Inventory Cost

hi all,

why after I updated my software from 20.5.2 to 20.7.48, the Zero inventory items are not automatically converted to Inventory Cost anymore? Is there a new setting for that?

Thank you
Sanif

Are you using production orders? Could this be related to this topic?

ah, yes. so how it works is different now after update?

The software is more strict with production orders now. This is because if you used production orders and had negative inventory, the older versions would calculate inventory cost incorrectly.

You need to review your production orders with insufficent qty and think about why there is insufficent qty…

Basically the newer version is highlighting bookkeeping issues more agressively. And by doing so, it forces you to have your accounting records complete.

Just to clarify, there is nothing wrong with production order having insufficent qty if the qty is coming into inventory at some point. But if you have production orders with insufficent qty which are many months or years old, that indicates a bookkeeping error.

yes, that’s good. so we can know by a glance whether or not there is negative inventory. so it means, now i need to use Journal Entry to put the inventory items into expenses?

Negative inventory is not an error state in Manager. I consider negative inventory to be a normal state for many businesses.

But there should be reason behind negative inventory. When you see qty -5 and you can justify it such as “we sold 5 units to customer and yet to purchase them from our supplier” - that’s perfectly fine.

Do your production orders have insufficent quantity? Why? Do you know the reason? Based on that reason, there is solution how to make it correct.

i used to let the staff put blank in the qty when pay for purchase of goods that I don’t want to keep track of the inventory, such as fresh vegetables. So, buy doing so, Manager will automatically move them to Inventory - cost, which is what I want. Now, with the new update, i think i need to do it manually, isn’t it?

@Sanif_Sentosa you should have setup these items as Non-inventory items. See: https://www.manager.io/guides/7344

Then you can use Qty field and the amount will go directly into your expense account.

ah yes, it helps. but it seems after this update, many of our work procedures have to be changed.

ok then, thank you very much Mr. Lubos

Which one?

such as the zero inventory items, that previously automatically converted to Inventory - cost, now it’s not anymore. I have to use Journal Entry to do it.

btw, I have quite big amount in Production In Progress. How to do I make it zero?

Thank you

By purchasing the inventory item(s) with insufficient quantities so the affected production orders can be transferred to Inventory on hand. Read this Guide: https://www.manager.io/guides/29016.


but why in the above pictures, there are still qty 4 in the inventory, but the production order stated insufficient qty?

Because you don’t own those. Your quantity owned is -40. It appears that you have entered goods receipts for Choco Malt Crunch that you never purchased. That is why your quantity to receive is also negative. Yet you have evidently been selling or using this inventory item in production.

because i just received the goods, but haven’t paid for it yet, as the invoices are not received and payments haven’t been made. should i “pretend” that the payment has been made so that the qty owned became positive?

No. Did you read the Guide? You will have an insufficient quantity and the cost of the finished inventory item will accumulate in Production in progress until all costs are known. Then it will be fully costed and will transfer to Inventory on hand. At that point, any pending sale will clear and the cost will transfer to Inventory - cost.

so u mean i just need to wait until the purchase invoices have been fully paid, which at the end the Production in progress will be accomplished?

For the third time, read the Guide!