General Process for Migration to Weighted-Average Cost

Overview

Migrating to Accounting Seed’s Weighted-Average Cost system from the Standard Cost inventory valuation system will require assistance from our Customer Support Team. However, in preparation, there are several things that can be done prior to the migration. This article provides you with the general steps to perform as part of the initial process for migrating to Weighted-Average Cost.

The initial migration process steps in this article are for Financial Suite and Orders & Inventory Standard Cost Customers. 

As a starting point to review information about Weighted-Average Cost, refer to the following Knowledge Base articles:

• Inventory Valuation - Weighted Average Cost
• Allocating Inventory to a Sales Order
• Receiving/Unreceiving a Purchase Order

General Process for the Migration

For information about the Detailed Migration Process, refer to the Detailed Process for Migration to Weighted-Average Cost article. 

1. Reconcile the physical inventory to your inventory valuation on the General Ledger.
   
   Perform this step to determine your correct inventory quantity and valuation. That way, you will have an expected result when completed. The end result is to have the total physical inventory numbers match precisely with the inventory valuation on the General Ledger.
   
   As a part of this process, complete the following:
   
   
   1. Perform cycle counts by:
   1. Product
   2. Warehouse
   3. Location
   4. Ledger.
   2. Reconcile the Inventory Cost.
   1. Refer to the Report on and Reconcile Inventory article.
   3. Determine the average cost for each product.
      Note: Since the variance has already been accounted for, the Weighted-Average Cost for each product should equal the Standard Cost for each product.
      
      Note: Multi-Currency users will need to consider this by ledger and by currency.

2. Verify that Purchase Orders and Sales Orders are all either fully closed or completely open.
   
   
   1. Purchase Orders must be either fully received, and have the payable generated and posted.
      
      Or, they must be completely unreceived, with no payable generated.
      
      
   2. Sales Orders must be either fully allocated, and have the billing generated and posted.
      
      Or, they must be completely unallocated, with no related billings.
      
      
   3. If you use Accounting Seed’s Manufacturing Build process, everything must be fully allocated and built.
      Important: There can be NO partially built orders.  
      
      The Manufacturing Build will be transitioning to a new process. For more information, refer to the Manufactured Product Setup and the Build Manufactured Product article.
      

      Your business processes will need to be considered, as they will impact the timing and switch over from Standard Cost to Weighted-Average Cost.

3. Set up the Purchase Prices.
   
   1. This includes the Price, Product, and Vendor (optional)
   2. An import template will be coming soon.
   3. For more information, refer to the Purchase Prices section of the Inventoried Product Setup article.  

4. Run Inventory reports to ensure all existing quantities and details are documented prior to exporting them for the switch over from Standard Cost.
   
   

Note: If you are a Financial Suite only customer with Product Costing Enabled, the Billing posting will no longer include the product costing transactions. Please contact our Customer Support Team for assistance with planning your migration.