Costing Issue in Ax 2012 – Changing Quantity at Purchase Order Invoice Form

A prominent costing issue could lead you in trouble if purchase order invoicing is done (using wrong method) with less quantity against what is physically received. Let’s understand this issue in detail;

Let us discuss a scenario –

PO is issued with the quantity of 10 iPhone @ Price of $2,000 each. PO value is AED $20,000 (10*2,000)

Product receipt posted with the same ordered quantity of 10 @ Price of AED $2,000 each. For a reason, supplier sent invoice for 6 quantity only and confirmed to sent another invoice for remaining 4 quantity.

Let’s directly jump to the PO invoice form and change the invoice quantity from 10 to 6. System throws the first warning;

“The invoice update quantity is less than the quantity of matched product receipts. The inventory cost for the items will be understated.”

PO Invoice Q changed

Press Ok

System throws the another warning message;

“The inventory cost for the items will be understated. Are you sure you want to continue?”

PO Invoice Q changed_1

Press Yes and system accepts the changes made in the PO Invoice quantity. However, system shows Match variance notification;

Match variance

Click on the Post button and do the PO invoicing.

Once quantity is changed at PO Invoice form and PO is invoiced, PO is no longer in Open state and fully invoiced.

System understanding is – You received 10 quantity from the supplier, however supplier is charging you only for 6 quantity. It understates the item cost and post the financial cost of 10 items at invoiced amount of $12,000 i.e. per item cost is $1,200.

Inventory Transactions :

Inventory Trans

Item Cost @ on-hand inventory form;

Item Cost

So before you think of changing the quantity directly @ PO invoice form, think twice.

There is a standard set-up to put a control on changing the quantity at PO invoice form. Refer the following blog;

Now what is the right way of doing the PO invoicing if invoice is received for less quantity. Will explain you in the next blog 🙂

Happy Learning!

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