Must be using FIFO (First-In, First-Out) costing method. This tool is not applicable for customers using the Average Costing method.

Production Orders must be in an In-Progress or Balanced status to be eligible for recalculation.

Requires Purchase Cost Edit permission to access and execute cost adjustment tools and dashboards.

The costing error must be related to raw materials or packaging from a vendor purchase that has already been consumed by production orders.

The user must have a complete understanding of their inventory flow to ensure the correct products and dates are selected.

Identify the Source of the Costing Error: Before making any adjustments, pinpoint the specific vendor purchase and the raw material or packaging product that has the incorrect cost.

Adjust the Raw Material Cost: Utilize the designated FIFO Cost Adjustment tool to correct the cost of the raw material or packaging product. This step updates the original cost layer.

Run the Production Order FIFO Cost Adjustment: Navigate to the Production Order FIFO Cost Adjustment dashboard. Use this tool to automatically recalculate the costs of all production orders that consumed inventory from the updated FIFO layers within the specified date range.

Allow for Overnight Recalculation: The Recalculate Inventory FIFO Layers process runs overnight. This process automatically creates a FIFO adjustment for any finished goods (FGs) that were sold at the incorrect, previous cost.

Validate the Changes: After the overnight process is complete, review the affected production orders and sales records to ensure the costs have been correctly adjusted. Check for accuracy and consistency across the relevant financial reports.

FIFO (First-In, First-Out) Costing: An inventory valuation method where the first goods purchased or produced are the first ones sold.The cost of the oldest inventory is expensed first.

Production Order: A document used to track the manufacturing process and the associated costs of producing a finished good.

FIFO Adjustment: An accounting entry or process that corrects the cost of inventory layers to reflect accurate purchase costs.

Recalculate Inventory FIFO Layers: An automated, overnight system process that recalculates and adjusts the cost of inventory layers based on manual corrections, generating necessary adjustment invoices for any sold inventory.

Finished Goods (FG): Products that are completed and ready for sale.

Use with Extreme Discretion: This tool is intended for correcting significant and material costing errors. Avoid using it for minor or routine adjustments.

Verify Before Execution: Always double-check the raw material, date ranges, and other parameters before running the adjustment tool to prevent unintended changes to production order costs.

Maintain Accurate Vendor Data: Proactively ensure that vendor purchase costs are accurate at the time of entry to prevent the need for these large-scale adjustments.

Understand Your Costing Method: Regularly review and understand the implications of your chosen costing method (FIFO vs. Average) on inventory and production order valuations.