The records in the Inventory Activity file provide a historical record of all changes to the quantity or cost of each inventory item. When the Update program is run at the end of the count process, a record is written to this file for each item being adjusted.
LOC: The Location of the item being adjusted. The combination of the Location and the Item Number are used to identify the inventory record being adjusted.
ITEM_NO: The Item number field stores the inventory item number that the record applies to. This field is used along with the location field to identify the specific item to which the record applies.
TYPE: The transaction Type. All inventory count transaction records are assigned a type of AIC@ (inventory count).
TRAN_NO: Transaction Number. This is a unique number assigned to each inventory transaction or to each group of transactions which are processed at the same time. When the Update program is run at the end of the inventory counting process, all of the items being adjusted will be assigned the same Transaction number.
TRAN_DATE: Transaction Date. The date on which the transaction was processed.
QTY: Quantity. The quantity of the adjustment made to the on hand quantity of the item. A reduction of the on hand quantity of the item will be shown as a negative amount. An increase in the on hand quantity of the item will be shown as a positive amount.
PREV_OH: Previous on hand quantiy. This field stores the on hand quantity of the item before the transaction was processed.
BIN: The Bin that this inventory transaction is associated with.
Adjusting Average Cost
The Stream V Product Management System provides you with a method for updating the average weighted cost of an inventory item. The average cost adjustment feature allows you to modify the average or accounting cost of an inventory item and to automatically charge the amount of the adjustment to a general ledger account.
The Average Cost Adjustment option uses a Generic Code Table to define the valid average cost adjustment codes, and this table also controls the general ledger accounts that each adjustment is charged to. Security options allow you to restrict the users who can process cost adjustments. Average cost adjustments are typically processed for the following reasons.
• To correct the cost of an item that has been received into inventory at an incorrect cost. This type of adjustment is normally made when a purchase order price variance is discovered during entry of a vendor invoice for inventory received. The difference between the accounts payable invoice and the value of the merchandise received is posted to a price variance account during accounts payable entry, and then an average cost adjustment is then made to correct the cost of the items still in stock. The cost adjustment is also posted to a price variance account (to reduce the variance by the amount of items that were corrected before being sold). For more information about this kind of error processing, please see the Accounts Payable and Three Way Matching documentation.
• To reduce the cost of an item due to inventory depreciation or due to a decrease in the market value of the goods (adjusting the item cost to lower of cost or market). In some situations, inventory values must be changed due to inventory depreciation requirements or due to obsolescence. The average cost adjustment feature allows this type of adjustment to be made and to be charged to a depreciation or other general ledger account.
• To correct the cost of a non-stock item that was entered incorrectly or that needs to be updated. Labor and other non-stock items can store average costs and the average cost adjustment procedure can be used to update these costs as required. Typically a non-stock item has a on hand quantity of 0, which means that an average cost adjustment will not affect the value of on hand inventory, but there are places (such as sales posting), where the cost of a non-stock item is posted to the general ledger. The average cost adjustment option allows the cost of the non-stock items to be controlled and modified as required.