Suggested by Ahmed Fathy Khattab Elsayed – New
Description
Currently, when using moving average costing in Dynamics 365 Supply Chain Management, applying markup percentage for intercompany (IC) pricing only works if the on-hand value is added to the receiving warehouse.
However, this behavior does not comply with accounting requirements, as the full cost must land in the external COGS on the original sales order. This creates a gap between operational setup and financial compliance.
Problem Statement
- Using markup percentage for IC pricing under moving average can lead to incorrect cost allocation.
- The full cost is not reflected in external COGS, violating accounting standards.
- Additionally, item sales tax group for charges does not follow the item’s tax group, making the solution less feasible.
Suggested Improvement
Introduce a system enhancement that:
- Ensures markup percentage for IC pricing under moving average complies with accounting requirements by correctly posting full cost to external COGS.
- Aligns item sales tax group for charges with the item’s tax group for consistency.
- Provides clear warnings or validation messages when users configure markup percentage with moving average costing.
Reference
Current documentation suggests using charges for IC profit calculation:
“You can also use charges to add a profit to an intercompany sales order by defining the charge as an intercompany percentage…”
Recommendation: Add a caution note in documentation and system prompts when moving average is used with markup percentage.
Business Impact
- Prevents compliance issues with external COGS.
- Reduces manual adjustments and audit risks.
- Improves reliability of intercompany pricing and tax handling.