IN Inventory Codes window

InventoryCS > Inventory > Options menu > IN Inventory Codes window

You must establish Inventory Codes before you set up stock items. Inventory Codes allow you to organize your inventory items into different categories for a variety of reasons, such as valuation methods, item types, or any other categorization you choose. An Inventory Code is attached to the record of every Inventory stock item.

You must have more than one Inventory Code if you have more than one Inventory account in your General Ledger, or if you have some items that use different valuation methods.

NOTE: If you have General Ledger installed and integrated with Inventory, then you are required to enter account numbers in the various General Ledger account boxes to save the code.

Inventory Code

Enter an Inventory Code up to six alphanumeric characters.

Description

The description is used to help identify this code The description appears in IN Code Lookups and on some Inventory reports.

GL Control Acct

When items using this Inventory Code are bought or sold, this is the General Ledger Inventory asset account the transaction will post to. If Inventory is integrated to General Ledger, you must enter an account. If Inventory is not integrated to General Ledger, the Lookup for this box will not be available and an account is optional.

GL Adjustment Acct

Enter the account you want to post inventory adjustments to.

If an item is oversold, the Cost of Goods sold account is debited using an estimated cost based on the last cost. When the item is purchased/received and invoiced, the difference between last cost and actual cost is posted to this account.

If Inventory is integrated to General Ledger, you must enter an account in this field. If Inventory is not integrated to General Ledger, no account Lookup is available and you can leave this field blank.

GL Variance Acct

The difference between the actual cost and the standard cost will post to this account. This can be a special expense account for accumulating variances.

NOTE: This is used only when you use the Standard Cost inventory valuation method.

If Inventory is integrated to General Ledger, you must enter an account here. If Inventory is not integrated to General Ledger, the Lookup for this box will not be available and an account is optional.

The variances between the actual and standard costs will automatically post and will accumulate until you purge the accumulator. You can purge the variance accumulator during Period End processing.

GL Misc Charge Acct

If an item includes an amount in the Misc Charge box in the IN Stock window, this account is affected when the item is sold. Miscellaneous charges are optional and are specified on an item-by-item basis when you enter your inventory item master records.

Miscellaneous charges includes things like an excise tax on tires, a royalty fee on a publication, or a dealer prep fee for assembling a bicycle.

GL Cost of Goods Sold Acct

When you sell Inventory items, the cost of the items is recorded in this account. If you oversell an item in the Sales module, this is debited with the cost of the item based on the last cost. The cost of the items sold during the year appears on the income statement as a deduction from the net sales of the year.

If you use the Interface Table, this field will not appear.

Taxable

The Taxable check box is used to indicate that some or all of the items with this Inventory Code are taxable. You can override this default when the items are sold.

Do not select this check box if the items associated with this Inventory Code are never taxable.

Default Tax Code

If the Use Header Tax Code for all Detail Lines check box in Module Preferences is unchecked, the Sales module will use the Sales Tax Code entered in this box as the default Sales Tax Code for items with this Inventory Code.

If you leave this box blank, the default Sales Tax Code will be set from the Sales module during transaction entry.

If you do not have the Sales module installed or are not using it, you can leave this box blank.

If you use AvaTax for automated sales tax calculation, this field is hidden.

Tax Code From AvaTax

This field is only available if you are integrated to AvaTax. Enter the AvaTax Tax Code you want to use with this Inventory Code.

If you leave this field blank and the stock item does not have a Tax Code assigned, the default AvaTax Tax Code is used.

Valuation Method

You can choose from four different valuation methods: FIFO, LIFO, Weighted Average, or Standard Cost. The methods determine how the cost of goods sold will be updated as items with this Inventory Code are sold. Select the appropriate valuation method for items with this Inventory Code.

FIFO

This method assumes that the first item you receive will be the first item sold. It is also referred to as “First In, First Out.” This is the default valuation method.

LIFO

This method assumes that the last item you receive will be the first item sold. It is also referred to as “Last In, First Out”.

Weighted Average

This method uses the average cost of all like items in stock. The average cost is determined by taking the total amount paid for all items in stock and dividing it by the number of items in stock.

Standard Cost

Standard Cost can be used when items have a predetermined value or unit cost. This can be useful for planning and control purposes.

You can enter the standard cost for each stock item in the Stnd Cost box on the Qty/Price Info tab of the IN Stock window.

For example, in a manufacturing environment, the Standard Cost method can be used to plan or to highlight any drastic variation in the actual cost of stock items.

Post Standard Cost Variances at time of:

There are two options available for when variances between actual cost and standard cost are posted: at the time of purchase and sale, or at the time of sale only. When a variance is posted, it is posted to the account entered in the GL Variance Acct box. These options are only active if this Inventory Code is using the Standard Cost valuation method.

Purchase and Sale

Use this option to calculate the Standard Cost variance at both the time of purchase and the time of sale. This means that the actual cost will be tested against the Standard Cost when the stock item is purchased and the variance will be posted at that time. The actual cost will again be tested against the Standard Cost at the time of sale. Generally the variance will not change between purchase and sale unless the Standard Cost has been updated since the stock item was purchased.

If an item is added through a module other than Inventory, it posts to Inventory at standard cost and the amount that posts to the variance account is the difference between the standard and actual costs. If an item is returned through Sales, the amount that posts to the variance account is the difference between last cost and standard cost. If an item is added through Inventory, it posts at actual cost and nothing posts to the variance account.

If an item is subtracted through a module other than Inventory, it posts at weighted average cost and the amount that posts to the variance account is the difference between weighted average cost and standard cost. If an item is subtracted through Inventory, it posts at weighted average cost and nothing posts to the variance account.

Sale Only

Use this option to calculate the Standard Cost variance at the time of sale only. The variance between the actual cost and the Standard Cost will then be posted to the variance account.

If an item is sold through a module other than Inventory, it posts to Inventory at standard cost and the amount that posts to the variance account is the difference between the weighted average cost and the standard cost. If an item is subtracted through Inventory, it posts at weighted average cost and nothing posts to the variance account.

Variance Amount

The Variance Amount displays the total variance posted for all the stock items with this Inventory Code. This number can be cleared if you clear the variance amounts (see Clearing Variance Amounts).