Difference Inventory Sales against Inventory Cost

I noticed differences between Inventory Sales and Inventory Cost which shows that not all articles sold are also taken into account for the Inventory Cost.
Please see picture:

For instance: invoice 20170053 contains in the Inventory Sales [MultiTafel Standaard Inklapbaar] and [MultiTafel Transportwagen Standaard] whereas in the Inventory Cost it shows [MultiTafel Transportwagen Standaard] only.
Invoice 20170022 is dated 20-04-17 in Inventory Sales and in Inventory Cost it shows 25-05-17.
I really don’t know what went wrong.

Does anyone have any idea what I should do to make sure Inventory Sales are also in Inventory Cost?
And how to correct it?
Consequence now is that I do have a nice amount of profit, because there are no costs on the P&L…

It appears that your screenshot is from external of Manager.
Can you show screenshots of the Inventory Items from within Manager by clicking on the “Qty on Hand” balance or the “Qty owned” (if you have that column)

Thank you for your reply.

Indeed I have gathered the information en put it in Excel.
What I did was:

  • Clicked on the figure near Inventory Sales in the Summary Profit and Loss Statement, and exported that info to Excel
  • Clicked on the figure near Inventory Cost in the Summary Profit and Loss Statement, and exported that info to Excel
  • In Excel I combined the info of both sheets and I saw that not all articles which were sold were also booked as Inventory Cost.

And I am really puzzled here. I assumed that when an invoice is made two things happens in the bookkeeping.

  1. journal entry or registration of the sales: Debtors against Sales
  2. journal entry or registration of the cost of sales: Stock against Cost of Sale.
    Now it seems that not all of the Sales or also registered in the Cost of Sales, which gives me an unrealistic profit figure.
    Am I making myself clear? Please let me know if you need further information.

I fully understood your situation prior to this explanation but to assist we need to see the data as it appears within Manager - the source of the exported data as requested

Inventory Items shows this:

When I click on [3] of [MultiTafel Standaard] i get the details.

Is this what you want?

In your first screenshot : by having -45 under the Qty to receive column indicates that there is a missing Purchase Invoice.

In your second screenshot the last line “Over te nemen voorraad” or “Goods to be taken over” has a qty 45

What is the story here, it appears to be an opening balance for 45 : is that correct ?
If yes, then it shouldn’t be taken up via a Goods Receipt as Goods Receipts are only used when there will also be a matching Purchase Invoice.

To take up an inventory item opening balance - use the starting balance feature

When you do this, inventory values are automatically added to the BS - Inventory on hand account and become the Starting Balance

The fact is that the corresponding invoice still has to be made by the supplier, which is a company owned by the same owner.
So, for the time being I assume the invoice will come, this year ;-).

I have been looking into this too, trying to find a reason. But as far as I can see, the missing purchase invoice will not be the reason for the fact that several sales invoices don’t have, or partly have, a registration in the Inventory Cost.
It happened that a certain article is registered as a sales invoice in the Inventory Sales and also in the Inventory Cost, which is ok. And the next invoice the registration in the Inventory Cost is missing.

I would like to know how the program handles the registration in the Inventory Cost.
Does that happen at the moment the sales invoice is been made? How about changes in the sales invoice which are made afterwards.
Still puzzling.

I am thinking about setting up a new administration and try to find out what is happening when.

I think you will find that it is, with out that missing invoice you have oversold your accounting inventory - Qty Owned. Inventory cost can only occur when there is actual accounting inventory available, this is not the same as physical inventory - Qty on hand.

Why don’t you create a Purchase Invoice just for 45 MMT-001 Items. Then your Qty Owned should match you Qty on hand of 3 items and the related Inventory Costs should also appear.

Indeed there is a relationship between Inventory Cost and Qty Owned. By making that particular invoice only for 45 MMT-001 there are no gaps anymore in the Inventory Cost for that item!!!
Thank you so much for making this clear to me, I really did not have a clue, other than some mysterious dynamic floating around in the program…

Ok, this will bring me back to the issues mentioned in the post: More clarity under Inventory Items.
Lubos and you stongly advice not to make fake invoices, to which I agree but at that time I thought it was the best solution.
Consequence of this is that when I want to see a realistic profit figure I will somehow have to correct the Qty Owned.
And the only way to do that is to make a purchase invoice, am I right?

If you haven’t an actual Purchase Invoice, but do expect one in the future - create an accrual Journal matching the expect Purchase Invoice, then when that Purchase Invoice arrives post it to the accrual account rather then directly to inventory itself.

I have made a liability account called [Te ontvangen facturen] (Invoices to receive).
Then I made the journal entry:

Checking Qty Owned:

Looks good!

Checking Qty on Hand:

The items are not located, simply because it is not possible to do that in the Journal entry. Will that cause problems?

So in overall it seems this is the best way to go.

You are right, at the end, the account [Te ontvangen facturen] (Invoices to receive) should be 0.
In [Inventory Items] the column [Qty to receive] will be an important column for me because there I can see which Goods Receipts don’t have corresponding invoices.
This all can be done because it’s not a large firm. Maybe it’s a nice goal to think of a way to have this issue better automated in Manager.

May I thank you very, very much for your time, understanding and willing to help!

Then use an to reallocate the inventory from unspecified to Magazijn

Reallocation does do this to Qty Owned:

And this to Qty on Hand:

Do you know why there is no minus figure in Qty on Hand because of location [Unspecified] like in Qty Owned?

Yes, Qty on Hand is a just an inventory count, whereas Qty Owned is an accounting transaction - Unspecified Location credited and New Location debited

Qty Owned

Qty on Hand

Which means that in my case Qty on Hand is a useless stock figure. Qty on Hand registrates the Goods Receipt as well as the transfer from Unspecified Location to New Location. So twice.

Can I leave the Qty on Hand for what it is and concentrate on Qty to receive - Qty to deliver - Qty Owned?

I do know that the best solution is to have the invoice before the goods arrive. Then there is no problem.
But unfortunately that is just not the case, and I may say, that is just not the case with many firms in Holland.
Here it’s quit normal to receive and trade the goods before the purchase invoice has been booked.
If one has to produce monthly figures (BS and P&L) for a trading company, it would mean a lot of extra work doing the way I am doing it now. Although I am very glad it can be done, thanks to your help!

I wonder, do you know other users who have to deal with the fact that normally the Goods Receipt is prior to the receipt of the invoice?
Would it be of any use if I describe the way how accounting programs here handle that situation, or will I offend someone?

You shouldn’t have that Goods Receipt for the 45. The Accrual Journal has taken up the opening inventory as an alternative to entering Starting Balances. Starting Balances don’t have Goods Receipts.

Goods Receipts are associated with “Inventory” Purchase Invoices, but in this case there will be no “Inventory” Purchase Invoice as that Purchase Invoice for the opening inventory, when it arrives, will be posted directly to the non-inventory “invoices to receive” account - so no Goods Receipt required.

With Manager, it doesn’t matter which comes first - the Goods Receipt or the Purchase Invoice.
Both are normal situations - as long as both occur within the reporting period.

Thanks for making this clear.

"as long as both occur within the reporting period."
And that is the main issue.

Am I right stating that:

  • Looking at the P&L figure in the summary will not give me the accurat information, because there could be purchase invoices missing, which causes the Inventory Cost to be inaccurat.
  • When making reports I have to check the Goods Receipts to see wether all the Goods Receipts do have a Purchase Invoice number in the column [Invoice number]. If Purchase Invoice is not equal to the Goods receipt, a note has to be made in the column [Description].
  • Differences between Goods Receipt and Purchase Invoice should be corrected with a Journal Entry.
  • Items should be transferred from [Unspecified location] to a “Specified Location”.
  • Items in the Goods Receipts which are unequal to the Purchase Invoice must be taken out of the system.

After the report has been made, reverse the whole lot, or post the arrived purchase invoice to the accrual account.

In the Balance Sheet the Inventory is named [Inventory on Hand]

But actualy it is the Qty Owned.
Or am I wrong?

Once again this is a timing issue, if you are reporting on a month end then reporting is usually done around the middle of the following month, thus allowing time for the processing of any reporting month transactions which arrive after the month end. This should minimise any accrual requirements.

Unsure of how many business actually deliver this month but don’t invoice until the following month.

The BS account states “Inventory on Hand” (not qty on hand) as an accounting value, whereas both Inventory Items tab references of “Qty on Hand” and “Qty Owned” are quantity based regardless of how you are using Manager - with or without Goods Receipts / Delivery Notes.

However, you always have the option of renaming “Inventory on hand” to what ever suits by going to Settings - Chart of Accounts and clicking Edit next to that account.

Again, thank you for all your help!

One last question, am I right that the value of [Qty Owned] in [Inventory Items] is related or always the same as the value of [Inventory on Hand] in the BS?