1. Validate all receiving against vouchers.  If you receive $100 worth of product plus a $10 freight charge, the voucher should be reflective of what happened in receiving.  For example, if you choose the option to factor freight into the cost during receiving, you should voucher the entire $110 to Inventory.  On the other hand, if you do not factor freight into the warehouse cost during receiving, then you should properly disburse the voucher $100 to Inventory, $10 to Freight Expense.  Discounts are another issue, if you have a $100 receiving with a 10% volume discount and you enter a discount amount during receiving, then be sure to only voucher $90 to Inventory.

2. Is your QOH correct?  If not, why? 

1. Are counter people selling the wrong parts or not on file parts accidentally?  Run Non-Inventory Items Sold Report in the POS Reports Menu.
2. Do you have your caselot breakdown part numbers set up with correct standard packs and units of measure in the proper order? Check in Inventory Entry.
3. Do you have orders on hold?  Orders on hold have already been downcounted from QOH.  Clean them up or account for them in your comparison.  Use the Hold Order Report to find them, located in the POS Order Reports Menu. Did you create a hold order on a new part number then later enter the part number in inventory entry? If that hold order is deleted later, then inventory is upcounted.

3. Make sure receiving and AP are in sync with each other.  There should be a correlating voucher for every receiving.  If not, you will need to adjust your figures as you compare the GL to the Inventory Value Report.

4. Custom inventory part numbers (mixes) carry a cost that is approximate.  The actual usage of your components will have a value that is different from the cost of these mixes.  Hence, your value report will vary from your GL value due to this discrepancy.  If you are not currently handling costs from component usage separately from your normal postings of invoices to General Ledger, please call for a separate document on properly handling this discrepancy.  Remember, since mixes are never received, the average cost (warehouse cost) is never updated, and must be addressed when price changes occur.

5. Check a General Ledger Detail report for postings other than Vouchers, Invoices, and In Store Use Entries that affect Inventory value.  Make sure these were valid postings.

6. Make sure all journals are posted.  Sometimes the obvious can be overlooked.

7. Check QOH Tracking and Costs and Prices Tracking to verify discrepancies. This will help track down every change part by part to QOH and Costs.

See additional pages for a listing of processes that affect the General Ledger and/or QOH.

Inventory-Related Procedures that Affect GL

Posted POS Invoices: Credits inventory at average (W/H) cost for sales, Debits inventory for credits. Check A/R Setup for actual accounts affected in fields 8, 9, and 10.  Consignment orders may or may not affect the GL depending on the setups found in POS Defaults and Comments, field 46, and A/R Setup, field 16.  Transfer invoices will credit the source inventory, and debit the destination inventory. All applicable inventory accounts discussed here will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Transfer Purchase Orders: Source inventory is credited, Destination inventory is debited at average cost from the source location.  The inventory account will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Receiving: If integrated using the Uninvoiced Receiving account, inventory is debited at received cost.  Check Receiving Setup, fields 1, 4, and 6 for this feature.  The inventory account will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Return to Vendor: (1999 Release and later) If integrated using setups found in Return Merchandise Setup, the account number placed in field 2, is credited when posting the return to vendor. This acount will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers). New feature to Unpost Returns would another option to keep an eye on.

Inventory Entry: Manual changes to QOH or WH Cost will debit or credit inventory at average cost (depending if you raise or lower your QOH or Cost).  To see if this feature is turned on, check Inventory Setup, field 8.  The inventory account will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Change QOH Entry: Manual changes to QOH debit or credit inventory at average cost (depending if you raise or lower your QOH). To see if this feature is turned on, check Inventory Setup, field 10.  The inventory account will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Posted In Store Use entries: Credits inventory at average cost. The inventory account will be overridden by part numbers setup with specific GL Accounts in Inventory Entry (option G for General Ledger Account numbers).

Vouchers: Typically, inventory is debited for the invoiced amount, unless you are using the Uninvoiced Receiving account.  See above information on handling discounts properly during voucher and receiving entry.

Inventory-Related Procedures that Do Not Affect GL

POS Invoices: Items are downcounted during part number entry into the order.  While the order is unfinalized (on hold) or unposted, there is no affect on GL inventory. When hold orders are deleted, QOH is up counted, which raises inventory value at current average cost. If Consignments are not set to post (see previous page), they do not affect GL inventory.  Transfer invoices immediately downcount source location during order entry, and upcount destination location when finalized.

Posted Component Use Entry: Since the cost of the end product is credited from Point of Sale, posting component usage does not affect the GL.

Manual changes to QOH, whether through Inventory Entry or Change QOH program will not affect the GL unless setup to do so.  See above for more information.

Make Kits: These will downcount the components, and upcount the Kit part numbers.  Average cost is used from the components to recalculate a new average cost for the Kit part number in question.

Case-Lot Breakdown: Used by several different programs, breakdown occurs when a larger unit of measure is broken down into smaller units of measure.  Average cost is recalculated on the smaller unit.

Case-Lot Breakup: Only done when posting scanned QOH.  Does not recalculate average cost.

Zero QOH: Often done prior to performing physical inventory unless setup to do so. See above for more information.

Post Scanned QOH: Usually done after clearing (zeroing) QOH unless setup to do so. See above for more information.

Return to Vendor: Once posted will downcount inventory but not hit unless setup to do so.