Detailed Process for Migration to Weighted-Average Cost

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Overview

Note: To print a copy of this article, right-click and select Print. In the Destination drop-down list, select a specific printer name or select Save as PDF. Then, click Save.

Note: Click the IQA IM Calculation Template file link to download and open the spreadsheet.

The high-level process and responsibilities for this migration is as follows:

Ensure Inventory is reconciled and balanced (Customer)
Ensure processes are ready to migrate (Customer)
Capture existing data (Customer)
Create upload files. (Customer)
1. Upload files to be created from Template include:
2. Additional Files that may be needed:
Remove inventories by importing OIM transactions to the OIM Object. (Customer or Accounting Seed (AS) Support)
Turn on Weighted-Average Cost methodology. Support will have to turn this on and once turned on, cannot be changed back to Standard Cost. (AS Support only)
Make updates required prior to re-adding inventories into the IIM Object. (Customer or AS Support)
Add inventories by importing the IIM transactions to the IIM Object. (Customer or AS Support)
Run reports to verify that the new inventory balances to the Pre-migration Inventory. (Customer)
Load purchase prices to Products. (Customer or AS Support)
Create a new Inventory Cost Tab. (Customer)
Create a new Purchase Price Tab. (Customer)
Update Page Layouts for new Weighted-Average Cost methodology. (Customer)
Provide AS Support Access to your Org ID. (Customer)

Important: AS Support must perform step 6. AS Support can perform the data imports (Steps 5,7,8 & 10) if requested. Open in a Case specifying which steps you would like AS Support to complete. Identify the Org ID, and give AS Support system admin access to the Org ID (instructions are at the end of this article). If you are requesting AS Support to perform any of the data import steps, attach the files to the case, and then, confirm the steps that you have completed.

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Reconcile the Physical Inventory to your Inventory Valuation on the General Ledger
Verify that Purchase Orders, Sales Orders and if using Orders & Inventory Manufacturing/Builds are all Either Fully Closed or Completely Open
Set up and Run Reports to Ensure all Existing Quantities and Details are Documented Prior to Switching over from Standard Cost (These can also be used to load the OIM and IIM templates)
Create Outbound Inventory Movements (OIM) and Inbound Inventory Movements (IIM) using the IQA IM Calculation Template to remove all existing inventories prior to switching over to weighted-average, to Balance the inventory movements for each IQA prior to switching over to weighted-average, and after switching over to weighted-average to update existing IQA with the default Ledger and re-add the inventories
Remove Inventories by Importing OIM Transactions to the OIM Object
Turn on Weighted-Average Cost Methodology
Make Updates Required prior to Re-adding Inventories into the IIM Object
Re-add Inventories by Importing the Step 12 IIM Transactions to the IIM Object
Run Reports to Verify that the New Inventory Balances to the Pre-migration Inventory
Load Purchase Prices to Products
Create a New Inventory Cost Tab
Create a New Purchase Price Tab
Update Page Layouts for the New Weighted-Average Cost Methodology
Grant AS Support Temporary System Administrator Access to your Salesforce Org

Detailed Process for Weighted-Average Cost Migration

1. Reconcile the Physical Inventory to your Inventory Valuation on the General Ledger

Perform this process 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:

Perform cycle counts by:
Reconcile the Inventory Balance. For more information, refer to the Report on and Reconcile Inventory article.
Determine the average cost for each product.
Note: Since the inventory cost variance has already been accounted for, the Weighted-Average Cost for each product should equal the Standard Cost for each product.
If Multi-ledger is currently enabled, all inventory is on one (1) ledger. Hibiscus adds Ledger to the Inventory dimension so you can now assign inventory to a specific ledger when it is reloaded. Keep this in mind as you go through the reconciliation process.

2. Verify that Purchase Orders, Sales Orders and if using Orders & Inventory Manufacturing/Builds are all Either Fully Closed or Completely Open

Purchase Orders must be either:
1. Fully received and have the payable generated and posted
  -OR-
2. Completely unreceived, with no payable generated.
  Note: A simple check is that Voucher Payable should be $0 when completed.

Sales Orders must be either:
1. Fully allocated and have the billing generated and posted
  -OR-
2. Be completely unallocated, with no related billings.
  Note: A simple check is that Voucher Payable should be $0 when completed.

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.

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3. Set up and Run Reports to Ensure all Existing Quantities and Details are Documented Prior to Switching over from Standard Cost (These can also be used to load the OIM and IIM templates)

The following reports are recommended so that all of the data elements are captured and can be exported for use in the templates
1. An Inventory Quantity Available (IQA), Cost & Total Value

The following are examples of the above recommended reports. Your reports can be customized for your specific situation.
1. An Inventory Quantity Available (IQA), Cost & Total Value
2. An IQA Detail Report
3. An IQA by Warehouse, Location & Product
4. If you have any serialized inventory products, a Serial Number report

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Purchase Price is a new way to store default prices for a product and will default to the Purchase Order Line as Unit Price. It is recommended that you upload Purchase Prices for all of your Products. In addition to the Product and Unit Price, you can also include these by Vendor and Currency.

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4. Create Outbound Inventory Movements (OIM) and Inbound Inventory Movements (IIM) using the IQA IM Calculation Template to remove all existing inventories prior to switching over to weighted-average, to Balance the inventory movements for each IQA prior to switching over to weighted-average, and after switching over to weighted-average to update existing IQA with the default Ledger and re-add the inventories

Create a Migration Clearing GL Account to keep the GL transactions isolated. For example, 1599-Migration Inventory.
Note: The Movement Date and Serial Number need to be TEXT format. The Movement date should be MM/DD/YYYY.
Note: The SF ID should be used for the IQA (Inventory Quantity Available), the Debit & Credit GL Accounts and the Ledger
Export IQAs using Dataloader/

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Update the IQA IM Calculation Template with the IQA Export.
Other possible updates & Templates.

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5. Remove Inventories by Importing OIM Transactions to the OIM Object

Once reviewed, steps 1 through 10 can be imported in order

IIMs are Inbound Inventory Movements
OIMs are Outbound Inventory Movements
After Steps 1 - 10 have been imported successfully, re-export the IQAs. Attach the new IQA to the Case to confirm that the inventory is ready to convert.

Important: Weighted-average will NOT be turned on with this final IQA export being provided.

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6. Turn on Weighted-Average Cost Methodology

Important: Remember that once turned on, Weighted-Average Cost cannot be changed back to Standard Cost.

7. Make Updates Required prior to Re-adding Inventories into the IIM Object

Update all Products that are Type = “Raw Material” to “Purchased.”
Update all IQA records to be explicitly set to the default Ledger (and relink Products if needed) via Step 11 import.
Load all new IQA records required for non-default ledgers.

8. Re-add Inventories by Importing the Step 12 IIM Transactions to the IIM Object

If using Salesforce DataLoader, the IIM mapping should look like the example screen below.
If using the Import Data Wizard, it should look like the example screen below.

Note: Click here to view the above image in full screen.

Note: Click here to view the above image in full screen.

Notes:

If you are using Multi-ledger you must put the Ledger on the inventory record to indicate which Ledger the Inventory Costs are on.
The Movement Date and Serial Number need to be TEXT format. The Movement date should be MM/DD/YYYY.
The SF ID should be used for the IQA (Inventory Quantity Available), the Debit & Credit GL Accounts, the Ledger, and Product.

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9. Run Reports to Verify that the New Inventory Balances to the Pre-migration Inventory

Important: These must balance before proceeding. Open a Case, if AS Support is needed to help with this investigation.

Run Trial Balance to verify that the Inventory amounts are correct.
Create and run an Inventory Costs report.
Create and run a Product IQA, Inventory Costs report.
1. Below is an example of Product IQA, Inventory Costs report -- Report Setup
  
  Note: Click here to view the above image in full screen.
2. Report
  
  Note: Click here to view the above image in full screen.

10. Load Purchase Prices to Products

As noted above, Purchase Price is a new way to store default prices for a product and will default to the Purchase Order Line as Unit Price. It is recommended that you upload Purchase Prices for all of your Products. In addition to the Product and Unit Price, you can also include these by Vendor and Currency.

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11. Create a New Inventory Cost Tab

An easy way to always have access to view the Inventory Cost is to create a new Tab. Following are the steps.

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12. Create a New Purchase Price Tab

Repeat the steps above to create a Purchase Price tab.

13. Update Page Layouts for the New Weighted-Average Cost Methodology

After migrating to Weighted-Average Cost, the page layouts for a number of objects will need to be updated. For more information, refer to the Edit Page Layout articles in the Installation section of the Knowledge Base.
Product Object
Sales Order Object
Purchase Order Object
Project Object
Inventory Quantity Available Object
All Inventory Movement Objects (Inbound IM, Outbound IM, Purchase Order IM & Sales order IM)

14. Grant AS Support Temporary System Administrator Access to your Salesforce Org

To grant AS Support temporary access at the System Administrator level to your Salesforce Organization (Org), perform the following:

Grant Access to Accounting Seed Support
Locate Your Org ID
Salesforce Classic UI
Salesforce Lightning UI:

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Title

Detailed Process for Migration to Weighted-Average Cost

URL Name

1111722934