Expected cost Business Central teams see on receipts and shipments

What expected cost Business Central uses means

Say you post a purchase receipt without the invoice. The goods are on the shelf, but the final price is not confirmed. Business Central then creates a value entry using the cost on the purchase order line. It stores that figure in the Cost Amount (Expected) field.

Once you post the invoice, the expected amount reverses. The invoiced amount goes into Cost Amount (Actual). If the vendor charged a different price, the actual figure simply replaces the estimate. You need not correct anything by hand, as long as you post receipts from the order.

The Expected Cost Posting to G/L setting

In Inventory Setup there is a field called Expected Cost Posting to G/L. With it off, expected cost lives only in the inventory subledger. The general ledger sees nothing until the invoice. With it on, each receipt and shipment also posts to interim accounts. So the balance sheet shows goods received not invoiced.

Switching it on suits companies with long gaps between receipt and invoice. It also suits auditors who want an accrual for uninvoiced receipts at each period end. Same-day invoicers often leave it off. Decide early, because turning it on later only affects documents you post from that point.

Interim accounts for expected cost Business Central needs

Expected cost posting uses its own set of accounts, so estimates never mix with invoiced values. Inventory Posting Setup holds Inventory Account (Interim). General Posting Setup holds Invt. Accrual Acc. (Interim) for purchases and COGS Account (Interim) for sales. Fill these in for each combination you use.

A receipt debits the interim inventory account and credits the interim accrual account. Then the invoice reverses both and posts to the real inventory and payables accounts. If a combination is missing, the receipt stops with a posting setup error. So test one purchase and one sale for each posting group in a sandbox before you go live.

Reconciling expected cost Business Central holds at period end

The Inventory Valuation report has an Include Expected Cost option. Run it with the option on. The expected column should then agree with the interim inventory account. The Inventory to G/L Reconcile report breaks the same figures into received not invoiced and shipped not invoiced.

Old balances in the interim accounts usually point to receipts that nobody invoiced. Often the vendor invoice was entered as a separate document, not from the order. Find them by filtering purchase lines on quantity received not invoiced. Then invoice them properly, or undo the receipt if the goods went back.

Mistakes that distort expected cost in Business Central

The most frequent problem is a purchase order with no price, or a placeholder price, on the line. The receipt then posts an expected cost of zero. So margin on anything shipped before the invoice looks far too good. Make the direct unit cost a required check before anyone posts a receipt.

Another mistake is forgetting that item charges such as freight arrive on the invoice. They are never part of the expected figure. Cost adjustment then corrects earlier shipments. If the interim balances in your company no longer make sense, our consultants can trace them back entry by entry.

Questions about expected cost Business Central users ask

Is expected cost recorded if the G/L setting is off?

Yes. Business Central always writes the expected amount to value entries in the inventory subledger. The setting only controls whether that amount also posts to interim accounts in the general ledger. Valuation reports can include the expected figure either way. So expected cost Business Central tracks never disappears when the setting is off.

What happens when the invoice price differs from the order?

The expected value entry is reversed in full, and a new entry posts with the invoiced amount. The cost adjustment batch job then corrects outbound entries that already used the estimate. So cost of goods sold ends up reflecting the real invoice. Run the batch job before you read margin reports, or the old estimate may still show.

Can I turn on Expected Cost Posting to G/L later?

You can, but it applies to new postings. For receipts and shipments you already posted and still have not invoiced, run Post Inventory Cost to G/L. It creates the interim entries for them. Test the switch in a sandbox copy first. Then pick a quiet moment in the period, so your auditors can follow the change easily.

Does expected cost apply to production orders?

Yes. Output posted on a released production order is valued at expected cost until you finish the order. With the setting on, that value sits in the WIP account. Finishing the order then converts it to actual cost on the produced item. So watch your open production orders when you check interim balances at period end.

Why is my interim accrual account never zero?

It holds the value of everything received and not yet invoiced, so a balance is normal. It only signals a problem when old receipts stay in it. List uninvoiced receipt lines by posting date and chase the oldest ones first. That keeps expected cost Business Central reports show clean and easy to explain.

Related expected cost Business Central guides

Expected cost Business Central handles is one piece of how inventory value is built. These pages cover the costing methods around it, the purchasing process that feeds it and the close that depends on it. Read them next, so each receipt, each invoice and each period end line up with your accounts. For the product detail, see Design details: expected cost posting on Microsoft Learn.