Microsoft Dynamics 365 Business Central is multi-company, multi-currency and multi-language ERP software. But beyond that, it can serve many industries as it has modules for Distribution, Production-based, Project-based and Service-based industries. Today we are going to highlight three modules that allow you to track internal costing to suit your needs.

Three Methods of Costing in Microsoft Dynamics 365 Business Central

Production Orders

Production Orders are used for repetitive manufacturing where you know the expected inputs. Production is generally planned and cost around the work centers/machines used in the production. The product could be manufactured base on Make To Order or Make to Stock. Generally, the Revenue and Costs are recognized to the Income Statement as the product is shipped and is used in conjunction with the Sales Order module.


Jobs or Project Costing is better suited to one-off of very small repeatability of the work. The estimates can often be different for every Job. Production can usually be planned and cost around the worker. Almost always the production is Make to Order. Jobs can utilize one of 5 out of the box Revenue Recognition methods, including completed Contract or Percentage of Completion. As well as Time and Material Billing based on the costs plus Markups is available. Jobs can encapsulate the revenue and all costs into the user-definable Task structure.

Service Orders

Service Orders are best suited when:

1.      You are providing installation, commissioning, after-sale Service or repair or Warranty work.

2.      You don’t always know what the final cost or potential sales recover might be.

The module comes with a Service Contract page to keep track of overall agreements. A Service Order page can track open requests, and Service Items can allow for transactions that don’t affect Inventory as well as Standard Service Codes. It will enable you to report time and parts used, movement of Customers parts back to your facility for inspection, repair or replace and track progress back to suppliers or back to the Customer.

Each of the modules can be used in conjunction with the 5 out of the box Inventory Cost Methods. FIFO, LIFO, Average, Specific and Standard and each can be enhanced by the use of the Material Planning tools within Microsoft Dynamics Business Central.

Join us on September 4th when we will demonstrate some of the features of the three methods of costing live in the Business Central.

After graduating from Brock University with an Honors Bachelors of Business Administration Gordon started a 25 year career in Accounting and Finance, progressing from Payables and Job Costing to Corporate Controller positions.

Gordon’s experience spans many Industries including Automotive, Plastic Injection Molds, and includes Project and Job shops as well as continuous/standard processing environments and service Industry. Gordon has had the privilege to work throughout Ontario, Los Angeles, and Vancouver and returned again to Ontario in 2011.  In each industry and position Gordon had significant responsibilities for systems implementation comma development and maintenance.