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Wildwood Canada BusinessVision Help

Reasons why the Inventory GL Account may not equal the Stock Status Summary

 
In theory, the GL Inventory control accounts should not differ from the Stock Status Summary. However, there are a number of reasons why discrepancies may arise.
  1. Scope: It is assumed that for the purposes of this discussion that we are not talking about discrepancies between the “real life” physical inventory in your warehouse and what is recorded in your BV inventory module. This is an entirely different issue, and is at the root of most inventory problems and discrepancies.
  2. Sell, receive, count the wrong inventory item in Sale Order, Purchase Order, Adjust Inventory, and Physical Inventory functions.
  3. Current vs Average Cost on Stock Status report: Be sure to print the Stock Status Summary report on the basis of Average Cost, NOT Current Cost. All postings to the GL are made using Average Cost. Unless of course you are using FIFO.
  4. Control: Technically, the Inventory GL Accounts are not “pure” control accounts, in that one can post directly to them at any time, outside of functions that affect Inventory. For example, you can post to them directly from Accounts Payable.
    This is different than the AR and AP control accounts, which cannot be directly posted to (except when you “unintegrate” the system).
    If you want the Inventory GL accounts to function as control accounts, then no entries should be made to them outside of the normal functioning of Purchase Order, Receipts, Warehouse Transfers, Sales Order, and Physical Inventory.
  5. On Hand Qty: The ability to directly modify the On Hand qty of all inventory items must be turned off. If one has migrated from an earlier version of BV, this may not be the case. There are two ways to turn this off, one more complete than the other.
  6. Full Integration: The System Setup switch, “Post Inventory Adjustments to GL” must be turned on. If it is off, then all Receipts made through the “truck icon” will not be posted to the GL, and neither will Physical Inventory adjustments.
  7. Variance Account: When considering the value of Inventory in the GL, do not count the Inventory Variance account, as this represents the “other half” of GL entries that adjust the Inventory GL accounts. It is customary to reallocate Inventory Variance to some other Account, such as COGS, or spoilage/breakage etc. at the end of the year. This account will normally fluctuate up and down in value. If it trends one way or another, then this indicates that something is wrong, usually with how people are using BV.
  8. Reports in Average vs Current Cost: Inventory value reports must be printed using Average Cost.
  9. Dates: When comparing the Stock Status Summary to the Inventory GL Accounts, it is important to compare the same dates. Keep in mind that the balances you see in the GL are always month-to-date balances. For example, the displayed balance of a GL account will always include all transactions for that entire month. So once you reached, for example, the 23rd of August, you will not be able to view the balance at, say, the 15th. (However, the GL Activity Report can show this.) But when viewing the GL Account on screen, or on a printed Trial Balance and Balance Sheet – these will always be month-to-date. And forward-dated transactions can muddy the waters as well.
  10. Multicurrency: Although Inventory is always carried in Base Currency, and entries are always made into it by the system, sometimes entries can find their way into a USD (or other currency) Inventory GL account for various reasons.
  11. Autopost: AutoPost should be turned on. If it is off, and users are able to edit journal entries, then entries to the Inventory GL Accounts can be changed during posting.
  12. Negatives: In past versions of BV occasionally there were issues when Average Cost and/or quantities went into negatives. These issues were supposed to have been fixed in v7.1. However, negatives can be an issue for any Costing system, in particular Average Costing. There is more than one approach to handling them. The approach that BV uses is oriented towards ensuring that the GL Inventory accounts are corrected once the inventory item returns to a positive quantity status and one or more items are then sold from that positive quantity.
  13. Close POs to AP: The System Setup switch “Close POs to AP” must be turned on, otherwise proper reconciliation of Vendor Invoices to POs is not necessarily taking place.
  14. Receiving non-stocked items on a PO when the Vendor’s default expense GL account is set to Inventory will create a discrepancy, as non-stocked items are not counted in the inventory module and thus not in the Stock Status reports.
  15. Vendor Default GL Acct: No Vendor should have an Inventory account as their default expense GL Account to ensure that no postings to Inventory GL Accounts occur outside of Purchase Order, Receipts, Warehouse Transfers, Sales Order, and Physical Inventory.
  16. Restore: If a partial restore of BV data files was improperly performed a discrepancy may occur.
  17. When assembling a BOM you can override the cost of the assembled item. BUT this cost differential will NOT be posted to the GL, even though it affects the cost of the finished goods.
  18. Sale of Non-stocked items: These will post as a CR to the Inventory GL Acct per Sales Dept 000, which is actually the GL Acct per Special Accounts. Non-Stocked items are by definition not in Inventory, therefore this could create a discrepancy in Inventory value between the GL and Inventory module.
  19. The opening balance is incorrect: The balance of GL accounts are all calculated starting with a hidden number for "Opening Balance Last Year". All balances for Last year, This Year, and Next Year periods are calculated based on that. If that Opening Balance number is incorrect, then the remainder of the balances will be incorrect.
  20. Unposted or partially posted GL entries: If the posting of a GL entry was interrupted by network problems, then the portion relating to the Inventory GL account may not have updated the balance of that account. Run the special Reorganize function to repost all GL journal entries.
  21. Network: Yes, there is always the usual "it’s the network" reason for discrepancies. Although this cause can be overused, this is nevertheless a very real cause of problems in any system. The "network" includes the workstations, cabling and hubs, and server. Many factors come into play here to potentially cause problems. The symptom in this case would be failure to update the Inventory quantities on hand during posting.
 
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