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doyle
12-05-2002, 04:20 PM
This is not a specific Classic question: Since I have been using PCA (July of 1993) I have never been able to fully understand or satisfactorily reconcile the difference between my Inventory Valuation found in the Inventory module and the GL Inventory Account.

It seems to me the only difference should be the late vendor material invoices. That is we have received goods and the Inv Module is acknowledging this fact, but the invoice has not arrived from the vendor and therefore GL doesn't acknowledge an inventory increase until the invoice is posted. (We are updating GL from all modules except Fixed Assets.)

As a small manufacturer we turn our inventory very quickly. Most items are brought in JIT. It's not uncommon for us to turn inventory on most items 3 times a month. This is why I am very suspicious of the costing buckets used in the Inventory Module. They are limited to 12 and start averaging after 12 purchasing sessions.

My big question for someone out there is --- If the Inventory module is receiving data from AP and Purchase Order and is dispensing data to AR and Invoicing, how is it that my GL transfers never match the detail in the Inventory module? These numbers are off by less than $1,000 per month on a $50,000 avg physical inventory on most months. This last month it was off nearly $3,500. does anyone have a good method for reconciling the Inv Module to the GL Acct?

My last comment on this, and I would appreciate some feedback, is during my attempt to reconcile the Inventory Module to the GL Inventory Account, I found a AP/Purchase Order transaction where the detail was reported to GL, along with transactions above and below it, yet this item did not appear in the Inventory Module. It was obviously a large part of my discrepency.

And I'm sorry, one last comment, I can't stand this quirkie piece of crap that Peachtree says is an accounting system. The Classic version is a freak. I've been using this software heavily since '93, most things get better with age...If it wasn't such a pain to switch and retrain my people, I'd dump it in a heart beat. (Thanks for letting me get that off my chest.)

Thanks again.

Doyle

chikamic
12-06-2002, 08:30 AM
Boy, you have got a lot going on here, but I will try to address most of it.

First of all, when using FIFO and LIFO costing types, PCA records the quantity received, the date received, and the unit cost in separate costing buckets. Inventory supplies 12 different costing buckets to store this information. When the 12 buckets are full the next receipt will be placed in a bucket with a 0 quantity, if available. If quantities other than zero exist for all 12 buckets averaging will occur.

Due to the fact that the GL transfer process is COMPLETELY MANUAL, you must make sure that you LIST GL transfers and check them for accuracy before creating. In addition, that if you have been using PCA for a while that you probably need to do some disk maintenance as well. The more generations you retain the more likely you are to sustain data damage. I would recommend using the programs under the utilities disk maintenance program and then running recover data on all modules that you use.

doyle
12-06-2002, 02:07 PM
Thanks for your prompt reply. I pretty well had an understanding of the costing bucket structure and operation. What has been unclear to me is since my costing is almost always current, (I turn it quick so the last purchase price should almost always be my current cost), why is it that the activity for the month as represented by the transfers to GL does not match even remotely the activity that is shown in the Inventory module? I know that the late invoices are a factor and we can identify and correct this problem. Beyond that, the difference is a mystery.

I don't know if you've ever tried to audit line by line from Inventory to GL, but it's nearly impossible in our case. The transfers to GL are lumped by PO not Department. I would have to find all of the Dept data in Inventory, add it and match it to the Transferred Data in GL. We have a couple of vendors that report to multiple (6 to 8) different departments in Inventory.

My dream come true would be if there was a linking field common between the Inventory data and the GL transfer data. I could print a report to a file and massage it in excel.

Lastly, you do have a very good point on the data files. I probably should try to reduce them. We have noticed a couple of weird costing errors. A recent problem brought to my attention was a costing bucket for a component part that had the costing information from another component part. It would have gone by unnoticed except the component unit price is very unique and is used quite often. I would have thought it an entry error, but other assemblies using the same components were correct. Additionally, the assembly items were assembled in the same entry session.

Again, my feeling along has been that PCA is kind of strung together. I feel the "pseudo-windows" version called Classic is even more piece meal. Many times when you are developing a system or program and opt for a huge leap in technology, it's best to start with fresh architecture. I think PT should have started fresh with this revision.

Well enough of that...again thanks for your help.

Doyle

chikamic
12-06-2002, 02:34 PM
To revalue your inventory items, you will need to run the Recover Data program from the Utilities menu for Inventory. After selecting All Files, the program will display another options box, choose Revalue Items. This program will recalculate by multiplying each of the 12 bucket's numbers of units by its unit cost. All resulting figures are summed to get the correct value.

Try this to see if your valuation looks any better, BACK UP the data first.

To tell the truth, I have never really had a PCA customer complain about inventory as it is historically one of the stronger modules. I will do a little research and see what I can come up with.

doyle
12-06-2002, 03:35 PM
We have performed the Recovery Process in the past, but don't do it routinely. When I have done a recovery in the past it changes the costing only negligbly. Should the Recovery Process be considered prior to every closing?

As for my specific problems with PCA Inventory, I'll give you a little more background on my company. We are a small manufacturer of cabinetry and restaurant furniture. The bulk of our inventory activity centers around restaurant table tops. We manufacture and ship roughly 1,000 tops a month to a number of national chains.

These tops are assembled from component parts like particle board, phenolic backer, contact adhesive, high pressure laminate or veneer, and edging of either laminate, hardwood, flexible vinyl edge or aluminum edge. The assemblies are very accurate as we have audited for yield loss many times over the years. The components are brought in several times per week. Lead time on an assembly is about 2 to 3 weeks.

The other side of my business is residential cabinetry. In this case most of the activity is as a resaler. Although, we have the capability of manufacturing this product, it is brought in from 2 outside sources specific for our customer. There is customarily no stock. Due to the enormous number of SKU's from both cabinet manufacturers, we use LOT's in a department called CAB in our Inventory system. It's basically unique by using the job number as the new item number. These CABLOT's are unique to the job and all components, whether they are $1.45 each or $4,500 will go into the same CABLOT for that job. This doesn't seem to be a problem as we do not invoice and release inventory until the job is complete. Yes, the unit cost can be a little strange if you have an adjustment, but we have been watching it very closely if we have an adjustment or return. This rarely happens though.

We take a physical inventory at the end of every month. That is when the fun starts. Due to the nature of our business, we have to adjust for actual yield loss during the month. Hardwood comes in from our vendor in random widths and lengths. Particle board may have better yield due to the size tops that were manufactured that month. As mentioned earlier, this is built into our assemblies and if we notice a problem on an item we assess it and adjust the Inventory assembly if necessary. When we make the adjustment in Inventory we make the same manual entry in GL using the Inventory GL Account and the Cost of Goods Sold for the specific department where the activity occurred. We make sure all Transfer Jourals are received in GL and we then look at the Ending Balance of GL Inventory against the Inventory Valuation in the Inventory Module. And that is what is off. I will make a final adjustment around $500 without searching for a problem. Anything more, I go hunting.

This month I tried to see if there was a way to reconcile the two numbers by dumping a report from both sources into an excel file. But, as I mentioned earlier, it's impossible to corrulate the data. If there was a common receipt date being reported to both GL and Inventory I could summarize by date and try to segment the problem by receipt dates. I know there is a user defined field that may be able to be used. I will look and see if our job number can be used.

We selected PCA originally for the Job Costing function. After initially examining the software we elected not to use this module. Do you have any opinions of this module? I have wanted to play with it and see if it could be of use for our manufacturing process.

Thanks again.