I called Jobette, and the issue is that somehow someone appears to have set up one of their Inventory Control Account Sets to use FIFO inventory Costing.

Bad Move.

She is going to correct and change back to moving average for any stocking unit control account sets. Changing back to moving average can be done on the fly and then she can make the necessary costing adjustments to correct the FIFO processing errors.

This is not intended to be a discussion point for why I would normally request that all clients use moving average for their inventory control account sets instead of FIFO, but FIFO has created more costing errors because it needs more administrative attention than the benefit that FIFO is intended to derive. Anyone using the concept of just in time inventory should not be using FIFO. FIFO was a valid costing method when I was doing audits 35 years ago, when clients had oodles of inventory and no one considered inventory turnover ratios.

This is just best practice advice from a CPA and an experience Accounting Systems integrator. We have seen far to many errors created by posting adjustments to the wrong FIFO cost pool with periodic adjustments, that come back to bite with costing errors in Order Entry. Anyone still using FIFO should consider the benefits of moving average.

If you are unsure on how to correct or not confident on how to change your costing method to moving average, please contact your consultant. It will be the best money value you have ever spent.

Best,
Brian