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Migrate inventory costing data for your items when managing your inventory

Applies to: Dynamics 365 Supply Chain Management

This article describes the process for migrating inventory costing data for your items when you use Dynamics 365 Supply Chain Management to manage your inventory.

Background

You need to migrate costs at the time of cut-over to ensure that new transactions are created with the correct cost and that your financials correctly reflect the cost of your items. You will need to migrate your inventory costing data regardless of the costing methodology you use or the industry you are in. However, the industry and costing methodology may have an impact on the approach you use to migrate the inventory costing data.

Pattern: Load cost components

When you are preparing to load your inventory costs, you will need to carefully plan the steps based on the types of products and services you sell, and the various cost components that you have. There are four key cost components to consider:

  1. Raw materials, services, or distributed goods costs

    If you manufacture items, the raw materials that are part of your bill of materials or formulas will need to have a price. If you don't manufacture items, the items that you purchase and directly distribute to your customers or services that you provide need to have a cost.

  2. Indirect costs

    If you use the Costing sheets to calculate indirect costs, also known as overheads, for purchased or manufactured items, you must load the indirect costs.

  3. Resource costs

    If you manufacture items and use routes to track the labor related costs of your manufactured goods, you must migrate the resource costs. Such costs are known as cost categories in Dynamics 365 Supply Chain Management.

  4. Sub assembly or finished good costs

    When you manufacture goods in your organization, you will need to perform a cost rollup for any sub-assemblies or finished good products to define the sum of the costs

Prerequisites

Before you can begin to load costs, you will need to ensure that you have defined and configured the following:

We recommend that you use the Data management framework to migrate your data related to costs. Learn more at Data management overview. You can use the following entities to import the required data:

  • Pending item prices V2 (Load raw material or distributed goods and service prices.)

  • Pending route cost category unit costs (load resource costs by cost category.)

  • Costing sheet node calculation factors V2 (load indirect costs into the costing sheet.)

Procedure: Migrate inventory costing data

Use the following steps to migrate your inventory costing data.

  1. Use the Data management framework to load all raw material costs into the costing version.

  2. Use the Data management framework to load all indirect cost calculations into the costing version.

  3. Use the Data management framework to load all cost category prices (for resources) into the costing version.

  4. Validate the migrated data.

  5. Activate the costing version prices.

  6. Perform a cost rollup.

  7. Validate the rolled-up costs.

  8. Activate the rolled-up costs.

Tip

If you are not using standard cost you can still use costing versions to easily manage the purchase prices and costs of your items. Alternatively, you can use trade agreements to manage purchase prices, or the default price fields on the Released products page to manage the costs.

Anti-pattern: Load fully loaded cost prices when using standard cost

When you use standard costing as your costing methodology for one or more items, it is important to note that you should not migrate costs for the semi-finished or finished good type items that have a BOM or Formula. Additionally, you should not use the costing version to manually enter the cost of the semi-finished or finished good product. Instead, you should always perform a cost roll-up by using the Calculation process on the costing version.

If you load or enter costs manually for a semi-finished or finished good product, the system will always calculate a variance when finishing a production order for the difference between the product cost, and the indirect costs and labor costs. These variances will be posted into the related general ledger accounts and make reconciliation difficult. These variances are not a true reflection of the variances on your production process.

Additional resources

You can use the following resources to learn more about data migration and inventory costing in Dynamics 365 Supply Chain Management.

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