What is causing the extra lines with a date but no data. I tried deleting them but I can’t. They seem to be tied to the payment with the same date.
Here is a screenshot from the balance sheet report.
I am new to inventory.
The payments are “in- freight” charges as described in the guides. Some of them have both a credit and a debit but not all of them, and as far as I know those payments were created the same as the others.
It is generally impossible to troubleshoot by looking at transaction lists like these. You need to look at Edit screens for the transactions involved. Often, it is necessary to know which tabs are enabled, especially for inventory management. And it is sometimes necessary to see the chart of accounts.
You may have a situation where an inventory item was backordered. Manager will not count items as being delivered that you do not own. So there can be automatic entries when additional stock is acquired.
The only way to know what happened is to go back in your records to a well-understood situation and follow the transactions forward, one by one. Be sure you have read the three-part Guide on inventory management, starting here: Manage inventory - Part 1 Introduction | Manager.
I changed the date of the Purchase invoice of the actual items, to before any other transaction That fixed the problem. I think what was happening was that I was putting an expense on an item that was not there. the extra line was an immediate credit because there was no item.
You don’t have to change dates, and you should not. What your experience shows is that the program handles back orders correctly.
It will all come out in the wash in the long run. but is does change the numbers. any expense incurred before the purchase of the item will not be included in the average cost of the item. it will be an immediate expense.
I changed the date back again to show this.
Average cost works itself out. A difference on one transaction will be offset by an opposite difference later.
@ben7230, your following observations are correct:
1 - “I think what was happening was that I was putting an expense on an item that was not there.” (zero quantity)
2 - “Any expense incurred before the purchase of the item will not be included in the average cost of the item.”
But these also highlight that you aren’t processing those transactions correctly.
When you receive a Freight-in invoice which is separate from the Inventory Items invoice, then that Freight-in invoice shouldn’t be posted directly to the Inventory Item but to a “clearing account” and then transferred on to the Inventory Items invoice.
Freight-in invoice posted to a “clearing account”.
Inventory Item invoice taking up the transferred Freight-in
Now the Freight-in will be included as part of the Average Cost rather then being processed through to the cost of goods sold expense due to the zero quantity. PS I will retitle the topic to better reflect the topic.
Ok, thanks for the explanation. I was using these instructions in the “Add freight-in to inventory item costs” guide.
Manual allocation of separate freight-in charges
Manual allocation is most convenient when only one or very few inventory items are involved. (But see the Note below on a simple way to enter data for many items.) It is required when freight-in costs are not proportionally distributed according to line item totals.
To use the manual allocation method, choose the inventory item to which a freight-in charge applies when entering the payment or purchase invoice to the freight-in supplier, but leave Qty blank. Edit the description to describe the freight-in charge. Enter the freight-in amount in the Unit price field. Repeat this process for every inventory item to which freight-in charges are being allocated. Dates on forms for the purchase and freight-in do not need to match. Average costs will be correctly adjusted as of the transaction date for the freight-in charge.
Example
Northwind purchases the same two inventory items from the same supplier as in the last example. They are shipped by a separate shipping company at different times. The freight-in charges are billed by the shipping company on the same sales invoice, broken out by inventory item. The freight-in charges are not proportional, so manual allocation is mandatory. The payment form or purchase invoice is completed as below:
Freight-in charges are allocated differently to inventory item average costs than in the previous automatic distribution example:
In the second paragraph this sentence is found.
Dates on forms for the purchase and freight-in do not need to match. Average costs will be correctly adjusted as of the transaction date for the freight-in charge.
But maybe I am missing something
@Ben7230, hopefully without sounding critical, let me say that your posts in this topic have wandered somewhat, making your overall situation and questions difficult to understand. You started by showing transaction lists, but never showed Edit screens for any of the transactions, so no one could see what was going on. Then you shifted to a brief discussion about the timing of freight-in invoices. Most recently, you quoted a very lengthy passage from a Guide and another short excerpt, then asked if you were missing something.
What you have never done is explain your situation, describe what is confusing you or what you think is wrong, and provide a complete example with screen shots. In other words, what are you doing and why do you think it is not working (if that’s what you think)?
Ok, sorry, yes, I did not explain myself very good in the last post. Sometimes it is hard to explain the ideas or thoughts in my head in words. I will try again.
I was following this section in the “Add freight-in to inventory item costs” guide. as I had five different charges from different companies.
"Entering separate freight-in charges
When freight-in charges are billed by and paid to different suppliers than inventory item(s), separate payment forms or purchase invoices are required. After all, you cannot record amounts paid to one entity on a transaction form for another. Examples include:
Direct billing by freight companies
Separate invoices from freight forwarders
Fees from brokers
Customs charges
For these situations, both manual allocation and automatic distribution are available. Manual allocation can be used in all cases. Automatic distribution can be used under limited circumstances and includes drawbacks some users (or their accountants or auditors) may not like."
I chose the manual option because I felt it was best for my situation. That is why I posted the quote from the guide in my last post.
and in that section, is this sentence.
it says dates do not need to match. That is what threw me for a loop and as far as I can tell in the guide it doesn’t say that the freight in charge needs to be after the purchase of the item, and in the manual section of separate freight charges, it never talks about adding the freight in to a clearing account.
So what i am trying to explain with all this, is that the guide is a little misleading.
however I now understand how the clearing account works thanks to @Brucanna, and will probably be using it.
hope that helps.
Thanks. Now I understand your confusion. I will initiate a clarification of the Guide.
Realistically, however, situations where freight-in charges arrive before purchase costs would be unusual, though not impossible.