New to program, using desktop version to learn how to use the program.
On the “Changes to working capital” section of the Cash Flow Statement the Inventory on hand does not report my ending inventory on hand per the balance sheet.
Currently my inventory purchases, net of the CGS on cash sales (“Receipts”) is reflected as my ending inventory on hand. If the cost of goods sold from my “Sales Invoices” were netted from the “Inventory on hand” on the Cash Flow Statement the cash flow statement would reflect the correct Inventory on hand and agree with the balance sheet.
Stated another way:
Inventory purchased $487.06
less CGS from cash sales (“Receipts”) $24.87
Inventory on hand per Cash Flow statement (CFS) -$462.19
If the $236.43 CGS from Sales Invoices were subtracted, the Inventory on the CFS would then be -$225.76. This is the ending inventory on the balance sheet (not accounting for the $18.94 write-off of inventory). Actual Balance sheet inventory is $206.82
How do I get the CGS on Sales Invoices to reduce the inventory on hand on the CFS?
For a faster response, please include a screenshot from the program.
To clearly explain your issue, create a sample (dummy) business with one or two simple transactions. Use screenshots to illustrate your point, and if helpful, share the dummy business file as well.
When creating sample transactions, keep them simple and use easy-to-follow figures, avoid numbers that would require forum members to use a calculator to understand or verify your point.
I think my question is simple. The sales of inventory items which result in cost of goods sold on the Profit and Loss Statement is not being subtracted from inventory on hand on the Cash Flow Statement. Thus the Inventory on Hand on the Balance Sheet does not agree with inventory on hand on the cash flow statement.
How to get CGS (inventory reduction) from Sales Invoices to reduce inventory on the cash flow statement?
Cash sales (“Receipts”) result in an inventory reduction on the cash flow statement but sales on “Sales Invoices” does not reduce inventory on the flow income statement. Sales Invoices do result in an inventory reduction on the balance sheet (resulting in CGS on income statement), but these same sales do not lower inventory on the cash flow statement.
Kindly provide a screenshot as evidence confirming all the claims you made. Please note that in the indirect method report, inventory changes are shown as increases or decreases relative to another period, either the selected reporting period or from the beginning.
A clear, specific example will help me reproduce the issue more efficiently and determine whether it should be classified as a bug.
The issue lies in the manager referring to it as “Inventory on Hand” in the cash flow statement. In reality, this line item is intended to reflect changes in inventory levels and their impact on cash generated from operating activities during the reporting period.
Yes, but I can’t seem to figure out how to reduce the CFS inventory from Sales Invoices. Purchasing inventory and cash sales (on Receipts) impact the inventory on the CFS.
However the CFS does not reflect either the CGS inventory changes from Sales Invoices or the collections of the A/R related to the Sales Invoices.
Inventory recalc made no difference. I know it has something to do with how I am processing Sales Invoices and Receipts since both inventory and A/R are incorrectly computed on the CFS.
On the CFS Inventory on hand amount of -462.19. If I click on it the details include all inventory purchases and also reductions reflecting cash sales of inventory.
However, the Sales Invoice sales are not reflected on the schedule. This results in my Inventory on hand on the CFS not being netted for any non-cash sales.
This sample of transactions from the CFS inventory shows an increase in inventory acquired and a reduction of inventory for a cash sale via “Receipt”. There are no inventory reductions other than cash sales.
For some reason my inventory reductions (CGS) from Sales Invoices is being posted on the A/R line rather than reductions of Inventory on hand on the CFS
The entire amount ($236.43) reflected on the CFS for A/R is the CGS amount for all Sales Invoices. Inventory reductions or CGS have nothing to due with A/R so this might actually be a bug.
Since this is a dummy company I created to learn the software, I presumed I did something incorrectly in the set-up of the chart of accounts.
I will delete this company and create a new company with minimal transactions to see if I can replicate the issue.
I will then start a similar but different discussion to keep my example clean and easily understandable.
To be honest, I’m confused. I don’t know why you have account receivable on the cash flow statement but with nothing on the balance sheet (at your reporting date 7/21/2025). The use of journal entry as well.
So, identify the problem and use a simple test transaction to prove it. A transaction or two with figures that are easily traceable across the reports.
Use screenshot to show every step and then same to reflect the effect on the report clearly highlighting where you think Manager is wrong.
This approach can easily highlight what you may be doing wrong in your data entry and also a possible software bug. Until then, I hope someone comes to your rescue. All the best.
