Opening Inventory

aps_mbs

Hi all,

If we post opening Inventory through Item Journal as Positive adj, we will be hitting two G/L acc as Inventory Acc and Inventory Adj Acc
My question is do we have to nullfy the Inventory Adj Acc ?

If not what is the effect of Inventory Adj Acc in preperation of Balance sheet.

the question might be very silly...but for me, i am not clear as far as costion or accounting is concerned..

Please expalin...


regards,
APS

AdamRoue

Your booking in of the stock will hit the inventory account, when you are recreating the opening balances for the GL altogether you will key the inventory valuer to the inventory adjustment account, this will set the balance to zero and allow you to create a journal for the opening balances and also see your inventory value.

SobyOne

Just make sure your inventory adjustment matches your inventory value from the G/L Conversion. NAV _will_ pull the inventory value you put into the system originally from the inventory system TO THE PENNY!

You will need to reverse out the duplicate inventory value found on the G/L and you should balance against the inventory adjustment account from the adjustment.

aps_mbs

Thanx fot the reply.....

just to confirm that we are on the same line of undertanding.....

What I am doing is that .....post the opening balance directly to the chart of accounts through Journal vouchers (excluding Cust, Vend and Bank) including Inventory.

Post the Opening Inventory (item wise for quantity & value) and reverse the earlier entry to show the Inventory figures only...

Pl let me know if I am wrong
regards,
APS

Malajlo

Procedure from 120th century :

Open new GL account out of standard GL list (i.e. ITEM-OPEN).
Create new Gen. Bus. Posting Group (i.e. INV-OPEN), with
Purchase Acc set ITEM-OPEN.

Set this new created Gen. Bus. Posting Group in journal batch settings.
After you post Item journal, make a negative posting between your openning entry on Inventory Account and ITEM-OPEN account.

This way you have openning entries on Inventory Account and "nulled" entries on ITEM-OPEN GL Acc.

The same procedure is for posting openning customer/vendor/FA entries.

idiot

There are a few ways of doing this as seen from the previous posts.
Some clients do not want "special accounts" to be used for opening balances; they want their COA to be as "clean" as possible.
Some clients "go LIVE" with different modules at different times.

So far I found the cleanest & easiest way to deal with opening is to point the Inventory & Inventory Adjustment accounts in the Posting Setups to the same account. The debit will cancel out the credit.

aps_mbs

thanx for the reply....

I hope the things i have explained are correct and I am followin the right practice....
Thanx to all
Aps

Alex_Chow

This topic is explained in detail here:
http://dynamicsuser.net/blogs/alexchow/ ... lance.aspx

David_Singleton

idiot wrote:

...So far I found the cleanest & easiest way to deal with opening is to point the Inventory & Inventory Adjustment accounts in the Posting Setups to the same account. The debit will cancel out the credit.

=D>

I always recommend clients to do it this way, and they generally do. for sure its the cleanest solution.

Alex_Chow

David Singleton wrote:

idiot wrote:

...So far I found the cleanest & easiest way to deal with opening is to point the Inventory & Inventory Adjustment accounts in the Posting Setups to the same account. The debit will cancel out the credit.

=D>

I always recommend clients to do it this way, and they generally do. for sure its the cleanest solution.

Not really. What if your client's G/L balance does not match the inventory valuation? Then what are you going to do? Adjust the inventory account? And plant the seed to let the customer think that you can adjust the inventory accont using general journals?

idiot

Alex Chow wrote:

Not really. What if your client's G/L balance does not match the inventory valuation? Then what are you going to do? Adjust the inventory account? And plant the seed to let the customer think that you can adjust the inventory accont using general journals?

That is not consultant's problem. It is chargeable for troubleshooting of inaccurate data provided. If the client insist on using garbage, it's additional revenue for the consultant subsequently to troubleshoot.

It is the responsibility of the client to provide approved figures to be used as opening balances.
:P

aps_mbs

The entry I have been passing are as follows

1) Item Journal (Opening Inventory- Quantity and Value)

Inventory A/C ...................Dr
To Inventory Adj Acc....................Cr

2) G/L Journal (Transfering the Individual G/L Account Balance)

Again Inventory G/L Acc, CUST, VEND and all other accounts are posted with the values as provided by the client (in Trial BAlance). The difference is posted to Retained earnings account. All Debit are equal to CREDIT.


3) G/L Journal

Inventory Adj Acc....................Dr
To Inventory Acc..................Cr.

Alex_Chow

idiot wrote:

Alex Chow wrote:

Not really. What if your client's G/L balance does not match the inventory valuation? Then what are you going to do? Adjust the inventory account? And plant the seed to let the customer think that you can adjust the inventory accont using general journals?

That is not consultant's problem. It is chargeable for troubleshooting of inaccurate data provided. If the client insist on using garbage, it's additional revenue for the consultant subsequently to troubleshoot.

It is the responsibility of the client to provide approved figures to be used as opening balances.
:P

This is probably where we differ. I believe being a consultant includes raising awareness to the customer to realize problems where they may not be aware of.

If we are just receivers of data and giving outputs, then what better are we than a calculator?

idiot

Alex Chow wrote:

This is probably where we differ. I believe being a consultant includes raising awareness to the customer to realize problems where they may not be aware of.

If we are just receivers of data and giving outputs, then what better are we than a calculator?

I think you're mistaken. We do raise the awareness. However sometimes there is the time & budget constraint & customers need time to rectify the error. This is where we provide additional services to help the customers.

The point here is we cannot stop the customer from using wrong data, rather than what kind of services or awareness we provide to customers.
The customer is always right. The boss is always right. Money is always right.

David_Singleton

idiot wrote:

...
The customer is always right. The boss is always right. Money is always right.

Damn just as we were starting to agree, you say somethign silly like that.

The customer is rarely right. If the boss was always right, then why would he employ us. And money, well that will be gone out the window when we have to go back and fix things.

I fully understand what you are saying, and I know the pressure that we can sometimes be under, but we need to tell the Customer and The Boss that they are wrong, and think more about the money not losing money in the future rather than the short term money we might make now.

idiot

David Singleton wrote:

idiot wrote:

...
The customer is always right. The boss is always right. Money is always right.

Damn just as we were starting to agree, you say somethign silly like that.

The customer is rarely right. If the boss was always right, then why would he employ us. And money, well that will be gone out the window when we have to go back and fix things.

I fully understand what you are saying, and I know the pressure that we can sometimes be under, but we need to tell the Customer and The Boss that they are wrong, and think more about the money not losing money in the future rather than the short term money we might make now.

Hey I said before I wish you're my boss O:)
I can understand the boss' views. The implications of not bringing the project to a successful conclusion can be very intimidating. Sometimes advises are given but often they're not accepted due to circumstances.
A project gone live on time with inaccurate data (can always troubleshoot) is more valuable than a delayed project which might never go live (client lose interest, no chance to troubleshoot).

David_Singleton

idiot wrote:

Hey I said before I wish you're my boss O:)

I will take that as a compliment, thank you

Alex_Chow

idiot wrote:

Alex Chow wrote:

This is probably where we differ. I believe being a consultant includes raising awareness to the customer to realize problems where they may not be aware of.

If we are just receivers of data and giving outputs, then what better are we than a calculator?

I think you're mistaken. We do raise the awareness. However sometimes there is the time & budget constraint & customers need time to rectify the error. This is where we provide additional services to help the customers.

The point here is we cannot stop the customer from using wrong data, rather than what kind of services or awareness we provide to customers.
The customer is always right. The boss is always right. Money is always right.

Yes, but the original response that was posted was to "just do it". Nothing about raising awareness of future reconcilation headache with inventory.

We give advice. If the advice is not taken, it's not our problem. But this is a separate issue rather than raising the awareness in the first place.