Master Records > Inventory > Create Inventory Adjustment

Creating inventory item adjustments in AccountMate Enterprise is crucial in recording inventory shrinkage, spoilage and other inventory changes that do not result from purchase or sales transactions. If the Purchase Order module is not activated, inventory item adjustments are useful in recording receipts from vendors.

Inventory adjustments are recorded using the Inventory Adjustment function available in the Sales Order, Accounts Receivable and Inventory Control modules.

To create inventory item adjustments, perform the following steps:

1.Access the Inventory Adjustment function from the Adjustment group in the Transactions main menu from the following modules: Inventory Control, Sales Order, Accounts Receivable, and Purchase Order.

2.To specify the affected warehouse for this inventory item adjustment, enter in the Warehouse field the warehouse previously set up for this inventory item. Alternatively, click the Lookup button beside the Warehouse field to search for the warehouse. In the Search window, locate the warehouse code; then, click OK to select. Note that the Warehouse field is required to proceed with the adjustment process.

3.Enter in the Item # field the inventory item number that you want to create an adjustment transaction. Click the Lookup button to search the item in the Search window.

If the inventory item you entered is a special item (e.i., item with specifications, lot-controlled), a Specifications field is displayed where you can enter the item specification that you want to adjust.

Note: If you have the Inventory Control module, have activated the Use Barcode Scanner feature in the IC Module Setup, you can use a barcode scanner to enter the item in the Item # field. A Barcode field will be displayed above the Item # field and you can scan SKU or UPC barcode IDs to enter the item #.

4.Accept or amend the date in the Adjustment Date field. This will be the effective date of this adjustment transaction. The default date is the current system date. To amend the date, you may manually enter the new date in the field. Alternatively, you may click the Calendar button to select the date from the calendar window. You may also click the Fiscal Period Table Lookup button to view the fiscal periods.

5.To easily identify and describe the nature of this inventory item adjustment transaction, enter a short explanation or description in the Remarks field. The value entered in this field will be displayed in the Inventory Adjustment Report.

6.If you want this adjustment to generate a journal entry for transfer to the General Ledger module when you perform the Period-End Closing or Post Data to GL functions, mark the Post to GL checkbox; then, accept or amend the default GL account IDs displayed in the following fields:

oInventory

This field displays for your reference the GL account ID of this inventory item account as set up in the Inventory field of the GL Accounts tab in its maintenance record.

oAdjustment

This field is enabled after marking the Post to GL checkbox in this function. Enter in this field the GL Account ID that will match the type or nature of adjustment you are making that corresponds with the GL account ID entered in the Inventory field of this function window. The default GL Account ID from this field comes from the Inventory Adjustments field in the Warehouse Maintenance for the warehouse used in the adjustment transaction.

Note: If you marked the Post to GL checkbox, you must enter a GL account ID in the Adjustment field; otherwise, the system will not allow you to save this transaction.

7.In the Type area, select from these options the type of adjustment you want to create:

oQuantity Adjustment

Select this option to adjust the inventory item's quantity. This option also allows you to adjust the item's unit cost.

oUnit Cost Adjustment

Select this option to change the average unit cost for the on-hand quantity of the inventory item in the selected warehouse.

oTotal Cost Adjustment

Select this option if you want to increase or decrease the total value of an inventory item in the selected warehouse.

Note: The fields and options available in the succeeding section depends on the adjustment type you select in this area.

8.To create the actual quantity adjustment, perform the following steps:

8.1. To specify the affected bin of your desired particular warehouse, enter in the Bin field the particular bin. Alternatively, you may click the List box button to display all available bins in the selected warehouse; then, click the bin to select.

8.2. In the Adjust Quantity By field, enter the desired quantity you want to adjust for the inventory item. Enter a positive value (+) to increase the item quantity or enter a value preceded by a minus sign (-) to decrease the item quantity. You can decrease an item's quantity with the same unit cost. If the unit cost of the inventory item with decreased quantity has a different unit cost, please proceed to the separate discussion below on how to decrease inventory item quantity with a different unit cost.

8.3. The Stock U of M field shows the selected inventory item's stock unit of measurement. This field is read only.

8.4. To specify the cost of the increase in inventory item quantity, enter in the Unit Cost field the corresponding unit cost. The system will automatically compute the new total cost for this inventory item.

Note: The Unit Cost field becomes enabled only if the inventory item quantity is increased. You can NOT adjust the item's unit cost if the adjustment is to decrease the item quantity.

8.5. If you are making a negative quantity adjustment to a serialized or lot-controlled inventory item, a grid appears showing the item's serial numbers and other relevant information. Enter in the Adjust Quantity By column the quantity for each corresponding serial number that you want to adjust. The rest of the fields in the grid are for reference only.

9.To amend the average unit cost for all inventory item quantity (if Unit Cost Adjustment option is selected in the Type area), enter the desired unit cost for all inventory item quantities in the New Cost field. The system will automatically compute the New Total Cost for this inventory item.

10.To increase or decrease the total value of an inventory item (if Total Cost Adjustment option is selected in the Type area), enter the desired amount that will be added to or deducted from the total value amount of the inventory item in the Adjust Total Cost By field. If the adjustment is a deduction, verify that the adjustment amount in this field is preceded by a minus sign (-). The system will automatically compute the New Total Cost for this inventory item.

11.To save your adjustment, click the Save button in the function toolbar; otherwise, click Cancel to abort transaction.

How to Decrease Inventory Item Quantity with a Different Unit Cost

The system will not allow you to adjust the unit cost and total value of an inventory once you make a negative adjustment quantity for an inventory item. The system will automatically disable the Unit Cost field in the Quantity Adjustment type transaction. If the decreased quantity has a different unit cost, you must perform the following steps:

1.Perform Steps #1 to #7 outlined in the discussion above.

2.To specify the affected bin of the selected warehouse, enter in the Bin field the particular bin. Alternatively, you may click the List box button to display all available bins in the selected warehouse; then, click the bin to select.

3.In the Adjust Quantity By field, enter the quantity you want to deduct from this inventory item. Verify that the quantity in this field is preceded by a minus sign (-). Take note of the default system’s unit cost used in valuing the negative quantity adjustment. This unit cost will be the basis for computing the adjustment amount to reflect the actual unit cost of this negative quantity adjustment.

4.Click the Save button in the function toolbar to save transaction.

5.Access the Inventory Adjustment function again; then, select Total Cost Adjustment type and enter the same inventory item in the Item # field.

6.Manually compute the total adjustment amount to record the actual value of the negative quantity adjustment by comparing the system’s unit cost used in the previous recording of the negative quantity adjustment against the actual unit cost for this negative quantity adjustment. Multiply the resulting difference with the total quantity previously deducted from this inventory item.

7.To adjust the total value of this inventory item, enter the adjustment amount computed in Step #6 in the Adjust Total Cost By field. If the adjustment is a deduction, verify that the adjustment amount in this field is preceded by a minus sign (-). The system will automatically compute the new total value for this inventory item.

Q. I posted an adjustment for an inventory item's quantity using the Inventory Adjustment function. However, when I generate the GL Transfer Report, I cannot see any entries made by the system for the adjustment I made. What did I miss?

A. You must mark the Post to GL checkbox of the Inventory Adjustment function. Otherwise, the system will not create a GL entry for the adjustment you posted and you have to manually post a journal entry in the General Ledger module to reflect the adjustment you made.

Create Inventory Adjustment

Create Inventory Adjustment

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