Questions Track specific inventory after issue from warehouse

Hi Levan,

Thanks for the post.

Is this "inventory" for internal use or is it something that will be sold to customers? It sounds to me like it's used internally, but I'm not 100% sure.

If it's going to be used internally, then I would think that you should expense it when it's acquired, since the useful life is less than a year, rather than carrying it on the Balance Sheet.

Are you subject to IFRS (International Financial Reporting Standards) or is it another set of Accounting standards?

Hi Tim,

Thank you for your reply.

Actually, at the moment of purchase it is not always identified it will be sold to customer or will be used for internal purposes. If it is sold to customer, it is clear how it should be handled, but if it is used for internal purposes, I should decrease (credit) Inventory Account and recognize (debit) Cogs/expense account, but at the same time I should continue track it for managerial reporting purposes, for example Personal Protective Equipment (PPE), i am interested how many of PPE I have actually out of warehouse, who it owns and etc., while this info is not relevant for regular inventory such as A4 papers. But mostly this kind of inventory are used for internal usage and it is known at the moment of purchase. 

Regarding treatment, I should track it with IFRS and local standards, but difference between this two is just offset account, if with IFRS I should recognize just expense, with local standard, I should account it on offset account.

So, to summarize, my question is: what are the best practices in Acumatica, should I use Inventory Issue document for recognition of expense and than register it as a Fixed Asset in order to track it, or should I add some customization and create new object which will be linked with Inventory Issue document. Or should I say that this kind of functionality is not part of ERP and it should be targeted with Asset Management Module or Software? 

P.S. Using FA, I am afried that it will have reflect on performance, because in quantitative amount this kind of inventory is huge.

I see. So it seems like the initial entry will always be:

Debit Inventory
Credit Accounts Payable

Then, if it gets sold to a customer, you'll have:

Debit Cost of Goods Sold
Credit Inventory

Buf, if it gets consumed internally, you'll have:

Debit Expense
Credit Inventory

With the additional challenge of needing to track quantities (not currency amounts) after the inventory has been relieved.

What about this weird idea?

What if you setup a separate warehouse for each GL Expense Account (this would get messy if there are a lot of GL Expense Accounts).

Then, if it gets consumed internally, you could use the Transfers screen to do a 1-Step transfer from the "real" warehouse to the "expense" warehouse.

In the setup of the "expense" warehouse, on the GL Accounts tab of the Warehouses screen, just check the Override Inventory Account/Sub. checkbox and set the Inventory Account field to be the GL Expense Account.

That would create this entry when doing the 1-Step transfer:

Debit Expense
Credit Inventory

And you could use Bin Locations to keep track of where things are, doing transfers within the "expense" warehouse to move stuff around.

When the stuff is consumed, there is no journal entry, so you could setup Reason Codes for each GL Expense Account.

The user would have to manually choose the Reason Code that matches the Warehouse in the Issues screen (kind of clunky), but that should generate the following journal entry:

Debit Expense
Credit Expense

Which is basically a journal entry that doesn't do anything.

Bottom line though, I'm wondering if it might be better to have some non-accounting "inventory" tracking system that is just for tracking quantities of things. These kinds of systems often have barcode scanning built in, etc. They are designed to be outside of the Accounting system.

Hi,

I have a somewhat related issue.  We have a customer that would like to transfer a stock item to a fixed asset and visa-versa, a fixed asset to a stock item.  I have not found an easy one or two "clicks" way to do this in Acumatica.  There is only a mechanism to convert a purchased item to an asset or a manual entry of an asset.  This customer buys lots of off-lease copiers, they bring them into their facility, refurbish them and put them into sell-able stock.   They might take one out of stock for use within their corporate locations.  This would involve an inventory transfer out of stock and then a manual entry into a Fixed asset.  In the other instance, they have a copier in place, it is booked as an asset.  At some point, they might want to replace it, bring it back into stock item from a fixed asset.    We can do an inventory transfer out of stock and debit a clearing account?   Then enter manually that copier as a fixed asset.

If you have any suggestions would appreciate them, thanks.

Alfred,

I don't know of a way to do this unfortunately. Seems like a good opportunity for a customization though.

I used to work at a company that did something similar. They would sell their machines, but also lease them in certain situations. So they had to move them between Inventory and Fixed Assets, and back again.