Forum Discussion

annbrinck's avatar
annbrinck
Experienced User
3 years ago

Value of Inventory Items Backdating

Morning We are having an issue with our Inventory Value Reconcilation (IVR). When finalising our September reports, we noticed that the IVR report was out from previous months reported and changes ...
  • Mike_James's avatar
    Mike_James
    3 years ago

    Hi annbrinck , changing the referral source is probably enough to trigger a re-recording of the invoice when you click OK; this will then use the present-moment average cost of stock, which may differ from the cost when the invoice was first recorded. (I haven't tested this type of change myself, but I do know that changing a (non-financial) line description does the same). 

     

    When raw material prices change, the historical amounts used in autobuilds will not change; I note that the autobuilds in the item registers did not change between file versions.

     

    Prior purchase transaction journals can be changed, in cases where:

    - purchase orders are used, and

    - receive items are used, and

    - the price on the final purchase bill needs to be changed, and

    - sales of that purchased stock have taken place before the bill is recorded.

    AccountRight regards the cost of sale on such invoices as provisional until then, and will automatically make cost of sales adjustments. These adjustments used to appear as separate inventory journals in v19, but in the current program they are accumulated with the original purchase journal, which is tidy but not auditable.

     

    The average cost of an item is recalculated after each recorded transaction (purchase, inventory journal); every sales invoice uses the average cost of stock onhand when that invoice is recorded.  

annbrinck's avatar
annbrinck
Experienced User

Hi Mike

 

Thanks for your response.

We do lock a period once processing finished processing.

However - during September I did unlock and go through all invoices for 2021 and 2020 to add a referral source (for additional reporting reasons).  No changes were made to any figures though.  Why would this have caused the changes to COS? 

I have a couple of additional questions my manager would like confirmation on: 

When a raw material price goes up, does it change the historical cost of the material and any builds it used in?

The average cost of an item is generated by the invoices entered?

Other than editing an invoice, would there be any other things that could change historical balances?

Thanks for your help

Mike_James's avatar
Mike_James
Ultimate Partner
3 years ago

Hi annbrinck , changing the referral source is probably enough to trigger a re-recording of the invoice when you click OK; this will then use the present-moment average cost of stock, which may differ from the cost when the invoice was first recorded. (I haven't tested this type of change myself, but I do know that changing a (non-financial) line description does the same). 

 

When raw material prices change, the historical amounts used in autobuilds will not change; I note that the autobuilds in the item registers did not change between file versions.

 

Prior purchase transaction journals can be changed, in cases where:

- purchase orders are used, and

- receive items are used, and

- the price on the final purchase bill needs to be changed, and

- sales of that purchased stock have taken place before the bill is recorded.

AccountRight regards the cost of sale on such invoices as provisional until then, and will automatically make cost of sales adjustments. These adjustments used to appear as separate inventory journals in v19, but in the current program they are accumulated with the original purchase journal, which is tidy but not auditable.

 

The average cost of an item is recalculated after each recorded transaction (purchase, inventory journal); every sales invoice uses the average cost of stock onhand when that invoice is recorded.  

  • VickiC2012's avatar
    VickiC2012
    Partner
    3 years ago

    Hi Mike_James 

    Sorry i know this is an old thread but i'm having similar issues with auto-build throwing out the inventory reconciliation.

    Am i understanding this correctly  - the unit cost values in the auto build do not update automatically when the average cost of an item is changed ?  If this is the case, is there a way to refresh the unit cost ?

     

    Many thanks

    Vicki

    • Mike_James's avatar
      Mike_James
      Ultimate Partner
      3 years ago

      Hi VickiC2012 , welcome to the forum. Sorry I missed the notification of your post.

       

      I would expect that when an autobuilt item is built, AccountRight will use the current unit cost of the component item. 

       

      The autobuld report should display the latest build cost for the autobuilt item. 

       

      I'm not aware of autobuilds causing the reconciliation to go out of balance; can you provide a worked example, with a screenshot of the relevant inventory adjustment?