Dynamics 365: Resolving Update Conflicts with Standard & Moving Average Costing

Table of Contents

Symptoms¶

Posting documents such as inventory journals, purchase order invoices, or sales order invoices in parallel is a common practice in Dynamics 365 Finance and Operations. This approach is utilized to enhance system scalability and overall processing performance, allowing businesses to handle high volumes of transactions efficiently. However, when using specific inventory valuation methods, this concurrent processing can sometimes lead to unexpected errors and prevent some documents from being successfully posted. A frequent issue encountered is an error message indicating an “update conflict.” This problem is particularly relevant when the inventory valuation method configured for the items involved is either Standard cost or Moving average.

These two methods are classified as perpetual costing methods. A key characteristic of perpetual costing is that the final cost of goods sold or inventory value is determined and recorded in the general ledger at the precise moment each inventory transaction (like a sale or purchase receipt) is posted. This real-time calculation and update require the system to access and modify inventory dimension data (such as site, warehouse, batch, or serial number) and associated cost layers concurrently. When multiple posting processes attempt to update the same inventory dimension combination simultaneously, a conflict can arise because one process might try to read data that another is in the process of writing or has just changed unexpectedly, leading to a data inconsistency error.

The specific error message users encounter can vary slightly depending on the costing method in use. If you are leveraging the Moving average method, a typical error message you might see is related to the calculation of the average cost during the posting process. This message often indicates that the system calculated an inventory value that does not align with its expectations after accounting for proportional expenses or other cost components. An example of such an error message is:

Inventory value xx.xx is not expected after the proportional expense calculation

Conversely, if your system is configured to use the Standard cost method, the conflict often manifests as a discrepancy between the expected standard cost and the actual financial inventory value after a transaction attempts to update it. The system expects the financial value per unit for a standard cost item to align precisely with its defined standard cost, plus any permissible variances posted separately. When concurrent updates cause a momentary or persistent misalignment during the posting process, the system flags this as an error to maintain data integrity. A representative error message for this scenario is:

The standard cost does not match with the financial inventory value after the update. Value = xx.xx, Qty = yy.yy, Standard cost = zz.zz

These errors interrupt the automated flow of document posting, potentially causing delays in critical business processes such as shipping goods, invoicing customers, or receiving inventory. Resolving these conflicts often requires manual intervention to identify the failed documents and attempt re-posting, adding administrative overhead and reducing the efficiency gains sought through parallel processing.

Workaround¶

While Microsoft actively investigates and works on providing a permanent solution within Dynamics 365 Finance and Operations to mitigate these update conflicts, businesses experiencing these issues with Standard cost or Moving average valuation methods need immediate strategies to minimize their impact. The following workarounds are interim measures designed to help avoid or reduce the frequency of these errors, allowing operations to proceed more smoothly until a definitive fix is released. It’s important to note that these workarounds might involve trade-offs, primarily affecting the degree of parallelism achievable during peak transaction times. Implementing the most effective workaround often requires analyzing the specific circumstances under which the errors occur in your environment, such as the items involved, the types of documents being posted, and the volume of concurrent transactions.

Understanding the Technical Basis of Conflicts¶

To effectively apply workarounds, it’s helpful to understand the underlying technical challenge. Perpetual costing methods require atomic updates to inventory quantities and financial values, typically stored in tables like InventSum. When multiple processes post transactions for the same item and the same set of inventory dimensions (e.g., Site, Warehouse, Location, Batch, Serial Number) concurrently, they contend for exclusive access to the corresponding records in InventSum and related tables. Database management systems use locking mechanisms to prevent data corruption in such scenarios. However, if the application logic (Dynamics 365) does not manage these concurrent requests in a way that avoids deadlocks or update race conditions, the system might throw a conflict error to protect data integrity rather than allowing potentially incorrect inventory costs or quantities to be recorded. Moving Average is particularly susceptible because each receipt transaction changes the average cost for all subsequent issues from that dimension combination, making concurrent receipts or issues highly likely to conflict if not serialized correctly. Standard Cost, while less volatile in cost calculation, still requires updates to financial inventory value based on the standard cost, and conflicts can arise if quantity and value updates for the same dimension combination are attempted simultaneously by multiple processes.

Strategy 1: Reducing Parallelism for High-Conflict Scenarios¶

One of the most direct ways to reduce update conflicts is to limit the degree of parallelism for transactions involving items or inventory dimensions known to frequently cause conflicts. This can be achieved by adjusting how batch jobs are configured for posting various documents.

• Identify High-Conflict Items/Dimensions: Analyze past error logs and transaction history to pinpoint the items (Item numbers), item groups, or specific inventory dimension combinations (e.g., a particular warehouse or batch number) that appear most often in the update conflict error messages. These are your “hot spots” or contention points.
• Segment Batch Processing: Instead of posting all documents of a certain type (like purchase invoices) in one large, highly parallel batch job, segment the processing based on the identified hot spots.
  • Process high-conflict items/groups separately: Create dedicated batch tasks for posting documents related to these specific items or groups. Configure these tasks to run with a lower degree of parallelism (e.g., run sequentially with only 1 thread) or schedule them during off-peak hours.
  • Partitioning by Inventory Dimension: If conflicts are tied to specific warehouses or sites, configure batch jobs to process documents warehouse by warehouse or site by site. This ensures that concurrent processes are less likely to contend for the exact same inventory records. D365 batch framework often allows partitioning batch tasks based on query ranges (e.g., InventDim.WMSLocationId, InventDim.W DaSiteId).
• Adjust Task Bundle Size: For some posting processes, D365 groups multiple transactions into “tasks” or “bundles” within a batch job. Reducing the size of these bundles or the number of tasks running concurrently can decrease the likelihood of conflict, although it may increase the overall processing time for the batch job.
• Sequential Processing: In extreme cases for critical, high-volume items, consider processing documents (like sales order picking lists or purchase order product receipts) related to those specific items entirely sequentially. While this sacrifices performance for those items, it can eliminate conflicts.

Implementing this strategy requires careful monitoring and balancing the need for throughput with the need to avoid errors. It’s an iterative process where you adjust parallelism, monitor results, and refine your batch configurations.

Strategy 2: Optimizing System Configuration and Processes¶

Beyond adjusting batch jobs, other system-level factors can contribute to or exacerbate update conflicts.

• Database Indexing: Ensure that database indexes on key inventory tables (InventSum, InventTrans, InventDim, InventDimCombination) and related financial tables (GeneralJournalEntry, GeneralJournalAccountEntry) are optimized and regularly maintained. Suboptimal indexing can lead to slower data retrieval and longer-held locks, increasing the window for conflicts to occur during concurrent updates. Consult with a database administrator familiar with Dynamics 365’s data model.
• Database Locking: Understand the database locking behavior. While you typically don’t directly control database locks from within D365 application code, system configuration and transaction design influence how locks are acquired and released. High database load or specific query patterns might increase contention.
• Review Customizations and Integrations: Custom code or third-party integrations that interact with inventory posting processes can sometimes introduce their own concurrency issues or hold locks for excessive periods. Review any custom solutions touching inventory transactions for potential bottlenecks or non-optimized database interactions.
• Consider System Resources: Ensure that your Dynamics 365 environment and underlying database server have sufficient resources (CPU, memory, disk I/O). Resource contention at the system level can slow down transaction processing, leading to longer lock durations and a higher chance of conflicts.

Strategy 3: Analyzing Specific Transaction Patterns¶

Sometimes, conflicts aren’t just about volume and parallelism but also about the types of transactions hitting the same inventory simultaneously.

• Identify Conflicting Transaction Types: Are conflicts more likely when sales order packing slips and purchase order product receipts for the same item/warehouse are posted at the same time? Or is it concurrent movements within the warehouse using inventory journals? Understanding the specific combination of document types causing issues can help tailor workaround strategies.
• Review Business Processes: Are there business processes that inherently require simultaneous updates to the same inventory? For example, a fast-moving consumer goods (FMCG) warehouse might receive a new batch of an item while simultaneously picking and shipping existing stock of the same item from the same location. Can these processes be slightly staggered or managed in a way that reduces direct overlap in system posting?
• Leverage D365 Features: Explore if specific D365 features can bundle related operations. For instance, using directed picking and put-away might consolidate inventory movements within fewer, more controlled transactions compared to manual journal entries.

Strategy 4: Temporary Measures and Monitoring¶

While implementing more structured workarounds, keep these immediate steps in mind:

• Manual Re-posting: Failed documents due to update conflicts often need to be manually re-posted after the initial batch job finishes. Implement a process to quickly identify and re-post these documents to minimize delays.
• Off-Peak Processing: Schedule large or potentially conflict-prone batch jobs (like posting end-of-day sales invoices or receiving large purchase orders) to run during off-peak hours when system load and concurrency are lower.
• Enhanced Monitoring: Implement detailed monitoring of batch jobs and system logs to quickly detect update conflicts and identify the transactions, items, and dimensions involved. This data is crucial for refining the long-term workaround strategy.

Considerations for Costing Methods¶

While the workarounds apply to both Standard Cost and Moving Average, the underlying reasons for conflicts can differ slightly, which might influence the best approach.

• Moving Average: The core calculation involves dividing the total value by the total quantity after each receipt. Concurrent receipts or issues against the same inventory dimension combination are highly likely to conflict because each transaction changes the denominator (quantity) and numerator (value) that subsequent transactions rely on for their calculation at the moment of posting. Reducing parallelism for high-volume receiving or shipping locations/batches is often key here.
• Standard Cost: The cost per unit is fixed. Conflicts are less about recalculating the average and more about the system trying to update the quantity and value simultaneously for the same inventory record. If a transaction attempts to update the quantity and value of a dimension combination, and another transaction is concurrently doing the same, a conflict can occur. Variances are posted separately, reducing some conflict points compared to Moving Average, but the core inventory updates remain a contention point.

Both methods are perpetual and rely on real-time updates to InventSum, making this table and related dimension combinations the primary source of contention during high-volume parallel processing.

Potential for Future Improvements¶

Keep an eye on official Microsoft release notes and updates for Dynamics 365 Finance and Operations. Microsoft continuously works on improving the performance and concurrency handling of key processes like inventory posting. A future platform update or hotfix specifically addressing concurrency issues in perpetual costing methods may eventually provide a more robust, system-level solution, potentially reducing the need for manual workarounds. Engaging with Microsoft support and providing detailed information about the conflicts you experience can also help prioritize fixes.

Implementing a combination of these strategies, focusing on the areas of your business that generate the most conflicts, can significantly reduce the frequency of update errors and improve the reliability of your inventory posting processes in Dynamics 365 Finance and Operations while using Standard cost or Moving average valuation.

Have you experienced these update conflicts in your Dynamics 365 environment? What workarounds have you found most effective in mitigating these issues? Share your experiences and tips in the comments below!