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Physical Inventory Reconciliation Physical Inventory Reconciliation Report |
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Physical Inventory Reconciliation Physical Inventory Reconciliation Report |
The Physical Inventory Reconciliation Report is the final step in the Physical Inventory process. The reconciliation report will show the final quantities and adjustments that need to be made to the General Ledger. The quantities will be changed by the system when the update mode is performed. The adjustment to the General Ledger will require a manual financial transaction using General Journal Entry on the GLE menu.
Report Setup
| 1. | Program ID. Enter the program ID of the program to be reconciled. If the program ID is not known, enter "?" to display the Active Programs window. Select the program by entering the sequence number to the left of the program ID. |
| 2. | Report Options. The report options on the reconciliation report are: |
| A. | Report Only. The report only option enables the printing of a report that shows what the various adjustments to inventory and the General Ledger will be without actually changing anything. This is an audit report only. If option "1" is selected, three asterisks will display to the left of the report option selected. |
| B. | Report with Optional Update. This is the same report as the Report Only option with the exception that this report can be updated. When this report is updated, the inventory On Hand quantities will be changed to the quantities posted in Physical Inventory Posting. If option "2" is selected, three asterisks will display to the left of the option selected. |
| 3. | Beginning Inventory Date. If option "2" is selected, the system will prompt for the entry of the beginning inventory date. Enter the date that the inventory was counted. It is not uncommon for the inventory to be counted on one day and the reconciliation report printed and updated a few days later. |
| 4. | Is Information Correct? If the information entered is correct, enter "Y". The system will display the Verify Update Option window. READ THIS INFORMATION CAREFULLY! If the information is correct, enter "YES. The window gives the option of changing the beginning inventory date by entering "C" and entering the new date. Once "YES" is entered into this prompt, the system will reflect the new inventory On Hand quantities as entered in Physical Inventory Posting. If changes to the quantities are required after entering "YES", the PIS process must be repeated. |
The report prints the following information:
| 1. | Item Number and Description. |
| 2. | Original. This column displays the On Hand and BQOH quantities BEFORE posing the inventory counts. |
| 3. | Average Cost. This is the average cost loaded into the F5=Inventory option in Inventory Item Maintenance on the IFM menu. |
| 4. | On Hand Value. This is a calculated figure of Average Cost multiplied by Actual On Hand. |
| 5. | Actual On Hand. This is the quantities posted in Physical Inventory Posting. |
| 6. | Open Shipped. The system takes into account open orders that have shipping posted to the order. To account for the New BQOH, the system must increase the Actual On Hand so that when the order is invoiced and the register is updated, the BQOH for the order is reduced in the system without causing an out of balance situation. The On Hand may have been shipped but the BQOH will not be "shipped" until the order is billed to the customer and the register is updated. |
| 7. | Open Received. As the system accounts for the open selling orders with shipping posted, the system also accounts for open purchasing orders where receiving has been posted to the order. The On Hand reflects the receiving but the BQOH will not be "received" until the purchasing order has been vouched and the register is updated. |
| 8. | New BQOH. This is a calculated figure based on Actual On Hand plus Open Shipped less Open Received. |
| 9. | BQOH Value. This is a calculated figure based on Average Cost multiplied by the New BQOH. It is the total of this column that should equal the General Ledger Inventory account. |
| 10. | Report Totals. The report totals will display the total of the Actual On Hand, Total POSITIVE and NEGATIVE BQOH value, Net BQOH value and the variance. |
A. Total POSITIVE BQOH Value. This is the total of all positive BQOH values in the BQOH Value column.
B. Total NEGATIVE BQOH Value. This is the total of all negative BQOH values in the BQOH Value column.
C. Net BQOH Value. This is the positive BQOH less the negative BQOH.
D. Balance of the G/L Account. This is the total of the General Ledger based on the BQOH before posting the counts.
E. Variance. This a calculated figure based on Balance of G/L Account less New BQOH Value. This is the amount of the adjustment required to the General Ledger Inventory account. Enter a Manual Journal Entry to adjust the G/L.
NOTE: It is suggested that an Inventory Adjustment account be set up to accept the other side of the Journal Entry. If the variance is a negative amount, the Journal Entry will be a Debit to Inventory and a Credit to the account set up to accept the other side of the entry. If the variance is a positive amount, the entry to Inventory will be a credit.
