Abnormal Item Charges

Dynamics NAV is a ERP software that’s built on best business practice. However, that’s not to say that the users of Navision operates on best business practice.

This post describes what I would like to call Abnormal Item Charges. Again, as with what I’ve described with Abnormal Posting Date, don’t bother looking it up on any GAAP dictionary or NAV website. It’s a term that I made up because I lack the vocabulary to think of a better name. English, afterall, is my second language.

What is Abnormal Item Charge?
Abnormal Item Charge are posted item charges that are applied to the open Purchase Order that has not been received or invoiced.

An Example
A lot of times when a company orders some items from factories, they will buy the finishes of the goods that you want to order, i.e. special metallic paint. Because of the competitiveness of factories, they will sometime offer the company to pay only partial (or no payment at all) until the products are successfully manufacturered. The special finishes they will have to pay now.

So at the time of the PO creation, the company will only have paid for the special metallic paint. The company wants to pay for the paint while allocating the cost of the paint to the inventory that they will possiblity receive in the future. So an item charge line is created on the PO and allocated the cost of the paint ot the purchase lines.

The Effects on G/L
As we discussed previously, this item charge will post to the following G/L accounts:
+ Inventory
– A/P
+ Item Charge G/L Account (Purchases)
– Direct Cost Applied

So the additional cost of the item is correctly accrued to the inventory value.

The Problem
The additional cost components of the item has been allocated and correctly posted to the G/L. The problem is, there’s no inventory for the additional cost to apply to.

This means that the value entries will be created, but it will not reflect on the inventory valuation report until the items are received.

The Solution
In version 6.0 (NAV2009), they put out a fix for this in codeunit 90. Now if you try to post an item charge when there are no item ledger entry, it’ll give an error. However, this solution causes problems for the business case described above.

The solution for this was to comment out the code in NAV2009, then create a report that captures the additional cost posted to the G/L that did not have the corrosponding item ledger. We call this report the Abnormal Item Charge report. It’s a pretty simple report. If your company has the same problem, let me know. I’ll send you the report.

EDIT: One of my colleagues reminded me that we can also use the Prepayment Functionality in the US version to handle this. Basically, we would set the item charge line prepayment percentage to 100. Doing this will post the transaction into the prepayment account instead of the inventory account.

Again, NAV is designed to be best practice. This cause in particular forces us to break that best practice because it makes business sense. Note that I don’t usually like to break NAV’s built in best practices, but in this situation, it was a frequent part of the some of our client’s business, especially when factories are competing for orders in a down economy.

Dynamics NAV 2009 Reporting Book Released

Looks like I jumped the gun when I wrote about the book release on this post.

For real, the Dynamics NAV 2009 reporting book is now officially released. Again, you can buy a copy of the book here:

Back when I was asked to review this, I knew this was going to be a must read book for any people out there wanting to develop reports in Navision. After the final product is delivered to me, I have to say that the final book blew away even my original expectations!

Aside from the content it provides, Steven Render (the author) really made an effort to document all the necessary steps to create good looking and complex reports with step by step examples, and… PICTURES! For all of you future NAV book writers, it really doesn’t matter if you can construct the most beautiful sentience in the world. Well done pictures will always win. Better yet, draw/write within the pictures, as what Steven has done in his book.

I’m not alone on this as Eric Wauters (Waldo), a fellow NAV MVP, also had some good things to say about this book here.

As I mentioned before, this book really patches up the lack of documentation on the reporting side for NAV2009 and its capabilities. The information here is definitely not something you can just download from Partnersource or Customersource.

Recap of Directions 2011 for Dynamics NAV (Navision)

This post is an overview of my experiences at Directions 2011 – Connect Learn Execute. Again, if you don’t already know, Directions is THE single event that any partner dealing anything with Dynamics NAV (Navision) absolutely has to attend. Not only do they preview a lot of new stuff, it’s also a great place to learn from what other partners are doing and the challenges they’re facing in the market.

The Vibe

The event itself was spectacularly put together by the Directions people. Everything was very organized and well put together. Having been to Directions since 2006, every Directions I attended since had been better than the previous. There were always incredible key takes aways and new friendships that are made.

However, this year I felt something missing. In particular, the energy level to be low. The problem wasn’t the event itself, rather, it was the attendees lacked enthusiasm and energy. In addition, I significantly noticed a lot of partners that I’d use to see (even until last year) did not come to this year’s event.

There are a number of theroies on why I think the energy level is low:

  • The presenters from Europe speak and present with no emotions, like robots. If there’s a competition for monotone speak, the European presenters would be clear winners, no doubt. 
  • There was a couple of presentations that I would like to call the “Doom and Gloom”. Basically, we have to significantly change our business model to be volume based seller. 
  • RTC. Apparently, many partners are still struggling with this.

Demos Dynamics NAV 7 (Navision 7.0)
Looking at Dynamics NAV 7, Microsoft really made significant improvements in usuability, development environment, performance, etc. etc. They’ve addressed everything (and I do mean everything) that I thought was a problem with Dynamics NAV 2009. It’s really a product that everyone can really be excited about.

The reason I can’t blog much about Dynamcis NAV 7 is because as a Dynamics NAV MVP, I’m under the NDA. And since Dan Brown mentioned that everything we saw in Dynamics NAV 7 is not to be made public in the beginning of the event, I have to follow it. Fortunately, not everyone in the conference cares about what they signed, so you can find a lot more about Dynamics NAV 7 if you did a Google search.

One thing I found strange on this event was how Microsoft showing off freely how Dynamics NAV 7 looks and works, even though the product release date is scheduled for Q3/Q4 2012. I can tell you also that Dynamics NAV 7 that I saw in the MVP program is different than the Dynamics NAV 7 they showed at Directions.

Within one year, anything and/or everything can change. After seeing Dynamics NAV 7 in its current form, and knowing people and rumors will start of fly about Dynamics NAV 7, I really hope Microsoft can release it sooner than later.

Key Take Away
Microsoft has moved to the cloud. Dynamics NAV is moving to the cloud. From the sessions in “Doom and Gloom” series, the message was clear: “Move to the Cloud or DIE!”

Yeah… They were fun sessions to attend…