

to print the Itake several mrt is run ad ho

ntory and waventory valueld, select the

n Lab: Insi

ple of the

he Inventory

EPORT PREV

t, a sample layused for repor

sample, clos

tory Value

ut for the inve

Inventory valminutes to runoc on the clie

arehouse manue > Inventore IVR templat

ight and R

e Inventory

y value repor

VIEW SAMPL

yout is printerting or recon

e the window

e Report

entory value r

lue report in bn. For purposent.

nagement > Rry value. te that you cre

Reconcilia

y Value

rts form to vie

LE

ed. The data innciliation

w, and then clo

report, he can

batch made ses of this

Reports >

eated earlier.

ation

6-5

ew a

n this

ose

print



Hands-Microso

6-6

-on Lab Coft Dynam


3.

FIG

4.

nd Invento2012

Optionally, Warehouse,

GURE 6.3 INV

Click OK to

ory Valuat

you can click Item group a

VENTORY VA

o run the repo

tion in

k Select, and tand so on.

ALUE REPOR

ort.

the enter crite

RT SAMPLE

eria such as SSite,



Ch

IMPORTAmatch an inestimated ca To date th

FIGURE 6.

The output report critertotals of the

For examplbalance shethe profit an

This processtructured yposting pro

TIP: Choosyou want tototals are increate pivoduplicates o

hapter 6: H

ANT: If the Tonventory closicost exists for hat matches a

4 INVENTOR

of this reportria. To use the various tran

le, the inventoeet, and the Cnd loss sectio

ss can vary fryour chart of ofiles, and acc

sing to not inco export the rencluded each t tables or usor make form

Hands-On

o date that is ing date, a dithe items. It i

an inventory c

RY VALUE RE

t can vary dephe informationnsaction types

ory accounts COGS accounton of your cha

om company accounts and

counts for aut

clude totals ineport to Micrgroup will ine advanced fo

matting in Exc

n Lab: Insi

specified in thialog box willis recommendclosing date.

EPORT SAM

pending on thn on this repos to the approp

are typically ts are typicallart of account

to company d how you havtomatic transa

n the report crosoft Office®nclude an extrformulas, the acel more diffic

ight and R

the report critl open to warnded that this r

MPLE

he layout that ort, you will wpriate general

one set of maly a different ts.

depending onve set up inveactions.

configuration® Excel. For era row for totadditional totcult.

Reconcilia

teria does notn you that an report is run w

is selected fowant to balancl ledger accou

ain accounts iset of accoun

n how you haventory posting

is useful wheexample, whetals. If you platal row can ca

ation

6-7

t

with

or the ce the unts.

in the nts in

ve gs,

en en an to ause



Hands-Microso

6-8

-on Lab Coft Dynam


ExerciseValue Re

You can creincludes infreport referbecause you

FIGURE 6.

To configursteps.

1.

2. 3. 4.

5. 6.

7. 8. 9.

10.

11.12.13.14.

nd Invento2012

e 4: Work eport

eate an invenformation by r to item numbu can view th

5 RESOURC

re an Invento

Open InvenInventory vClick New tIn the ID fieIn the NameSite and WaIn the Date In the Dimedimension sClick the CoSelect the InSelect the Vresource colto print total

. In the InvenSite and Wa

. Click the Ro

. Select the L

. Set the detai

. Click the Pr

ory Valuat

with Reso

ntory value repspecific resoubers, resource

he inventory, t

CE ID EXAMP

ory value rep

ntory and wavalue reportsto create a neweld type a unie field type a arehouse withinterval field

ension set fielset. olumns FastTnventory che

View check bolumn. You cals by resourcentory dimensarehouse. ows FastTab.

Labor and Indil level to Totreview button

tion in

ource ID's

port in Micrources. Resoures, or costingthe labor and

PLES

port that inclu

arehouse mans. w layout. ique identifierdescription s

h Resource IDd, select CY fld, select ACC

Tab. eck box. ox in the Resoan also optione ID. sions grid, sel

direct cost chtals in the Levn to view a sa

s in the In

osoft Dynamicrces in the In

g sheet nodes. d the indirect c

udes resource

nagement > S

r such as "Ressuch as "InvenDs." for the currenC for the Led

ource ID gronally select the

lect the View

heck boxes. vel field.

ample of the r

ventory

cs AX 2012 thnventory valu

This is usefucosts.

ID's, follow t

Setup > Cost

sourceID". ntory Value b

nt year. dger account

up to add a e Total check

w check box fo

report layout.

hat ue ul

these

ting >

by

k box

or



Ch

15.16.

To print theyou configu

1.

2. 3. 4. 5. 6. 7.

FIGURE 6.

hapter 6: H

. Close the re

. Close the In

e new Inventured, follow t

Open InvenStatus > InvSelect ResouType "1/1/2Type "1/31/Click OK onClick Yes onPreview thethen close th

6 INVENTOR

Hands-On

eport viewer wnventory valu

tory value repthese steps.

ntory and waventory valuurceID in the008" in the F

/2008" in the n the dialog pn the dialog p report. Use the windows.

RY

n Lab: Insi

window whenue reports fo

port by using

arehouse manue > Inventore ID field. From date fie

To date fieldprompt. prompt. the arrows to

ight and R

n you are finisorm.

g the resource

nagement > Rry value.

eld. d.

page through

Reconcilia

shed.

e ID layout th

Reports >

h the report, an

ation

6-9

hat

nd



Hands-Microso

6-10

-on Lab Coft Dynam


ExerciseValue Re

You can creincludes infvalue repor

FIGURE 6.

To configursteps.

1.

2. 3. 4.

5. 6.

7. 8. 9.

10.

11.12.13.14.15.16.

nd Invento2012

e 5: Work eport

eate an invenformation by rt refer to item

7 RESOURC

re an Invento

Open InvenInventory vClick New tIn the ID fieIn the NameSite and WaIn the Date In the Dimedimension sClick the CoSelect the InSelect the Vcolumn. Youtotals by res

. In the InvenSite and Wa

. Click the Ro

. Select the L

. Set the detai

. Click the Pr

. Close the re

. Close the In

ory Valuat

with Reso

ntory value represource grou

m groups, reso

CE GROUPS

ory value rep

ntory and wavalue reportsto create a neweld, type a une field, type aarehouse withinterval field

ension set fielset. olumns FastTnventory che

View check bou can also op

source groupsntory dimensarehouse. ows FastTab.

Labor and Indil level to Totreview buttoneport viewer wnventory valu

tion in

ource Gro

port in Microups. Resourceource groups,

EXAMPLES

port that inclu

arehouse mans. w layout.

nique identifiea description sh Resource Grd, select CY fld, select ACC

Tab. eck box. ox in the Resoptionally selecs. sions grid, sel

direct cost chtals in the Levn to view a sawindow whenue reports fo

oups in th

osoft Dynamice groups in th, or cost grou

udes resource

nagement > S

er such as "Resuch as "Inveroups." for the currenC for the Led

ource group ct the Total ch

lect the View

heck boxes. vel field.

ample of the rn you are finisorm.

he Invento

cs AX 2012 thhe Inventory ups.

ID's, follow t

Setup > Cost

esGroup". entory Value b

nt year. dger account

to add a resoheck box to p

w check box fo

report layout. shed.

ory

hat

these

ting >

by

urce print

or




6-11

TIP: This report layout can be useful if you have configured the posting profiles at the group level.

Scenario: Potential Conflicts Report The Potential conflicts - Inventory and General ledger report validates if transactions from inventory and the general ledger agree with the parameter settings in Accounts payable, Accounts receivable, Production, and Inventory. When you run the report, you will receive a list of any transactions that violate one or more rules. For each violation, a recommendation for a corrective action is printed.

Exercise 1: Print the Potential Conflicts Report

To print the Potential conflicts-Inventory and General ledger report, follow these steps.

1. Open Inventory and warehouse management > Reports > Status > Inventory value > Potential conflicts - Inventory and General ledger.

2. Select CY in the Date interval code field.

NOTE: Date interval codes are defined in the General ledger in the Date intervals form under Setup > Periods. The benefit of date interval codes is that you do not have to change dates manually before you run the report.

3. Select the total inventory account in the Main account field. The account that you select represents inventory in the General ledger and it is used in multiple validations.

TIP: You can also select a sub-account of the type Total in the Main account field.



Hands-Microso

6-12

-on Lab Coft Dynam


4.

FIGGE

5.

nd Invento2012

Select the Ecaused by trledger. This

o Item moo Accouno Accouno Product

GURE 6.8 POENERAL LED

Click OK to

ory Valuat

Exclude physiransactions ths applies to tra

odel groups ts receivable ts payable pa

tion control pa

OTENTIAL COGER REPOR

o print the rep

tion in

ical to ledgerhat are not phyansactions fro

parameters arameters arameters

ONFLICTS - IRT DIALOG

port.

r check box toysically posteom the follow

NVENTORY

o exclude coned to general

wing.

AND

nflicts



Ch

Exercise

Many diffeGeneral leReport figu

FIGURE 6.REPORT S

Other exam

•

•

•

•

•

•

hapter 6: H

e 2: Revie

rent results cadger report. T

ure shows a sa

9 POTENTIASAMPLE

mples of comm

The setting for the item Inventory anThe setting Accounts pThe postingthat does noThe postingService and A posting tymodule has Direct postinimbalance.

Hands-On

ew the Res

an appear on The Potentialample of the o

AL CONFLICT

ments that ind

of the Post pmodel group

nd warehouseof the Post payable param type Product

ot represent in type Productit is posted to

ype with an unoccurred on tngs on this m

n Lab: Insi

sults and

the Potentiall Conflicts – Ioutput of the

TS - INVENTO

dicate a confli

hysical invenp "X" in the Ite managemenacking slip inmeters form tion, picking

nventory. tion, picking o a main accon-authorized this main acc

main account r

ight and R

Take Acti

l conflicts - IInventory andreport.

ORY AND GE

ict can includ

ntory check btem model gr

nt. n ledger checis not correctlist is posted

list is a produount that repreposting type ount. representing i

Reconcilia

ion

Inventory and General Led

ENERAL LED

de the followin

box is not corroup form in

ck box in the t. to a main acc

uct of the typeesents inventorelating to an

inventory cau

ation

6-13

nd dger

DGER

ng.

rrect

count

e ory.

nother

use




6-14

This list is not a complete list of possible conflicts. Use the information to correct the original transactions.

You received the following comment in the output of the Potential conflicts - Inventory and General ledger report:

"Direct postings on this main account representing inventory cause imbalance."

What should you do to find and correct the issue?

Scenario: Inventory Value Statement with Standard Cost Breakdown

The Inventory value statement with standard cost breakdowns report displays beginning and ending balances and period activity. The report format has several variations reflecting the report options. For example, the report format can display period activity for items or orders or cost groups depending on your selection of the report option for axis. Selectively report information based on selection criteria, such as the site or item number.

Exercise 1: Print the Inventory Value Statement with Standard Cost Breakdown Report

To print the Inventory value statement with standard cost breakdowns report, follow these steps.

1. Open Inventory and warehouse management > Reports > Status > Inventory value > Inventory value statement with standard cost breakdowns.

2. Select CY in the Date interval code field. 3. Select Item in the Sorting and grouping field. 4. Select Cost group type in the Column headings field. 5. Select No in the Detail field. 6. Select the Include beginning check box to include beginning

balances.



Ch

7. 8.

FIGSA

9.

hapter 6: H

In the ViewOptionally,

GURE 6.10 INAMPLE

Click OK.

Hands-On

group, selectyou can click

NVENTORY V

n Lab: Insi

t the Site andk Select to filt

VALUE STAT

ight and R

d Warehouse ter the report

TEMENT REP

Reconcilia

check boxes.criteria.

PORT DIALOG

ation

6-15

.

G



Hands-Microso

6-16

-on Lab Coft Dynam


Report O

The Inventoof this repo

FIGURE 6.

The follow

Field Date inter

nd Invento2012

Options

ory Value Staort with the op

11 INVENTO

ing table prov

Drval code S

thand

ory Valuat

atement Repoptions selecte

ORY VALUE S

vides descript

Description elect from the

he date intervnd to dates, oates.

tion in

ort Output Samd in the previ

STATEMENT

tions for the c

e available daval code automor you can ma

mple figure dious exercise.

T REPORT OU

controls in thi

ate interval comatically assiganually enter t

displays a sam.

UTPUT SAM

is report.

odes. Selectingns the from the from and

mple

PLE

ng

to




6-17

Field Description

Sorting and grouping

Select the primary focus of the report. Select from the following items. • Item: Display period activity by item, with

subtotals by item and by item group. • Origin: Display period activity by transaction type,

with subtotals by transaction type. The types include purchase orders, production orders, and inventory journals.

• Cost group: Display period activity by cost group, with subtotals by cost group and by cost group type. The types include direct materials, direct manufacturing, indirect, and undefined.

Column headings Select how the report columns should be used to display cost information. Select from the following items. • Cost group type: Use four columns to display

values as direct materials, direct manufacturing, indirect, and undefined.

• Fixed/Variable: Use two columns to display values as fixed or variable (based on the behavior that is assigned to a cost group).

• Position: Use four columns to indicate the values of on-hand, work in process (WIP), deferred, and cost of good sold (COGS).

Detail Select the level of detail that you want in the report. Select from the following items. • Transaction: Display transaction detail. • No: Do not display transaction detail. • Decomposition: Display additional detail about

cost groups when the primary focus concerns items or origin. A primary focus on cost groups means that decomposition details are already displayed.

Level Level only applies to detailed reporting when the primary focus concerns items or origin. Select from the following items: • Single: Provide a detailed breakdown of costs by

transaction. • Multi: Provide a detailed breakdown by cost

group. • Total: Do not provide a detailed breakdown.




6-18

Scenario: Variance Analysis Statement Report Production variances are calculated after you end a production order for a standard cost item. The variances reflect a comparison between the reported production activities and the calculation of standard costs for the production item. The variances do not reflect a comparison to the production order's estimated costs.

The production activities that are reported include the consumption of material and routing operations, together with the associated indirect costs, and the quantity that is reported as finished. The following four types of variances are calculated.

• Lot size variance • Production quantity variance • Production price variance • Production substitution variance • Purchase price variance

Exercise 1: Print the Variance Analysis Statement Report

To print the Variance analysis statement report, follow these steps.

1. Open Inventory management > Reports > Statistics > Variance analysis statement.

2. Select CY in the Date interval code field. 3. Select Item in the Sorting and grouping field. 4. Select Cost group type in the Column headings field.



Ch

5. 6. 7.

FIGDIA

8.

hapter 6: H

Select No inIn the ViewOptionally,

GURE 6.12 VAALOG

Click OK.

Hands-On

n the Detail figroup, selectyou can click

ARIANCE AN

n Lab: Insi

ield. t the Site andk Select to filt

NALYSIS STA

ight and R

d Warehouse ter the report

ATEMENT RE

Reconcilia

check boxes.criteria.

EPORT

ation

6-19

.



Hands-Microso

6-20

-on Lab Coft Dynam


The Varianof this repo

FIGURE 6.SAMPLE

nd Invento2012

nce Analysis Sort with the op

13 VARIANC

ory Valuat

Statement Repptions selecte

CE ANALYSIS

tion in

port Output Sd in the previ

S STATEMEN

Sample figureious exercise.

NT REPORT

e displays a sa.

OUTPUT

ample




6-21

Summary There are many reports available in Microsoft Dynamics AX 2012. You can use the information in these reports to review, research, and reconcile your system.

The primary reports used for inventory costing and valuation include the following.

• Inventory value report • Potential conflicts - Inventory and General ledger • Inventory value statement with standard cost breakdown • Variances analysis statement

Each report has various options to help you narrow your criteria and receive more targeted results on the output.

The reconciliation process is important in any business. You can use the reports to help streamline the reconciliation process. Following best practices and using care when updating or changing your system setup, can help to prevent issues that can cause your subledger and general ledger to become imbalanced. You should use care when creating or updating the following.

• Item groups • Item model groups • Resource groups • Resources • Cost groups • Posting profiles (in Accounts payable and Accounts receivable) • Accounts for automatic transactions • Posting definitions




6-22

Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter

1.

2.

3.




6-23

Solutions Scenario: Potential Conflicts Report

You received the following comment in the output of the Potential conflicts - Inventory and General ledger report:

"Direct postings on this main account representing inventory cause imbalance."

What should you do to find and correct the issue?

MODEL ANSWER:

1. Note the Voucher number of the transaction. 2. Open General ledger > Inquiries > Voucher transactions and search for the voucher. 3. Find the transaction origin and then reverse the transaction. NOTE: You can also click the blue link in the report ouput window to open the selected transaction.




6-24



Documents

CHAPTER 6: HANDS-ON LAB: INSIGHT AND RECONCILIATION