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Invoice microsoft for Production

[Music] hi guys welcome to yet another episode of microsoft erp business tutorial series in today's episode we are going to explore about the bomb journal within the inventory management module in microsoft dynamics 365. so i'm going to split the bomb journal topic into two parts and this is going to be the part one basic introduction to the bomb journal so in the part two we'll do a little more deep dive into the bomb journal so with that note let's get into the episode hi guys welcome back so in the past four to five episode we have been discussing about various journal entries that are available within the inventory management module like the movement journal the inventory adjustment journal the difference between movement general inventory adjustment journal the the transfer journal and in fact even the transfer order and difference between the transfer order and the transfer journal etc so the next topic here in this list as you can see is the bills of materials journal or we also call it as a bomb journey so normally the word the term bomb is used in relation with the production or the manufacturing process where normally the bombs are referred as the raw materials which combine together to form a finished goods whereas at the moment we are not discussing about the production control model but we are at the moment discussing about the supply chain module so in today's scenario we are going to view the builds of material journal in relation with a distributor so how will a distributor be using the bom journals which is available within the inventory management module we'll be starting our episode with this maybe i will give you an example scenario and then we'll try to understand why bomb journal and then we'll get started with a demo of the bomb journals that's going to be the agenda of today's episode so in order to give a quick introduction to the bomb journal let's uh get into ppt so um let's say we have a foreign manufacturer meaning the manufacturer is let's assume them to be in china and this particular manufacturer is a automotive spare part manufacturer so he manufactures spare parts automotive spare part components so he manufactures three different types of automotive spare parts which i named it as component 1 component 2 and component 3. whereas my company which is the adc motor which is the name of my legal entity this is a legal entity we have been using in all this episode for those who are watching my series from my episode one know this very well and this adc motor we are assuming it to be an automotive dealership or an importer so in this example i'm again going to assume my adc motor my legal entity as an automotive importer so my legal entity imports all of this part into the country my i'm also assuming that my importer is residing in the country india so he imports all this components from china to india and then he has an assembly shop and he assembles everything and creates one kit item and finally sells the kit item as a finished good so that's the business of my importer so my importer who actually assembles everything uh and combines them into a finished hit item so this particular importer is my legal entity adc motor and once he finishes the end product which is the kit item by consuming all those component 1 2 and 3 he then sells those kit item to my distributor or my retailer and my distributor and retailer buy this particular kit item in bulk and sell them to my end customer so my distributor that is my my uh dealer do have a parts department a parts counter so he sells this particular kit item separately the parts counter to the b2b customer or in some cases the distributor also uses that that particular kit item internally within the workshop department for performing the services for the car so this is the end to end process where um where we are basically importing the component assembling the end product into kit item and selling it to the customer so in order to do this process my importer is has decided to use bill of material journal to mark the consumption of all the component and then create a kit item in the system that is finished boots in the system because for my importer the process of assembly is very straightforward and my importer do not want to go through the process of production order to um you know consume the raw material and convert it into inventory because for my importer the assembly process is too simple and he do not want to involve the labor cost or material cost or the the routing concepts etc so in this scenario if the best fit for my importer is going to be the bomb journal so let's now try to actually create a bomb journal with a component one two and three and try to create a raw material sorry the finished good which is the kit item in behalf of our importer company using our legal entities and let's see how it uh how how we go okay so let's get into the demo section now so um so in order to uh create uh the bom bom journal we first need to have a journal name as usual it's a it's a normal rule has been following from the past six episode so get into the journal names inventory section these are the journals that we've already created so let's now create a bomb journal okay so just change it to bomb and it's done and now let's go to the inventory parameters and get into the journal section and mark this bomb journal over here as a default journal okay after doing this get into the build of material journal and click on new button and also choose your uh warehouse and click ok so the journal is created it's very straightforward process so now we need some items right so i forgot to take you through the item creation process so let's first try to you know create a finished goods item in the system so that we can use it in the bomb journal so let's go to the release product section and quickly create a kit item so i'm going to name it as kit and uh let's give a item group i'm going to use a fifo as my evaluation mod method and this is going to be my uh maybe raw mate uh the end finished good so let me consider it as vehicle item group and saturn warehouse and no tracking dimension and here i'm going to give the unit speeches and it's done so that is going to be the finished good um so let me quickly validate it to see if i have not missed any field yeah it's good and i'm going to also convert this into note check to avoid warning messages and i'm also going to go into the engineer tab and convert this into bomb which is already in the bomb and then i'm also going to turn this on the latest cost price because once my item is created the cost price will automatically come into the line if i turn turn this on uh i will talk about it later okay so these are some of the things that i wanted to do for the end finished product i already have component 2 and component 1. let me also create one more component item very quickly so let me create a component three and the item group oh sorry item model group is fifo again and item group this time is going to be the spare part because it's a component item and uh here is saturn warehouse and this is same here yeah so the component 3 is created validated okay but the thing is in order for us to be able to create our finished boot we should make sure that the component 1 2 and 3 are in stock so i know that component 1 and 2 are in stock so i have to increase the stock for the component three realistically i should be purchasing the stock but for the sake of creation of data i'm going to use the inventory adjustment journal to quickly boost the stock so just i'm going to use this warehouse and click ok say this one and that's going to be my component 3 and i'm going to purchase 100 of this for the cost price of 120 each and validate it and post it so the stock is increased for this particular item so now let's also quickly check the on hand inventory so the on hand inventory is for the site 1 and warehouse cs apply so let me just yeah so the component one is hundred component two is hundred component three is hundred and we do not have the stock of the main product because we still haven't started our production process that is our bomb journal so there's no stock of our kit item yet okay so that's the inventory stock so let's now go into the bomb journal and add line so you first need to click on the new button so that will automatically create a line in the system and by default the line the first line created in the system is not called as a bomb line because this checkbox is not checked so meaning the system by default assumes the first line to be the finished product okay that's why the bom line is not not checked but just in case if you are want to use a component to be added as a first item then you should make sure you check this checkbox manually okay so at this time since it's a first line i'm going to add my finish to good which is the key title okay which is that one um yeah so it's it's added there's no cost price yet in the system for this particular item and so it's it's zero so now i will be adding my component that will ultimately be consumed from the inventory uh so or i can even just click place the cursor here and press the down arrow so there will be a a line created automatically so i don't need to click on new so now i'm going to put it as a component one so this is the bom line which is your component and you see that the unit is automatically the system uh tags it has a negative quantity okay and here the cost price is zero even though the item has a cost price but still it displays a zero because the latest purchase price checkbox is not checked and in the manage cost tab there is no cost price displayed so that's why the cost place is not available again the concept is similar to that of a moment journal and the inventory adjustment journal even though the cost price is not appearing here the the inventory will be issued at the rate of the running average cost at the time of the issue okay so even though there is a cost price here or even though there's no cost price here ultimately system is only going to consider the running average cost of the item which will automatically taken at the time of posting okay so you don't need to worry about the cost even if this doesn't display in the line level so that's going to be your competent one so now i'm going to click on the down arrow again and i'm going to choose your component 2 which is that word and again it's going to be 10 so i'm going to consume i'm going to create 10 quantity of my kit item so for which i need 10 quantity of the component 1 and 10 quantity of the component 2 okay so let me oh sorry better that i press the down arrow so the line will be created at the bottom so let's go and add the component 3 and again 10 quantity of the component 3 in order for us to create 10 quantity of the key title so that's done and save it and we can now um do you think we can post it so but still if i post it there will be an error in the system very obvious error uh which is going to be the the posting profile error we all know that it's a new legal entity and we are configuring the legal entity bit by bit as and when we go into new topic we are doing the setup so still we haven't done any setup for the production related modules so there's no setup posting profile setups available for the bomb journal so let's first do that first let's first do it so um we need to go to the inventory management module and posting the posting profile setup for the bomb journal is in the production tab uh so what happens here is the inventory is getting consumed out and then finally the finished product is consumed inside the inventory so what happens is the cost the inventory cost of the raw materials is going out of the inventory that is if you are tagging an inventory account it is getting um accredited from your inventory account and finally the the finished product which is coming into your inventory will be you know debiting to your inventory account so so in order to perform it we need to tag a gl code relevant gl code in the relevant section so we have a manufactured cost which is the cost of your inventory cost of your finished product that is your kit item so we need to tag a relevant inventory account over here or whatever account that that is applicable for your business needs to be tagged here so i'm going to tag an inventory account here so normally we do it at the group level so for for the spare part item inventory account for the raw material item the inventory account but in this case uh i'm going to go go with all and i'm going to give my inventory account as this and that is will be uh the account that gets uh debited into the system that's going to be your cost of your finished good and similarly the cost of your raw materials needs to be credited out of your inventory so you need to also tag another gl account over here to mark that so in this example i will be using that account spare part so that's done okay so um this and this needs an account so we have marked it and save it and go out go back to your journal now just let's quickly try to validate it to see if everything is good yeah it's looking good so now let's go and post this particular journal and see what happens so it is successfully posted now so here if you check my uh my finished good item if i go into my inventory transactions and see you will see that it is considered as a purchase transaction and the reference is bom meaning it is not purchased through the purchase order but through the bomb journal and the inventory is increased by 10 quantity and that is going to be the cost price of the inventory okay so how did we get this cost price it is the the addition of the cost price of all the components okay we will we will see this in shortly likewise if you go and check the inventory transaction of your component the component here there is no cost price right um even though there is no cost per line level if you go within the transaction and check this is considered as a salt and the reference here is a bomb line because it is a it is a raw material that's getting issued that's sold consider assault and here you will see that the cost price is uh thousand hundred sorry thousand two hundred that's because per unit price that we have uh kept as 120 so 120 into 10 1200 okay so and similarly 1200 plus this is going to be another i think uh 1 300. so 1200 plus thousand three hundred plus this one we recently created this item it's another i think thousand two hundred so thousand two hundred plus thousand two hundred plus thousand three hundred it's going to give you the thousand sorry three thousand seven hundred okay so some of the cost price of all three is together forms this particular uh cost amount and the cost amount is displayed in the line level that's because if you check the the item if you remember we have checked the latest purchase price uh check box for that particular item in the managed cost section so this basically populates the latest purchase price per unit price of the item over here okay which is also available here in the cost objects section which is your average running average cost of the item so the same is populated also here under the managed cost section and from the managed cost section it is also getting populated here at the line level okay whereas for the remaining component we haven't turned on that parameter so there is no price available in the managed cost section and that's the reason at the line level no cost amount is getting populated but however there is a cost amount that is detected in the invented transactions level and also if you check this particular inventory transaction and if you go into the financial voucher you will find a financial voucher you will find that here is the uh the inventory account that we are tagged against the manufacturing cost in the posting profile so this account actually got debited and this three accounts that we have tagged against the cost of material consumed in the posting profile if you remember the same account that we have tagged and these are all are getting credited because they are moving out of the inventory and here are all you know expense accounts so don't need to mind about it they are just a control account if you sum them they they get just nullified the the total of all all of this expense account will lead you to zero so uh they are just a control account so these are the the main accounts that we have tagged in the posting profile under the production tab so that is the short summary and high level introduction to the bomb journal process and this is the exact scenario where the adc motors company should use the bomb journal where you want a straightforward method where you want to create a finished good item and also mark the consumption of all the raw material out of the inventory and you do not want to use the production order because that's too heavy and your process is too simple in such cases you prefer using the bomb journal so that's this is going to be your part one basic concepts of bomb journal so in the part two episode that is going to be our next episode where we will do a little more deep dive into the bomb journal and cover some more additional scenario related with the bomb journal see you in the next episode until then bye [Music]