Inventory Value is not correctly showing in Divisional Balance Sheet

I have 3 divisions setup for a retail business. Each division has separate Inventory, and Suppliers assigned to division accordingly. In Divisional balance sheet Consolidated Inventory is correct but divisional Inventory is not. Trial Balance is also not showing the correct inventory. Upon detailed review it seems the purchase transactions are not showing in divisional Inventory. Pictures are attached, seems like a system bug. On drill down, the inventory ledger opens up showing correct Inventory.
please advise corrective measures.

You need to furnish more information before anyone can understand what your issue might be:

  • Show the Edit screen for this balance sheet. Without that, it is impossible to know what the columns represent.
  • What are the debit notes for? A debit note should be entered when a supplier issues you a credit note, reducing the balance you owe them for some reason. But it looks like you are issuing debit notes to yourself.

It also appears you are using some features of the program incorrectly.

  • Journal entries are not used to transfer inventory items from location to location.
  • You seem to be using one inventory item to represent all inventory at a location.

I can assure you there are no bugs affecting the balance sheet report. Either you have entered something incorrectly or you misunderstand what the report is showing.

1 Like

Hey Tut,

1- Sharing Report Attributes of Balance Sheet shared earlier.
2 - Debit notes are for stock returns to supplier (Damaged goods), they are reducing the inventory, and payable. (on the store, this is actually done by reducing the payable amount in the next purchase bill, and marked on the bill accordingly. In manager Debit note works well for our internal management and control)
3 - The Aim is to transfer inventory from division to division. Inventory transfer option only changes the location, so I am using Journal entry to transfer stock between divisions. (Please advice if there is a better way to accomplish this)
4 - Yes, Number of SKUs on the store are in the magnitude of 20,000-25,000. Since from accounting perspective, I only wish to track the cost of Inventory, one Inventory Item is being used in every division.

Inventory value on the balance sheet is -46 mil, but on drill down the ledger opens up showing 94 Mil, which is the correct value.

Is there a way to share the project with you in private, so you can advise what I am doing wrong ?

I believe you misunderstand the report you have defined:

  • Your first column shows the position of MCC Mall G-9 at a certain date, 20/2/2022. It is not an opening balance that will be modified by other columns, because they do not represent movement.
  • Your second column shows the position of the same division at a later date, 31/3/2022. Its balances are not added to or subtracted from the first column. It stands alone.
  • Your third column shows the position of a different division, Kallar Syedan, on the same date. Likewise, it has no relationship to the first column. Nor does it bear any relation to the second column.
  • Your fourth column shows the position of yet another division, MCC Mall B-17, on the same date. It is also separate from all other columns.
  • Your final column shows the position of the entire business on 31/3/2022. You have labeled this as a total, but that expectation is only satisfied if every single line item on every single transaction has been posted against one of the three divisions. The likelihood that you did that is small. And even if you did, there would be no connection to your first column.

You would have to confirm this, but it appears you thought you could define an openeing balance, list movements in each of your three divisions, and have those sum up to the balance sheet figures for your entire business. That simply is not how balance sheets work. They do not contain movements or changes in accounts. They list balances at specific dates.

That is appropriate use.

Whether this is acceptable depends on specific workflow steps. It really does not matter what individual stores do or how they mark bills or invoices from suppliers. What matters is what you record in Manager. You have not furnished sufficient information to tell whether you are handling returns to suppliers correctly.

Assign the locations to the divisions in a one-to-one correspondence. That way, if you transfer from one store’s location to another’s location, you are transferring from division to division.

Then you should not be using Manager’s inventory features at all. They are all set up on the basis of each unit of an inventory item representing a tangible good. You need to convert your entire inventory management system to ordinary accounts and calculate its value through some other system.

Other forum members may have different suggestions, but based on what you have share about your preferred business practices, I don’t think Manager is the right accounting system for you.

Hi Tut,

Let me try to redefine the problem. Given below is my Inventory Items definition

Inventory Value Summary shows the movements in this Inventory Item for the same period as Balance Sheet shared earlier.

This is consistent with Inventory balance shown under Total (Consolidated) column

But Inventory under Division MCC Mall G-9 (Column titled : Mall Q1) is not taking into consideration the Purchases and Debit Notes.
It is calculating the inventory on following : Opening Balance - COS - Stock Transfers = 65,808,677 - 109,412,808.23 - 3,155,588.62 = (46,759,719.9)
To summarize, what could be the reason for Manager not taking Purchase under Division, Although I am purchasing inventory that belongs to a specific division, from a supplier that belongs to that division.

A sample purchase transaction is also provided below :

This is such an unusual application of Manager’s inventory features that I have no response.

I think that this is bug.

See balance sheet below where Test Inv Division is nominated in supplier, and Test Inv division is nominated in the Inventory item. Purchase invoices using both of these produces this result. The amount under division Test Inv at accounts payable is correct but there should also be the same amount at Inventory on Hand and nothing at interdivisional loan.

The next screen shot includes a sale where the inventory reduction is shown correctly at Inventory on Hand.

@Nauman the best way to diagnose this problem is to share a dummy business with few transactions and reports to illustrate the problem.

Hey AJD,

I think you have replicated the issue very well. The COS is being posted under division, but purchase is not. If I were to breakdown every further, Sale/Cos are P&L accounts and division is selected at transaction level. This is being done correctly. Purchase transaction affects balance sheet accounts (i.e Inventory in Hand, Account Payable), and although divisions are assigned to both these accounts, Inventory is only taking purchase at consolidated level.

@Abeiku, I will try to do in the next day and share the business export here. Thanks for the idea.

Hi Experts,

I have created a dummy project with one division “Fruit Shop”. Two Inventory Items Apples & Oranges assigned to this Division. Purchase results in Inventory on hand at consolidated level (nothing in division). Sales result in negative inventory in Division.
Backup file provided below, kindly check and advise.
Fruit Shop (2022-09-16).manager (24 KB)

Don’t use pdf - it is not allowed - just post the results here

@Nauman, your PDF attachment was deleted because it presents a security risk to other users.

Apologies for that.
A purchase of 5000 was done for Inventory Items Apples and Oranges (Both items are assigned to division Fruit Shop) from Fruit Supplier (assigned to division Fruit Shop).

In Balance Sheet, I have 5000 Account payable under the division but the Inventory is 0.

Adding a Sales Invoice, COG is assigned correctly, making the inventory negative under the division.

Show edit screen for inventory items Apples, Oranges

Not that we don’t believe you …

Hi Joe, only seeing is believing in the modern world :stuck_out_tongue:

What is FS1?
I presume it is an Inventory Location - please show the edit screen

Yes, FS1 is Inventory Location.

Hi Experts, any recommendations in this case?