RSMUS.comToday we will be reviewing automation of accounting for Sales Orders.
We want D365 to automatically code the following journals:
Our focus continues to be on the configuration that enables: synchronized, balanced Inventory sub-ledger vs. balanced Trial Balance general ledger, auto coded transactions.
We will configure selling Finished Goods on our Sales Order. In the next blog we will cover Production Order Posting Profiles, bridging the gap between Part 1, Inventory Posting Profiles, Purchase Orders, and Part 2, Inventory Posting Profiles, Sales Orders.
Chart of Accounts
Create the following Main Accounts in General Ledger and create an Item Group named FG, Finished Goods in Inventory Management.
Prerequisite setup, Inventory Model Group
Inventory management > Setup > Inventory model groups
Turn on Post physical inventory.
This setup enables the Sales Order Shipment (packing slip) to post a journal in the Trial Balance.
Prerequisite setup, Accounts Receivable Parameters
Accounts receivable > Setup > Accounts receivable parameters > Updates [tab]
In addition to step 2 (above), this setup enables the Sales Order Shipment (packing slip) to post a journal in the Trial Balance.
Sales Order Issue (packing slip)
Posting of the sales order issue is dependent on prerequisite set up in the Inventory Model Group (step 2) and Accounts Receivable Parameters (step 3), and the following setups.
When the Sales Order Issue (packing slip) is posted it will use the following setups to assign a Main Account in the journal.
Inventory management > Setup > Posting > Posting > Sales order (tab)
The “Cost of units, delivered” posting type will credit Accrued Inventory for the shipped Finished Goods.
This inventory account is to recognize that the inventory is no longer on hand, because it has been shipped (pack slip posted).
The “Cost of goods, delivered” posting type will debit Shipped Not Invoiced.
It is not important to itemize the debit side of the journal related to the corresponding Item Group (Finished Goods), thus this setup uses the “All” item code so that all Item Groups use the same account (150950).
We are coding the COGS (conceptually ‘Deferred COGS’), upon shipment, to the Balance Sheet (150950).
Reasoning:
We are using a Balance Sheet account, and want to avoid posting Cost of Goods Sold (COGS) to a Profit Loss account:
because we are not posting, accruing, nor deferring any “Revenue” upon shipment.
WARNING: DO NOT use the “Deferred Cost of Goods Sold” radio button, as that is used in conjunction with a separate D365FO feature: Revenue Recognition, which is used when Revenue is deferred.
Sales Order Invoice
When a Sales Order is invoiced, the prior journal, Sales Order Shipment (packing slip) is reversed using the same posting profile accounts assigned in step 4.
Additional invoice specific accounts for the invoicing will be assigned as follows:
Inventory management > Setup > Posting > Posting > Sales order (tab)
The “Cost of units, invoiced” posting type will credit Financial Inventory for the sold Finished Goods.
The “Cost of goods sold, invoiced” posting type will debit the P&L COGS account.
Inventory management > Setup > Posting > Posting > Sales order (tab)
The “Revenue” posting type will credit the P&L Revenue account.
