| |

Inventory Periods in Business Central: The One Setting That Can Save Your Month-End Close

ByStephanie E. Clark

Inventory Costing in Business Central – Part 7

Inventory Periods: The Month-End Control You Didn’t Know You Needed

Lately, I’ve been helping a couple of post–go-live clients who were deep in inventory chaos—costing issues, unexpected value entries, and reports that didn’t match reality. In both cases, they weren’t using inventory periods in Business Central.

It showed.

When you don’t close inventory periods, you leave the door wide open for prior-period adjustments, late entries, and cost updates that muddy the waters long after the month is over. That’s not just an annoyance—it’s a risk to your reporting accuracy and audit trail.

I know some consultants have started advising clients not to use inventory periods because they can be “inconvenient.” I strongly disagree. They’re not just useful—they’re essential.

Let me walk you through what inventory periods actually do, how to set them up, and why they’re one of the simplest ways to get better control over your month-end process.

What Are Inventory Periods in Business Central?

Inventory periods control whether inventory transactions—like receipts, shipments, adjustments, and cost changes—can be posted into a specific date range.

Once you close an inventory period, Business Central prevents any new entries or cost changes from being posted into that time period. This protects your item ledger and value entries from being altered after the fact.

You can still adjust costs for older transactions—but Business Central will post the value entry effect into the current period, not the closed one.

How to Set Up Inventory Periods

Setting them up is easy and takes just a few clicks:

  1. Search for “Inventory Periods” in the global search.
  2. Click + New and define the Starting Date and Ending Date for your period.
  3. Optionally, use the Create Inventory Periods function to generate multiple months at once.
  4. When you’re ready to close the period, highlight it and select Close Period in the ribbon.

That’s it. From that point forward, no inventory transactions or backdated changes can hit that closed period.

Quick Tip: Inventory periods while separate from Accounting Periods, typically follow the same structure.

What Inventory Periods Actually Do

When an inventory period is closed:

  • Item Ledger Entries can’t be posted with dates inside that period.
  • Value Entries tied to historical item ledger entries will still be created (when running Adjust Cost), but the value date will be the current open period.
  • Any manual inventory adjustments must be posted into the open period—no backdating.

This is crucial for maintaining consistency between your subledger and general ledger. When inventory periods are open indefinitely, you run the risk of changes hitting past periods after financials are finalized—causing confusion and reconciliation nightmares.

Why I Always Recommend Inventory Periods for Month-End

I’ll be honest—when I walk into a new client and they’re not using inventory periods, it’s almost always a red flag. It usually means I’m about to spend a few hours unraveling cost issues that somehow “just showed up” from three months ago. I’ve seen it all: negative inventory, wild swings in COGS, and audit trails that make no sense.

Inventory periods are a simple but powerful way to prevent that mess. They give structure to your month-end process and protect your financials from late adjustments that can throw off reports long after the month is closed.

Here’s why I believe they’re non-negotiable:

  • They lock down the past. Once an inventory period is closed, users can’t backdate transactions or post inventory adjustments into that period. That protects your inventory valuation, your COGS, and your audit trail from being altered after the books are closed.
  • They shift cleanup to the right place. If there’s a mistake or late invoice that comes in, the adjustment flows into the current period—not retroactively into last quarter’s numbers. That keeps your reporting consistent and much easier to reconcile.
  • They give you clarity. When something’s off, you know where to look—the open period. Not in April, May, and June. Just July. And when you’re under the gun to close, that level of control is gold.
  • They play nice with Adjust Cost. The Adjust Cost – Item Entries process will still fix historical costs as needed, but it won’t post the value entry into a closed period. It respects the inventory period and posts the financial effect in the current period. That’s exactly what you want.

Now, I know what some users are thinking: “Inventory periods make it harder to clean things up.” Yes—and that’s the point. It should take intention to change past data. If you’re constantly needing to adjust prior periods, the real issue isn’t inventory periods—it’s that your processes upstream need work. You can’t keep using the wrong tool just because it lets you clean up the mess afterward.

I’d rather have my clients frustrated once, when they hit a closed period and realize they need to fix something differently—than deal with the recurring chaos that comes from leaving things wide open.

So for month-end? Here’s what I walk every client through:

  1. Finish all open transactions—shipments, receipts, adjustments.
  2. Run Adjust Cost – Item Entries. Always.
  3. Review inventory valuation reports and confirm accuracy.
  4. Close the inventory period. That’s your lock.
  5. Then, and only then, close the financial period.

It’s a simple discipline, but it changes everything. It reduces reconciliation time, protects your historical data, and makes your financial reports way more trustworthy.

I’ve yet to meet a controller who regretted using inventory periods once they got used to them. But I’ve met plenty who regretted not using them sooner.

Final Thoughts: Don’t Skip the Lock

Skipping inventory periods might seem like a shortcut, but it’s one that will cost you in the long run. If you’re running inventory and want trustworthy reporting, clean subledgers, and a smoother close, use inventory periods. Train your team on them. Build them into your monthly checklist.

They’re not a burden—they’re insurance.

More Inventory Wisdom in This Series

This article is part of my ongoing Inventory Posting Series for Business Central. Be sure to check out:

We’ve also got a new Dimension series going.

Like what you’re learning? Subscribe to Dynamics Power Play for more in-depth, real-world Business Central guidance. No fluff—just the stuff that makes your system (and month-end) run better.

Discover more from Dynamics Power Play

Subscribe to get the latest posts sent to your email.

Similar Posts

Leave a Reply