Monday, March 24, 2014

Importing a Budget via the Excel Add-in

Here is an example of how to import a Budget Register Entry through the Excel Add-in using the Contoso Demo Data.
PreConfiguration:  You have installed the Excel Add-in components.  
Area 1:  Configuring the Inbound Port

1.  Open a Development Workspace (CTRL + SHIFT + W).
2.  In the AOT navigate to Services >BudgetTransactionService.
3.  Right-click on it and select Add-ins > Register Service as seen in figure 2.
4.  Close the Development Workspace.
5.   In the AX Client navigate to System Administration > Setup > Services and Application Integration Framework > Inbound Ports.
6.  Select the New button to create a new port and populate the following:
               ·    Port Name: BudgetImport
                ·    Description: Importing Financial Budgets
 7. Select the Service Operations button.
 8.  Add all the services that start with BudgetTransactionService to the left column as seen in figure 4.
Area 2:  Setup with Excel

1.  Open Excel and create a new spreadsheet.
2.  Select the Dynamics AX tab.
3.  Select the Connection button.
4.  Select the Legal Entity that you want to import into and the Account Structure you will evaluate against.
5.  Select the OK button.
6.  On the Dynamics AX tab select the Add Data button > Add Data.
7.  Select the Budget Register Entries selection from the list and select OK.
8.  You should see a form open on the left side of the Excel Spreadsheet with fields that you can drag onto the spreadsheet.
9.  Select the following fields in this order to drag onto the spreadsheet.
·    Ledger.Ledger Name   --- This will pull two fields onto the spreadsheet
·    Budget Code
·    Budget Model
·    Default Date
         10.  Expand the Budget Account Entries node and drag the following field onto the form – move them a couple                         spaces to the left of your last field (Default Date).
1.  Parent.EntryNumber
2.  Date
3.  Currency
4.  LedgerDimension.MainAccount
5.  Comment
6.  Transaction Currency Amount
11.  Close the pane with all the fields that you can drag on to the spreadsheet.
12.  Add the following information into line 2:
Header Entries
     Ledger.Ledger name:  ceu -- (this is the company name).
     Entry Number:  Test1  -- (This is a place holder, your number sequence from within AX will substitute when you import).
     Budget Code:  Budget
     Budget Model:  Sub1
     Default Date:  9/10/2012

Lines Entries
     Ledger Name:  ceu
     Entry Number:  Test1  ---- This must match your header entry number
     Date:  9/10/2012
     Line Number:  1
     Currency:  USD
     LedgerDimension.MainAccount:  170150
     Comment:  Anything you want
     Transaction Currency:  Amount:  10,000
 13.  Select any cell that is blank on the spreadsheet – this will activate the “Publish Data” button.
14.  Select the Publish Data button > Publish All.
 NOTE:  You will see all data from the BudgetTransactionHeader and BudgetTransactionLine tables populate on the spreadsheet which is fine – this is in case you want to update which you can also do from the spreadsheet.
 15.  Open an AX client.
16.  Go to Budgeting > Common > Budget Register Entries.
17.  Search for a budget register entry with the date of the one you entered (9/10/2012 in my case).
You can see it imported correctly.  I can also see that “Test1” was replaced with 000529_1032 which was the next number in my number sequence.

If I wanted to add more lines to this budget entry it would be as easy as adding more lines to your spreadsheet with the correct entry number.

Inventory Valuation Methods in Accounting

Inventory can make up a large amount of the assets on the balance sheet and so knowing how to analyze the inventory, and the method used by management is crucial.

To put it in the most basic form, inventory is what you have in stock. If you expand on this definition to look at what is involved on the other side of the scale to get the ending inventory amount, the equation for inventory is

Beginning Inventory + Net Purchases – Cost of Goods Sold = Ending Inventory

In words, your beginning inventory along with your purchases and then subtracting what you have sold, results in ending inventory.

But this is where it gets tricky with GAAP rules. Depending on the inventory valuation method used by the company, the COGS can vary considerably which ultimately affects the ending inventory.
Sadly, it is not as easy as counting what is left on the shelf at the end of the day to get the ending inventory value.

Basic inventory valuation methods are
1. Average cost method
2. First In First Out (FIFO) method
3. Last in First Out (LIFO) method
Average Cost Method
To put it real bluntly, the average cost method is rarely used. This method does not offer any real convenience or added accuracy.But is easy to track and analyse the inventory movemenet.

The equation for average cost method is as follows.
Average Cost = (Total Quantity of Inventory Units) / (Total Quantity of Units)
Cost of Goods Sold = (Average Unit Cost) x (Number of Units Sold)
For example if 1,000 toys are produced on Monday at a cost of $1 and then on Tuesday another 1,000 toys are manufactured at a price of $1.05, the average cost method would value the inventory at $1.025 a piece.
FIFO Method
FIFO method of valuing inventory is considered to be the aggressive method.
FIFO works like how you maintain your fridge at home. After you have bought some groceries, you tend to place what you just bought at the back of the fridge in order to finish off the older food before it spoils.
In other words, under FIFO, the oldest goods are sold first and the newest goods are sold last.
As a formula it would look like this
Unit Cost per batch = (Cost/Quantity) for each batch
Cost of Goods Sold = (Unit Cost x Quantity) for each batch
Using the toy example above, if 1,000 toys were then sold on Wednesday, the COGS would be $1 per unit. The remaining inventory on the balance sheet would then be worth $1.05 each.
LIFO Method
LIFO is the opposite of FIFO. Instead of the oldest inventory being considered as sold first, the newest product is sold first. While the factory analogy works for the FIFO, consider a bakery. By lunch or evening, the bread baked from the morning will not sell as well as the fresh ones from the afternoon batch.

This means that cost of the latest inventory now becomes the COGS with the cost of the oldest inventory being assigned to the inventory value on the balance sheet.
The equation is essentially the same as FIFO since both are calculated based on batches of unit sold
Unit Cost per batch = (Cost/Quantity) for each batch
Cost of Goods Sold = (Unit Cost x Quantity) for each batch

Using the toy example, the 1,000 units sold on Wednesday would have a COGS of $1.05 per unit, with the remaining 1,000 toys being valued at $1 each.
How Inventory Valuation Affects Profits and Assets
As you can see from above, despite ending with the same 1,000 toys, FIFO assigns the inventory value to be $1,050 compared to the LIFO $1,000.
But another point is that the method of inventory valuation does not just affect the balance sheet. Gross profit also varies considerably. How?

Gross Profit = Sales – COGS

COGS differ under FIFO and LIFO, and if your COGS is low, then that means gross profit will increase.

The table below sums up how each of the three inventory valuations vary.