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Inventory Costing- A COSTLYaffair…….?

Indianapolis Colts Arizona Cardinals in the first/second quarter of a football game Sunday, Sept. 27, 2009 in Glendale, Ariz. (AP Photo/Ross D. Franklin)

Inventory costing and its management plays a very important role for any kind of organisation, be it big, mid-sized or small, reason being these inventory figures directly affect the profit margins of a company.An organisation may face situations like stock out problems due to lack of proper planning, or funds being tied up to store, manage and handle excess inventory, inaccurate cost calculations, backdated entries affecting stock valuations or inability to obtain accurate cost of production. All these drawbacks related to inventories prove costly to the company in the long run!
However, such challenges can be met through a standard ERP such as Microsoft Dynamics NAV which has processes for proper inventory costing and overall inventory management such as-

  • Ordering parameters for stock management like Reordering level, Reorder Quantity, safety stock
  • Facility to know ‘expected’ costs, i.e. costs of material receipts or shipments till the time they are actually invoiced,
  • Real time effects to Inventory accounts that too automatically
  • Facility to close/lock periods so that back dated entries or adjustments do not affect balances or stock valuations for that particular period
  • Work -In-Progress inventory valuations specially for manufacturing industries
  • Accuracy of costs based on Costing method selected.

And many more….
With such robust features, it is possible to streamline inventory related processes in the organisation thereby ensuring smooth production and sales and to maintain the health of the financial statements.
To know more, reach out to us at www.dhyey.comor write to nilesh@dhyey.com.We would be happy to assist you as implementation and support partners and help you achieve the desired dream for your company!

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