5th of 5 posts related to item cost in Business Central
Cutovers get messy when GRNI, costing, and the G/L aren’t playing the same song. This approach keeps them in tune by cleanly splitting what’s already invoiced from what’s received but not invoiced, then letting Business Central do what it does best: adjust costs and reconcile.
Pre-checks (before any postings)
- If GRNI should hit the G/L during cutover, set Expected Cost Posting = On and Automatic Cost Posting = On.
- In Posting Setup, make sure Interim Inventory (GRNI asset) and Accrued Purchases (GRNI liability) are defined.
- Lock Allow Posting From/To around the cutover date. Use dedicated batches and a Reason Code like
OPENto tag every cutover entry.
Posting balances
Step 1 — On-hand already invoiced (Bucket A)
- Item Journal → Positive Adjustments at the final unit cost dated on the cutover.
- G/L impact: DR Inventory / CR Inventory Adjustment (or Opening Clearing).
- Costing notes:
- Average: one line per item at final average cost is fine.
- FIFO: post one line per remaining layer at its actual cost, in oldest-first order. See “FIFO is FIFO from Day One.”
Step 2 — Received, not yet invoiced (Bucket B / GRNI)
- Recreate Purchase Orders and Post Receipts only (no invoices) on the cutover date.
- Item/Value Entries record Cost Amount (Expected).
- G/L (if Expected Cost Posting = On): DR Interim Inventory / CR Accrued Purchases.
Step 3 — Trial Balance import
- Recommended: Exclude subledger-controlled accounts (Inventory, A/R, A/P, FA…).
- Bring GRNI only: DR Interim Inventory / CR Accrued Purchases for Bucket B total.
- If you must include Inventory on the TB, include Bucket A only and use a clearing to avoid double-counting.
Step 4 — Costing functions
- Run Adjust Cost – Item Entries, then Post Inventory Cost to G/L.
Step 5 — Reconciliation (as of the cutover date)
- Inventory Valuation (include expected costs) ≈ G/L Inventory + Interim Inventory.
- Reconcile Inventory to G/L report shows no mismapped postings or dates.
- Accrued Purchases equals total GRNI from PO receipts.
After go-live invoices arrive
Post Purchase Invoices against the receipts. Business Central automatically clears Interim/Accrued, moves cost to Inventory & A/P, and settles differences through cost adjustments.
Controls & pitfalls to avoid
- Don’t post 0-cost positive adjustments. Enter the actual/final unit cost (BC may default from the Item Card—override it).
- Average: one journal line per item at the final average cost is acceptable.
- FIFO: one line per layer at the actual cost in chronological order (oldest remaining quantity first).
- Don’t use Item Journal for GRNI items. You’ll double inventory when the invoice posts.
- Ensure Interim/Accrued accounts exist. Otherwise GRNI won’t hit the G/L when Expected Cost Posting is on.
- Keep posting dates locked, use reason codes, and schedule Adjust Cost regularly.
Where teams go next: Document your Bucket A/B rules, save your cutover batches for audit, and add a post-go-live Adjust Cost job queue so inventory and COGS keep telling the same truth.
Wrap
I hope this post and the other 4 in this series have helped to clarify for you some of the nuances and pitfalls of item cost in Business Central. This series is by no means all the information you need as we only touched on a few scenarios and a couple of the costing methods. What this series did do, I hope, is make it easier for you to work the Righter WayTM in Business Central.
