How to fix a discrepancy between Item Ledger and G/L

idealsceneprod

Hi everybody,

I'm working at an end user, but I am a developer and am curious to hear your feedback -- how should we fix this? I have asked my local partner, but wanted to get other ideas to compare to what they will say (haven't heard back from them).

We got an issue with a large discrepancy between our Item Ledger and the G/L because they’ve not been intentionally using the Item Ledger – using G/L journals directly, for instance – but the sales are coming out of inventory, along with purchases.

Here’s the deal:

1. They have not really been using the Item Ledger, and not running the Post Inventory Cost to G/L, etc.
2. All “inventory adjustments” have been made at the G/L journal level, so, the G/L is correct, but the item ledger is all screwy.
3. I ran a phys. inventory journal in a TEST database, and some of the accounts were out of balance by $11M
4. Is it possible to balance the Item Ledger and the G/L without impacting the G/L? Like, maybe disabling the code that posts to the G/L? I really don’t know how to get this done. Is there a better alternative?
5. We are trying to go live with invoicing out of NAV (at present we’re invoicing from another application), but need to have this resolved before we do.
6. We are going live with a new donor management system in November, and would like to go live with invoicing out of NAV no later than October.
7. At present, invoices are done in an in-house system (in old FoxPro, text interface), and then they get imported into NAV to update the G/L – inventory ledger is ignored.
8. We developed some XMLports to import files coming from the old system, and the new donor management system, to create Sales Orders in NAV (and to automatically post/ship them) – this is the core of our invoicing system.
9. Said sales orders are then posted manually.
10. Anyway, I hope I’m not confusing the issue, but we need to solve this discrepancy without impacting the G/L, and we need an estimate to get it done. Once we sign the Change of R, I can give you a copy of the .bak file so you can see what I’m talking about, and I can walk you through the details.


Thanks a lot,
Val

bbrown

The first advice I will give you is stop thinking about this as a development problem. This is an accounting problem. Approach it as such.

1. Close all open inventory transactions.

2. Clear any negative inventory

3. Conduct a physical inventory and adjust as needed

4. Run Adjust Cost

5. Balance the GL to Inventory


Done - No development needed.

idealsceneprod

I think the problem is that the G/L adjustment would be really high, and accounting would prefer to not make such an adjustment on the G/L side, and would instead of the item sub-ledger, if at all possible.

DenSter

+1 for bbrown's suggestion. Also, start using NAV properly and run the item adjustments (pos/neg adjustments, reclass, phys. inventory, etcetera) through the Item journals, and process sales/purchases through sales/purchasing functionality. Depending on your setup, all your accounting should follow.

bbrown

Yes, accounting prefers not to make the adjustment because then they'd have to explain it. They'd prefer it to be buried deeper in the system.

Don't own their problem. The adjustment is what it is. They are in this position due to not having proper system processes and controls. Bring the inventory in-sync and make the adjustments. It's a one-tiem explanation to the auditors (hopefully).

idealsceneprod

I hear ya. That was my original suggestion to them. I think they're coming around.