Microsoft Dynamics 365 Enterprise Edition - Financial Management - Third Edition

Financial update

The financial update represents the invoice posting, either for a purchase order or a sales order. The sales order invoice only has an effect on sales revenue and cost of goods sold, while, on the other hand, the purchase order invoice affects the inventory cost if there are changes in purchase price, be it an increase or a decrease.

The default mechanism of the financial update for purchase orders in Microsoft Dynamics 365 for Finance and Operations is that the financial update dominates the physical update in order to allocate the final item addition cost that will be reflected in the inventory. The physical update can be considered as an estimated cost, and the final cost is reflected in the purchase order invoice that ...