When moving from a legacy system into Dynamics NAV (Navision), one of the areas you want to try and avoid is messing with the inventory G/L accounts. Most systems are usually pretty good with open A/R and A/P accounts, they can be transferred using the “posting back to the same account” technique that most implementers do. The beginning A/R and A/P G/L accounts would be based on your entry on the General Journal. This is assuming that the A/R and A/P aging reports matches the G/L.
Inventory valuation is one of the areas where we find the most discripencies based on what is entered on the Item Journal from the physical count and the inventory valuation report from the legacy system. Depending on your requirements, sometimes it doesn’t make sense to go through line by line on the item journal to see where the differences are.
A rule of thumb I always go by is to let Navision determine what the inventory value should be in the G/L based on the positive adjustments posted from the Item Journal.
To accomplish this, do the following:
Suppose you have the following G/L accounts:
11000 – Inventory
58850 – Inventory Adjustment
When posting a positive adjustment in the Item journal, it will post a debit to Inventory and credit to Inventory Adjustment.
When you’re ready to enter your beginning G/L balance, enter the G/L balance for Inventory to account 58850. This way, the difference between the inventory G/L balance from the legacy system and Navision will be reflected on account 58850.
If you do not want to reflect the adjustment in the current period due to financial reporting reasons, you can adjust the difference into an asset account. We usually recommend create a separate account (i.e. 11100 – Inventory Suspense) to store this difference until you can depreciate it.
By not posting any general journal entries to the inventory accounts, you’ve ensured that inventory valuation reports will ALWAYS match G/L, making everyone happy in the process.