Restrict backdated cost postings

Every posted inventory value entry has a Valuation Date field. Cost adjustment uses that date to decide which period a cost belongs to. Without a guard rail, a backdated transaction, or an invoice posted long after the corresponding shipment or receipt, can write cost into a period you already closed. When that happens, the next cost adjustment run has to revisit the older period, which is slow on large data sets and can produce results you didn't intend.

The Earliest Allowed Valuation Date field on the Inventory Setup page is a single date that acts as a write barrier on Valuation Date. When the field is set, Business Central doesn't let postings create or change cost in periods before that date. Cost adjustment and rounding still work normally on existing entries, and you can still invoice shipments or receipts that were posted before the date. The cost difference lands in the current period instead of reopening the old one.

Note

The Earliest Allowed Valuation Date is a global setting. Unlike the Allow Posting From and Allow Posting To fields on the General Ledger Setup page, you can't override it.

What the cutoff date allows

When the field is set, the following postings are still permitted:

• Any posting with a Posting Date on or after the cutoff. For example, purchases, sales, transfers, output, consumption, capacity, and so on.
• Invoicing a shipment or receipt that was posted before the cutoff, as long as the invoice has a Posting Date on or after the cutoff. The invoice's value entry is redirected to the new Posting Date, so the cost differential is recorded in the current period instead of the original one.
• Rounding value entries that the Adjust Cost - Item Entries batch job creates, even when their Valuation Date ends up before the cutoff.
• Cost adjustment entries that the Adjust Cost - Item Entries batch job creates.
• Automatic application of a new outbound transaction to an inbound entry that was posted before the cutoff. The new outbound posts at its own Posting Date, and the older inbound is flagged so that the next cost adjustment run can pick it up. Cost adjustment then leaves periods before the cutoff alone.

What the cutoff date blocks

When the field is set, Business Central blocks the following actions:

• Posting a line whose Posting Date is before the cutoff (unless the line is an adjustment or rounding entry generated by cost adjustment).
• Posting a value entry whose Valuation Date would end up before the cutoff. This block includes:
  • Revaluation journal lines that would backdate the Valuation Date.
  • Item charges assigned to a receipt or shipment that was posted before the cutoff.
• Setting Applies-to Entry on a journal line or document to an item ledger entry that was posted before the cutoff. This block includes flows that set the field on your behalf, such as the Applies-to Entry field on a revaluation journal line.
• Undoing a purchase receipt or sales shipment that was posted before the cutoff.
• Reopening a finished production order or assembly order that has any value entries dated before the cutoff.
• Marking an item ledger entry for adjustment from the Item Ledger Entries page when the entry was posted before the cutoff. Such entries are skipped without an error.

Set the cutoff date

Prerequisite: adjust inventory cost up to the cutoff date

Before you can set the date, you must adjust all item entries with a Valuation Date before the target date. You must also cost-adjust finished production or assembly orders, and you can't have open production or assembly orders with value entries dated before the target date.

1. Choose the search icon, enter Inventory Setup, and then choose the related link.
2. On the Inventory Setup page, choose the Adjust Cost - Item Entries action to run the standard batch job and bring inventory into a fully adjusted state.
3. Resolve any inventory period or open-order issues that the batch job reports.

Enter the cutoff date

1. On the Inventory Setup page, in the Earliest Allowed Valuation Date field, enter the cutoff date you want to use.

   Note

   Postings on the cutoff date itself are allowed. Only Valuation Date values before this date are blocked.

2. Save the page.

If Business Central can't apply the date, one of the messages described in the following table displays. Fix the issues, and try again.

Message	What to do
There are unadjusted item entries with a Valuation Date before [date]. Run the Adjust Cost - Item Entries batch job before setting the Earliest Allowed Valuation Date.	Run Adjust Cost - Item Entries and try again.
One or more finished Production (or Assembly) orders have unadjusted value entries with a Valuation Date before [date]. Adjust these orders before setting the Earliest Allowed Valuation Date.	Run Adjust Cost - Item Entries for those orders and try again.
One or more open production and assembly orders have value entries with a Valuation Date before [date]. Finish or adjust these orders before setting the Earliest Allowed Valuation Date.	Finish or reorganize those orders so that their existing value entries are all on or after the target date.

Change or clear the date later

• You can move the date forward or backward at any time. The prerequisites are checked for the new date.
• You can clear the date and leave it blank. Validation doesn't run and posting is fully unblocked.

Typical workflow for a period close

A monthly or yearly closing routine that uses this field typically looks like this:

1. Post everything for the period.
2. Run the Adjust Cost - Item Entries batch job.
3. Run the Post Inventory Cost to G/L batch job to update the general ledger.
4. On the Inventory Setup page, move the Earliest Allowed Valuation Date forward to the first day of the new period.

From this point, posting can't write cost into the closed period. However, you can still:

• Invoice items that were shipped or received before the date. The invoice's cost lands in the current period.
• Run cost adjustment and let it produce rounding adjustments for the closed period.

Tip

Use the Earliest Allowed Valuation Date field together with the Inventory Periods field. Inventory periods let you close one or more named periods and reopen them later, while the Earliest Allowed Valuation Date is a single floor that you raise as part of every close. The two settings work in parallel. A posting is blocked if either setting would block it. Learn more at Work with inventory periods.

Related information

Managing inventory costs
Adjust item costs
Work with inventory periods
Reconcile inventory costs with the general ledger
Design Details: Cost Adjustment
Finance
Inventory

Find free e-learning modules for Business Central here