Best way to manage quantity gains/losses in inventory module?

I deal with multi commodities in different UOM, as like Tons, Cubic Meter, Cubic Feet and so on. For each commodity I need to record quantity gains and losses for each product and need profit and loss report in the end of the month. Now i need your help to record following circumstances:

  1. I purchased 10 Tons of inventory ‘A’. But in practical, i came to see that i have 9.5 Tons of the same product in real life which i can bill to customers. So i lost 0.5 Tons out of 10 Tons which shall effect profit and loss as well as inventory profit margin module.
  2. I purchased 50 Cubic Feet of Inventory ‘B’ (Timber logs) But when i was selling it to the customer, i could see that the timber log actually measured 55 Cubic Feet and hence billed accordingly to customer. Result: Gain in quantity/surplus in quantity which should effect my profit and loss as well as inventory profit margin module.

Please help me to record above circumstances so that they effect in both modules. Thank you.

  1. Use Inventory write-off tab which will allow you to write off inventory quantity into specific expense account.
  2. Use journal entry to debit Inventory on hand by quantity/value gained and credit some income account.

Thanks @lubos Inventory write-off is working just fine. But facing issues posting the quantity gained.

I purchased 33,000 tons and used journal to transfer 33,288 tons (288 tons gained/a surplus quantity in this case) in different warehouse. Hence i see a negative inventory cost for the 288 tons at price 3989.5 as inventory cost as attached.

As the inventory is gained, the total costing should appear as profit rather than a negative amount or am i missing something? Appreciate your advise on above and thanks in advance.

First of all, get the latest version as Manager handles negative inventory in better way than previously.

Also, I will need to see journal entry how it was recorded. Manager doesn’t have a concept of warehouses so not sure what you mean by making a journal entry to transfer quantity between warehouses.

Hi. Sorry to bump this topic again. I need help to balance my supplier’s quantity receipt in case of a gain in inventory. As advised by @lubos earlier, I credited an income account and debited my inventory on hand account and subsequently could see -1377 as quantity receivable. Could you please check attachment and advise how to settle this? Thanks.

It does not look like you selected an inventory item for your debit entry.

Also, please clarify exactly what drill-down transaction list you are showing. And how, if at all, does it relate to the journal entry you show?

as per my knowledge there is no affect in Inventory side if you use Journal Voucher. therefore you need to use Inventory Writeoff. if gain quantity put the quantity in negative number. in this way the inventory will be increase or decrease.

if want to show the gain in ledger account then you can use journal voucher

if you need to move your inventory from warehouse A to B use inventory transfer

All these statements are incorrect:

  1. Journal entries definitely affect both inventory quantities and account balance. The only difference between a journal entry involving an inventory item and any other inventory transaction is that quantities are not multiplied by unit prices to obtain amounts. Instead, the total debit or credit amount must be input directly. A journal entry can adjust quantities, value, or both.

  2. Inventory write-offs can be used only for inventory reduction. Negative numbers in write-offs are ignored.

At the present time, write-offs are the designed method for non-revenue inventory reductions. Journal entries are the only method for non-revenue inventory additions. The ability to enter inventory adjustments in both directions has been on the ideas list from the beginning: Inventory Write-off tab modifications.

Thanks for correction

Hi. I selected the inventory item which I deliberately redacted in the attachment.
The transaction shown is the quantity to receive drill-down under supplier's tab.

I suggest that for the Goods Receipts that you only create forms which match the Purchase Invoice - 55,000

Those Goods Receipts will transfer 55,000 to Qty on hand and the Journal will add the other 1,377 to Qty on hand. Currently it would appear that both the Goods Receipts and the Journal are adding the same 1,377 to Qty on hand

Now that I know for sure what you’re looking at, I agree with @Brucanna. As I interpret what you have shown, you purchased 55,000 (tons?). Then, for some reason, you entered 3 separate goods receipts on the same day totaling 56,377 tons, all from the same supplier. (Remember, you are looking at a drill-down only for that supplier). I suppose the purchase may have been delivered in three shipments. So this particular drill-down shows you have received 1,377 tons more from this supplier than you purchased. That means Manager is working as designed.

The problem is you didn’t purchase those 1,377 tons from that supplier. So the supplier’s records will always remain out of balance. There are three alternatives for remedying that problem:

  1. Have the supplier give you a corrected sales invoice for the full 56,377 tons and edit your purchase invoice to match. This will bring everything back into agreement.

  2. Adjust the purchase invoice quantity yourself. This may or may not be advisable, because now your records would not match supporting documentation from the supplier. But if you are self-creating invoices and reporting these to the supplier, as is common in some commodity sectors, this approach would not only be acceptable but preferred. (You did not describe the circumstances of the purchase.)

  3. Issue goods receipts only for the quantity on the sales invoice. Create a separate journal entry for the inventory adjustment of 1,377 tons. On that journal entry, enter no debit or credit values, just the inventory quantity adjustment.

Note that options #1 and #2 leave our goods receipts as already written. They also require you to delete the journal entry you already made.

Option #3 requires you to edit at least one goods receipt. And you must edit the journal entry to eliminate debit and credit amounts, because all financial aspects of the transaction were handled via the purchase invoice.