{"id":646,"date":"2023-02-24T03:27:56","date_gmt":"2023-02-24T11:27:56","guid":{"rendered":"https:\/\/www.apcdynamics.com\/articles\/?p=646"},"modified":"2025-11-04T05:47:57","modified_gmt":"2025-11-04T13:47:57","slug":"changing-costing-method-in-dynamics-nav-dynamics-365","status":"publish","type":"post","link":"https:\/\/www.apcdynamics.com\/articles\/changing-costing-method-in-dynamics-nav-dynamics-365\/","title":{"rendered":"Changing Costing Method in Dynamics 365 Business Central (Dynamics NAV) &#8211; The Unofficial Way"},"content":{"rendered":"<h3><strong>Overview<\/strong><\/h3>\n<p>Every once in a while, a company will want to change their costing method from whatever they have into something else for whatever reasons.<\/p>\n<p><a href=\"https:\/\/docs.microsoft.com\/en-us\/dynamics365\/business-central\/design-details-changing-costing-methods\" target=\"_blank\" rel=\"noopener\">The official way of changing the costing method for any items<\/a> in <strong><a href=\"https:\/\/www.apcdynamics.com\/dynamics-365-business-central\/\">Dynamics 365 Business Central<\/a><\/strong> (Dynamics NAV) is to basically zero out the item and create a new set of item numbers with the new costing method.<\/p>\n<p>However, doing this may not be feasible because you end up losing all item history, in addition, depending on how much history you have, renaming item numbers will take a long, long time.<\/p>\n<h3><strong>The Unofficial Way<\/strong><\/h3>\n<p>There&#8217;s an unofficial way that Microsoft does not promote for companies to change the costing method. This is understandable because if the user does not follow the instructions, there&#8217;s no way Microsoft can support all of the different scenarios that comes up.<\/p>\n<h3><strong>The Preparation<\/strong><\/h3>\n<p>Before the company can make such a change to the costing method, the following tasks has to be done:<\/p>\n<ul>\n<li>All Receipts needs to be invoiced<\/li>\n<li>All Shipments needs to be invoice<\/li>\n<li>All Production consumptions needs to be output<\/li>\n<li>All Transfer Shipments must be received<\/li>\n<li>All Service shipped\/consumed must be invoiced<\/li>\n<li>Remove all reservation entries in the system<\/li>\n<li>All Drop Shipment orders needs to be removed<\/li>\n<li>Run Adjust Cost &#8211; Item Entries process<\/li>\n<\/ul>\n<p>The biggest problem that companies run into is documents that are &#8220;stuck in the middle&#8221;, basically, shipped\/received not invoiced. By not having a clean break, if you were to proceed with the costing method change, you will never be able to tie out your inventory valuation to the General Ledger.<\/p>\n<h3><strong>The Method<\/strong><\/h3>\n<p>Here\u2019s what you will need to do in Dynamics 365 (Dynamics NAV) in order to convert to a different costing method:<\/p>\n<ol>\n<li>Run Adjust Cost \u2013 Item Entries<\/li>\n<li>Negative adjust all items to 0 as of a specific date (for example, 03\/31\/2018)<\/li>\n<li>Run Adjust Cost \u2013 Item Entries<\/li>\n<li>Force change the costing method using code without running validation (<a href=\"https:\/\/youtu.be\/FvGDhnsw_4E\">use Configuration Package<\/a> or get a developer should do this)<\/li>\n<li>Positive adjust all items back in on the day after step #2 (for example, 04\/01\/2018)<\/li>\n<li>Run Adjust Cost \u2013 Item entries<\/li>\n<\/ol>\n<p>Then done, you&#8217;re done.<\/p>\n<h3><strong>The Aftermath<\/strong><\/h3>\n<p>After the costing method change is done, back dating of inventory transactions <strong>cannot<\/strong> be allowed.<\/p>\n<p><strong>This includes any item charges that may apply to receipts posting in the previous periods!<\/strong><\/p>\n<p>For example, if we change the items from FIFO to standard on 03\/31\/2018, no additional postings for these items on or prior to 03\/31\/2018 should be made. This will need to controlled through the Allow Posting From on the General Ledger Setup and the User Setup.<\/p>\n<p>In addition, revaluation of inventory should not be done prior to 03\/31\/2018 as well for the items. Doing so may cause irreparable damage on the inventory value and will cause your inventory ledger to not match your G\/L.<\/p>\n<h3><strong>Conclusion<\/strong><\/h3>\n<p>The method described above is not recommended by Microsoft. I think this is because there are many ways things can go wrong if not done properly.<\/p>\n<p>Having said that, we&#8217;ve done this for many of our customers without problems. Strict controls on when the posting is allowed must be followed. If done properly, changing costing method is really not that big of a deal.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview Every once in a while, a company will want to change their costing method from whatever they have into something else for whatever reasons. The official way of changing the costing method for any items in Dynamics 365 Business Central (Dynamics NAV) is to basically zero out the item and create a new setRead more<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-646","post","type-post","status-publish","format-standard","hentry","category-costing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Change Costing Method in Dynamics 365 Business Central<\/title>\n<meta name=\"description\" content=\"Learn the unofficial way to change costing methods in Dynamics 365 Business Central without losing history. 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