Inventory Accounting

Changes to inventory are accounted with an inventory change transaction. When you move inventory, the quantity balance for the item is adjusted and the appropriate general ledger (GL) entries for the transaction are created. The net quantity indicates quantity moved — positive or negative — based on the inventory transaction type.

Inventory Changes and Inventory Transaction Types

The following table lists the inventory changes and inventory transaction types and the net effect on inventory.

User Action Inventory Change Inventory Transaction Type Increase (+) or Decrease (-)
Cycle Count: adjust inventory after a cycle count Cycle count Cycle Count + or -

Receiving Document: record receipt of goods

Receiving Workbench: Receive purchase orders

 Purchase Order Receipt Purchase Order Receipt +

Receiving Document: Void or Cancel

 Purchase Order Receipt Void - Purchase Order Receipt -
Purchase Order: Return to Vendor Purchase Order Return Purchase Order Return -
Receiving Document: Void or Cancel Purchase Order Return Void - Purchase Order Return +

Sales Order: Manage Picklist

 Sales Order Pick

Sales Order Pick

If consigned material: Transfer of Ownership

 _

Sales Order: Undo Pick Confirm

 Sales Order Pick

Sales Order Undo Pick (return to inventory)

 +

Shipment: Manage Delivery

 Sales Order Shipment Sales Order Shipment _

Shipment: Undo Shipment Confirmation

 Sales Order Shipment Sales Order Undo Shipment +

Transfer inventory from one location or facility to another without incurring shipping costs: Pick

 Transfer Order Pick

Transfer Order Pick

If consigned material: Transfer of Ownership

 _
Transfer inventory from one location or facility to another without incurring shipping costs: Undo Pick Transfer Order Pick

Transfer Order Undo Pick (return to inventory)

 +
Transfer inventory from one location or facility to another without incurring shipping costs: Ship Transfer Order Shipment Transfer Order Shipment _
Transfer inventory from one location or facility to another without incurring shipping costs: Undo Ship Transfer Order Shipment Transfer Order Undo Shipment +
Transfer inventory from one location or facility to another without incurring shipping costs: Receive Transfer Order Receipt Transfer Order Receipt +
Transfer inventory from one location or facility to another without incurring shipping costs: Void Transfer Order Receipt Transfer Order Void _
For a drop-ship order, the third-party supplier ships the goods to the customer, which means you do not receive or ship the goods, but you do have to generate an invoice to send to the customer. You can use a Logical Purchase Order Receipt and a Logical Sales Order Shipment to account for these transactions and generate an invoice. Logical PO Receipt Logical PO Receipt +
For a drop-ship order, the third-party supplier ships the goods to the customer, which means you do not receive or ship the goods, but you do have to generate an invoice to send to the customer. You can use a Logical Purchase Order Receipt and a Logical Sales Order Shipment to account for these transactions and generate an invoice. Logical Sales Order Shipment Logical Sales Order Shipment _
Work Order: Kit Work Order Kit

Work Order Component Issue

For consigned material: Transfer of Ownership

 _
Work Order: Dekit Work Order Dekit

Work Order Component Return

 +
Work Order: Complete

Work Order Completion:

Work Order Assembly Completion

Work Order Component Issue

Work Order By Product

 +
Work Order: Uncomplete

Work Order Uncomplete

Work Order Uncomplete

Work Order Component Return

Work Order By-Product Return

 

 _
Work Order: Scrap Components Work Order Scrap Component Work Order Scrap Component -
ClosedRecommended Accounting for Inventory Movement

When you move inventory, in addition to updating the quantities in inventory, the appropriate general ledger (GL) entries for the transactions are created. This section describes the recommended accounting across the different business areas.

Procurement

The following table describes the recommended accounting during the procurement process (purchase orders, purchase order receipts, purchase order returns, customer invoices and credit memos).

Procurement Recommended Accounting

Object: Receiving Document

Transaction Type: Purchase Order Receipt

Subtransaction Type: <Item Class Type>

DR: Receiving Inventory @ PO Price

CR: GRNI (Accrued Liability) @ PO Price

Void reverses the original accounting entry.

Object: Receiving Document

Transaction Type: Purchase Order Return

Subtransaction Type: <Item Class Type>

DR: GRNI (Accrued Liability) @ PO Price

CR: Receiving Inventory @ PO Price

Void reverses the original accounting entry.

Object: Inventory Change

Transaction Type: Purchase Order Receipt

Subtransaction Type: Purchase Order Receipt

DR: PPV @ PO Price (using amount reference)

CR: Receiving Inspection @ PO price (using amount reference)

DR: Inventory @ Standard Cost

CR: PPV @ Standard Cost

Object: Inventory Change

Transaction Type: Purchase Order Return

Subtransaction Type: Purchase Order Return

CR: PPV @ PO Price (using amount reference)

DR: Receiving Inspection @ PO price (using amount reference)

CR: Inventory @ Standard Cost

DR: PPV @ Standard Cost

Object: Inventory Change

Transaction Type: Void Purchase Order Receipt

Subtransaction Type: Void Purchase Order Receipt

CR: PPV @ PO Price (using amount reference)

DR: Receiving Inspection @ PO price (using amount reference)

CR: Inventory @ Standard Cost

Object: Inventory Change

Transaction Type: Void Purchase Order Return

Subtransaction Type: Void Purchase Order Return

DR: PPV @ PO Price (using amount reference)

CR: Receiving Inspection @ PO price (using amount reference)

DR: Inventory @ Standard Cost

CR: PPV @ Standard Cost

Object: AP Invoice

Transaction Type: Invoice

Subtransaction Type: (Item Class Type)

DR: GRNI (Accrued Liability) @ PO Price (using amount reference)

DR or CR: IPV (using amount reference)

CR: AP Liability @ Invoice Price

Object: AP Invoice

Transaction Type: Credit Memo

Subtransaction Type: (Item Class Type)

DR: AP Liability @ Invoice Price

CR: GRNI (Accrued Liability) @ PO Price (using amount reference)

DR or CR IPV (using amount reference)
ASN (Advanced Shipping Notification)

The following table describes the recommended accounting for ASNs during the procurement process.

Receiving Document Recommended Accounting

Transaction Type: In-Transit

Subtransaction Type: Receipt

DR: In-Transit Inventory @ PO Price

CR: CRNI (Accrued Liability) @ PO Price

Transaction Type: In-Transit

Subtransaction Type: Return

DR: GRNI (Accrued Liability) @ PO Price

CR: In-Transit Inventory @ PO Price

Transaction Type:  In-Transit Purchase Order Receipt

Subtransaction Type: <item class type>

DR: Receiving Inventory @ PO Price

CR: In-Transit Inventory @ PO Price
Sales Order

The following table describes the recommended accounting when fulfilling sales orders.

Inventory Change Recommended Accounting

Transaction Type: Sales Order Pick

Subtransaction Type: Sales Order Pick

DR: Inventory (Receiving Location) @ Standard Cost

CR: Inventory (Sending Location) @ Standard Cost

Object: Inventory Change

Transaction Type: Sales Order Pick

Subtransaction Type: Sales Order Undo Pick

DR: Inventory (Sending Location) @ Standard Cost

CR: Inventory (Receiving Location) @ Standard Cost

Object: Inventory Change

Transaction Type: Sales Order Shipment

Subtransaction Type: Sales Order Shipment

DR: Cost of Goods Sold @ Standard Cost

CR: Inventory @ Standard Cost

Object: Inventory Change

Transaction Type: Sales Order Shipment

Subtransaction Type: Sales Order Undo Shipment

DR: Inventory @ Standard Cost

CR:  Cost of Goods Sold @ Standard Cost

Transaction Type: Transfer of Ownership

Subtransaction Type: Transfer of Ownership

DR: Inventory @ Standard Cost

CR: PPV @ Standard Cost

DR: PPV @ PO Price

CR: GRNI @ PO Price (use amount reference)
Transfer Orders

The following table describes the recommended accounting for inventory transfers from a shipping facility.

Inventory Change Recommended Accounting

Transaction Type: Transfer Order Pick

Subtransaction Type: Transfer Order Pick

DR: Inventory (Receiving Location) @ Standard Cost

CR: Inventory (Sending Location) @ Standard Cost

Transaction Type: Transfer Order Pick

Subtransaction Type: Transfer Order Undo Pick

DR: Inventory (Sending Location) @ Standard Cost

CR: Inventory (Receiving Location) @ Standard Cost

Transaction Type: Transfer Order Shipment

Subtransaction Type: Transfer Order Shipment

DR: Inter Facility Receivable @ Standard Cost

CR: Inventory @ Standard Cost

Transaction Type: Transfer Order Shipment

Subtransaction Type: Transfer Order Undo Shipment

DR: Inventory @ Standard Cost

CR:  Inter Facility Receivable @ Standard Cost

Transaction Type: Transfer of Ownership

Subtransaction Type: Transfer of Ownership

DR: Inventory @ Standard Cost

CR: PPV @ Standard Cost

DR: PPV @ Purchase Order Price

CR: GRNI @ Purchase Order Price (use amount reference)

The following table describes the recommended accounting when transferring inventory into a receiving facility.

Receiving Document Recommended Accounting

Transaction Type: In-Transit Transaction

Subtransaction Type: Receipt

DR: In-Transit Inventory @ Sending Facility Standard Cost

CR: Inter Facility Payable @ Sending Facility Standard Cost
Drop Ship

The following table describes the recommended accounting for drop ship sales orders.

Drop Ship Recommended Accounting

 Receiving Document

  • Transaction Type: Logical Purchase Order Receipt
  • Subtransaction Type: <Item Class Type>

DR: Drop Ship Clearing @ PO Price

CR: GRNI (Accrued Liability) @ PO Price

Inventory Change

  • Transaction Type: Logical Purchase Order Receipt
  • Subtransaction Type: Logical PO Receipt

DR: Drop Ship Inventory @ PO Price

CR: Drop Ship Clearing @ PO Price

 Inventory Change

  • Transaction Type: Logical Sales Order Shipment
  • Subtransaction Type: Logical Sales Order Shipment

DR: Cost of Goods Sold @ PO Price (using amount reference)

CR: Drop Ship Inventory @ PO Price (using amount reference)

 

 

_________________________________

To search the KnowledgeBase and documentation, ask a question, or log a case, please visit the Kenandy Community. To access our online training, visit the Kenandy Learning Center.

 

Version: Spring 2017