Now let us keep the “Automatic Cost Posting” checked and see the results.
Let us take the same item:
Item No.: 1000
Description: Bicycle
Quantity: 1
Unit Cost: 350.60
Direct Unit Cost Excluding Tax: 350.60
Now, let us post a Purchase Order for Receiving. NAV creates the following Item Ledger Entry:
and the following Value Entry:
Please note that the “Cost Amount (Actual)”, “Cost Posted to G/L”, and “Purchase Amount (Actual)” are zero; this is because we have not posted the Invoice yet
Note that the “Expected Cost Posted to G/L” is zero; this is because we have unchecked the “Expected Cost Posting to G/L” option
Since no cost posting is required at this stage, keeping “Automatic Cost Posting” checked or unchecked does not make any difference at this stage.
Once we post the Purchase Order for Invoicing, NAV makes the following changes:
Item Ledger Entry:
and Value Entry:
Since we have checked the “Automatic Cost Posting,” NAV has posted the Inventory to General Ledger along with the Sales:
The positive side of keeping this option checked is, your General Ledger is ALWAYS current; NAV posts ALL costs as and when an Inventory transaction occurs.
The negative side of it is, whenever a Value Entry is created, NAV posts GL entries! This affects the performance of the system.
If we keep this option off and run the “Post Inventory Cost to G/L” report instead, we can compress the GL entries “per posting group.”
When to keep this option checked :
Companies requires the cost to be current always.
Companies posts Inventory transactions 24×7.
There are only few Inventory transactions every day.