Periodic Costing is activated by a control file setting. Once enabled, you can start on any first day of a GL calendar period. You must decide whether to just start after year end closing or any GL period during the fiscal year, as long as the first GL period upon which to start Periodic Costing has not been posted. Once the first month is closed, you cannot deactivate Periodic Costing.

Period Costing must not substitute for, overlap with, or conflict with current costing methods available in QAD EE, including standard, current, or simulation cost methods. Instead, Periodic Costing adds new methods of costing calculation that support legislations and business practices for different countries.

In general, customers have adopted standard costing before implementing Periodic Costing functionality. If you have adopted standard costing, you can continue to use standard costing plus Periodic Costing calculations; however, you should use the Periodic Costing adjustment mode; see Adjustment Mode.

Before implementing Periodic Costing, you must evaluate and recalculate all inventory and shop floor transactions (including COGS) according to the new accrued costing.

The system calculates and stores the periodic unit costs in both the base currency and the statutory currency so that inventory valuation and cost analysis can be done in both currencies any time.

When you use statutory currency for each Periodic Costing period, the system creates a cost set for both the base currency and the statutory currency.

Some companies require secondary currencies for local reporting or management purposes. For management purposes, you can use the company consolidation currency (base or statutory).

Some countries—for example, Brazil—require that the system use supplier invoice prices, not PO prices, at PO receipt for inventory valuation for periodic cost calculations. When you enable the supplier invoice functionality, the output displays all purchase orders that do not have matched invoices. In these countries, the period cannot be closed when the matching invoice is not available.

Periodic Costing does not work with certain features and functions of other QAD EE programs. Also, certain concepts, such as variances, are not recognized by Periodic Costing.

When you use standard cost plus adjustment, you can choose consolidated or detailed. Consolidate can yield better performance for the calculation and can simplify adjusting per transactions. However, the method can cause issues for PO and LA receipts and shop floor transactions with multiple variances.

In QAD applications, period costing omits the valuation of inventory transactions and uses the values from incoming and outgoing GL transactions from accounts payable and invoicing functions. Costs are expensed in the period in which they are incurred. Before Periodic Costing features, period costing was not commonly used for financial valuation because it required manual entry of transactions and did not take advantage of automatic entries created by the system.