The Inventory Cost Adjustment program allows you to adjust the weighted average cost of an Inventory Item and to post the value of the cost adjustment to the general ledger.
When you select the Inventory Adjustment program from the Pull down menu, the cursor will positioned in the Location field. To process an adjustment, you should first verify or change the inventory location in which the adjustment will be processed, and then select the inventory item to be adjusted. The windows which are used to select the item and process an adjustment are described below.
Location: The warehouse or inventory location in which the item cost will be adjusted. You may use the prompt button in the Location window to display a drop down list of the valid inventory locations on your system so that you can select the appropriate location from the list. Please note that when an Average Cost Adjustment is processed, the system adjusts the cost of the selected item in all inventory locations that are in the same division as the selected location. In most situations, this will be all inventory locations. The reason for this logic is to keep the accounting cost for each item synchronized so that transactions in non – operating locations such as the RMA location will pick up the most accurate current costs for each item.
Item No/Manu Item#/Description Fields: The Item No window is used to select the inventory item to be adjusted. You may use the prompt button in the Item# window to display the Inventory Selection List so that you can select the item to be adjusted from the list. Once you have selected an inventory item, the inventory item number, inventory description, manufacturers item number, and inventory description2 fields for the item are displayed in the appropriate windows. Please note, Non Stock Items (items which have the STK set to N) cannot be processed in the Inventory Adjustment program as these items should always have a quantity of zero. Nonstock items will not be shown by the Inventory Selection List that is used to select the item to be processed in the Adjustment program.
Prompt Button – Inventory Detail: The first of the prompt buttons next to the Item Number field allows you to activate the Inventory Detail Panel which displays the detailed information about the selected Inventory Item that is maintained in the Inventory Master file.
Prompt Button – Catalog Detail: The second of the prompt buttons next to the Item No window allows you to activate the Catalog Detail Panel which displays the detailed information for the selected Inventory Item that is maintained in the Product Catalog File.
On Hand/Cost Fields: The fields that are displayed below the Item No and Description fields in the Inventory Adjustment program are used to display the current On Hand quantity for the item in the selected location and the current Unitcost (weighted average or accounting cost) and Last Cost (last purchase cost) for the selected item. These fields are used for display only and you may not modify the quantity or cost displayed in these windows. You may adjust the average cost of the selected item by processing a cost adjustment.
New Cost: The New Cost window is where the new average cost for the selected item should be specified.
Code: The code for the cost adjustment being processed. The valid inventory cost adjustment codes are restricted to the codes that have been set up in a Generic Code Table (IACCODES). Each of the Gencode records contains a description of the adjustment and information that identifies where the adjustment should be posted in the general ledger. You must select one of the valid adjustment codes in order to process an inventory cost adjustment. The prompt button in the Code window can be used to display a list of the valid inventory cost adjustment codes so that you can select the appropriate code from the list.
Bin: The bin in which the quantity adjustment should be made. Once an item has been selected in the Inventory Adjustment program, you may use the prompt button that is located in the Bin window to view a list of the bins for the selected item in the selected inventory location. You must select a valid Bin from the list before you can process a quantity adjustment. You may not adjust a bin quantity below the committed quantity in the bin. The committed quantity is the quantity from the bin that has been committed to printed but un-processed sales order pick tickets and shop order pull tickets. If you need to adjust the bin quantity below the committed quantity for the bin, you must first reduce the committed quantity by re-setting the appropriate pick lists or pull tickets.
Comment: The section of the Inventory Adjustment program between the Bin window and the Adjust Button can be used to input a text note or comment that explains why the item quantity is being adjusted. This comment will automatically be created and associated with the inventory transaction for the adjustment as the adjustment is saved.
Last JE#: The Journal Entry Number assigned by the system to the last inventory adjustment processed in the program. The Last JE# field will be loaded only after an inventory adjustment has been processed in the program.
Last Tran#: The Inventory Transaction Number assigned by the system to the last inventory adjustment processed in the program. The Last Tran# field will be loaded only after an inventory adjustment has been processed in the program.
Adjust Button: The Adjust Button is used to actually process the inventory adjustment. When the Adjust Button is pressed, the system verifies that a valid location, item and bin have been selected, and that the quantity being adjusted does not cause the inventory quantity to be driven below the allocated quantity for the item. The program also verifies that the adjustment will not cause the bin quantity to be driven below the bin committed quantity, and that a valid adjustment code has been selected. If the information that has been specified in the adjustment program is valid, the system then processes the adjustment. The quantity of the bin and the inventory item are updated, an inventory transaction is created to record the adjustment, and a journal entry is made to post the inventory adjustment transaction to the general ledger. Once the adjustment transaction has been processed, a message is also displayed notifying the operator that the transaction has been saved, and the Journal Entry and Inventory Transaction numbers used for the adjustment are displayed in the appropriate window.