Create a new Journal Entry enter qty and debit amount for each item.
Then go to Reports-Inventory Revaluation Worksheet and create new Inventory Revaluation Worksheet.
Enter all Dates as your Starting Dates.
I hope this helps.
Enter all Dates as your Starting Dates.
I hope this helps.
That’s not possible @shahabb, look at the account in the screenshot you provided.
The only solution is to do negative inventory wirite-off.
And regarding the Inventory Revaluation Report …
It’s not appearing in the test business I created to test this issue. It’s on Cloud Edition.
It could be that the report requires certain things before it shows the report, but it isn’t available for opening balances from a clean start
What do you mean not possible? I have explained everything if you want to do it through Journal Entry.
You need to disable Inventory Automatic Revaluation for this report to appear which is disabled for new buisnesses by default. But do check again Settings-Obsolete Features-Inventory automatic revaluations
If you take the time to look at the screenshot you provided, you will see that the account is the expense account and not the inventory account.
You cannot use Journal Entries to add quantities as you described.
My mistake.
I use desktop and it showed up just fine in my test.
Yes and that’s how this Periodic Revaluation method is working and its not only Journal Entry its like this on Payments, Purchase Invoice /Debit notes. You dont have to worry about that. And i have explained this earlier
What i am confused about you were not using Inventory Periodic revaluation method so for those who arent using this method Inventory on hand account should appear (which is appearing in my test businesses using latest version 24.8.11.1812). Still you claimed earlier there is an issue.
That’s a counterintuitive hack.
You shouldn’t have to teach new commers to post a wrong entry on purpose and then rely on a feature that may or may not continue to work as is in the forseable future to fix it.
This is a recipie for future panics when the specifics of the valuation method changes.
In order for it to be called a solution it has to stand to these criteria:
- Every entry must be meaningful
- The entire process should be future proof
Right now setting up opening balances for inventory items involves extra step (if you want them to be capitalized on balance sheet). But in exchange, it makes your inventory figures a lot easier to understand and troubleshoot down the line when you accumulate a lot of inventory transactions.
What I’m trying to achieve here is that I want businesses to focus on tracking their quantities correctly because that is all that matters.
The balance of their inventory on hand is simply quantity owned multiplied by Average cost.
Average cost is not calculated automatically, it is to be manually entered. Although there is a revaluation worksheet to suggest what your average cost seems to be for each inventory item based on past transactions. For many businesses, they might be updating their average cost for their inventory items once a year only. And for businesses who are not interested in capitalizing their inventory items, they never do it.
Yes - periodic inventory revaluation is slightly less automatic. But counter-intuitively it will cost you less time doing bookkeeping in long run.
I admit I’m struggling to sell benefits of periodic inventory revaluation to users who are perfectly happy with automatic inventory revaluations. It’s only when they experience issues when their figures appear to be wrong and have no idea how to troubleshoot or fix, then I explain how this would never happen under periodic inventory revaluation and it’s only then when they want to make a switch.
I dont know if this should be even called Periodic Revaluation. As automatic revaluation is still happening just costing method has been changed from Avg costing to Standard costing.
That might clear it up for some people.
Personally i had no issues with Automatic avg costing method but this method is also fine. Even i have seen businesses who leaves inventory out of accounting software and do it separately because of this very reason that they have issues in understanding the automatic avg costing and they use this Standard costing method manually.
If possible carry both method in program side by side and make this optional. If not there is no issue in this method too.
@lubos I appreciate your efforts to improve your system. However, an opening journal that posts the debit to an expense account and not the inventory asset account is not supported by any other accounting system I have ever seen. An opening JE should be sufficient to establish said quantities and amounts. Running a revaluation (when costs have not changed) should not be required. I stand by my statement that the inventory system is broken.
I agree and am also confused. @Lubos it seems that you are taking Manager from a perpetual inventory system to a periodic inventory system. Both have their value but we prefer the perpetual one and these also include methods such as FIFO, LIFO, Average, etc. Maybe consult https://www.accountingcoach.com/inventory-and-cost-of-goods-sold/explanation/4 on how to be more consistent with the perpetual system.
Or as @shahabb suggested that maybe you allow selection of periodic inventory management for those that prefer manual periodic stock taking as you seem to currently implement and perpetual for those that keep track based on invoices, receipts and payments.
It is indeed a move forward that several methods Average, FIFO, etc. can be selected.
I disagree that the system is broken, but it is an unexpected direction and hence the plea to support both Perpetual but improved allowing different methods and Periodic also with different methods.
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Transitioning to a method which is NG Software can support (implementation & Maintain & user guidance) long term is a sensible approach imo.
Leaving in an old system until doing so added an excessive program maintenance burden is also reasonable.
Departing from how other programs do it is not really relevant imo.
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But depending on what it is we may want to be able to do what other accountings software don’t let us do, it needs to taken into consideration, but I think @lubos knows what he is doing for the most part.
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It is in fact irrelevant, provided the effort spent on managing inventory is more or less the same.
I say this since the amount of work to be done by the user has to be taken into account – relative to other software, since efficiency in managing Inventory could make or break a business.
I agree with @eko that Dynamic Recalculations are the better option.
I remember the case that lead to this development and it was about the inability to account for cost when there’s insufficient quantities.
Personally, I would have settled for a searchable flag of the culprit transaction and a contextual button to rerun the calculation for that particular transaction once the quantity has been fixed by the user but I’m not in a position to judge the feasiblity of such development. However, I can only hope that the developer provides a solution that ultimately checks all the boxes.
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What i you add the inventory on Hand in your accounts, then pass a journal to reallocate the inventory costs in expense account to Inventory on hand account which you have add in your BS account, hopefully thats the other option to deal with the issue for the mean time