Use this guide to help you analyze the Inventory Value Report. To learn how to generate this report, see Inventory Value report
- The displayed G/L value is for the “default” Inventory G/L account, usually branch #01. If you maintain multiple warehouses, the individual Inventory G/L account balances must be combined.
- Active and non-stock items show on hand quantity, cost and value.
- Negative quantity items display on hand negative quantity and cost, if selected by the user
- Customer Consignment warehouses are included because the stock is owned by you until the customer sells it.
- Vendor Consignment warehouses are not included because the stock is owned by the vendor until you sell it.
- Returned Goods warehouse items are included because the stock remains owned by the company until returned to the vendor on a negative PO.
- Drop Ship warehouse items are not included. Ideally, the balance in this warehouse is zero, to match the Drop Ship Inventory account.
Following is a sample of the automatically produced Inventory Value Report for All Warehouses. At the time of the monthly close of A/R and A/P, the system will export the current levels of inventory to an Excel (.xls) file. This content is available on your DDI server:
D: > IBM > ACCOUNTS > DDI > EOM.REPORTS
For more information on the end of month close, please refer to End of Month Close Process.
Inform provides a summary at the end of the Inventory Value Report to assist with the reconciliation of physical value and financial value.
Balance in the default Inventory G/L account
Value of items in stock, but not booked to the G/L
Difference b/w purchased and sales-invoiced costs
Value of positive-quantity tangible items on hand
Value of negative-quantity tangible items on hand
G/L Value used to make the comparison to stock
Net value of positive and negative items on hand
Calculated difference b/w G/L and Stock values
- G/L Inventory Value: current balance of default Inventory G/L account. There may be more than one inventory account if you have multiple locations or warehouses. If you maintain more than one branch, the report balance is for the main branch only. There may also be more than one inventory account if you maintain product line G/L inventory value. Consideration must also be given to balances in Drop Ship Inventory and Non-Inventory accounts if those balances are attributable to inventory.
- Un-Invoiced PO's: value of Stock Receipts not linked to an A/P invoice. A PO is considered un-invoiced for the period of time between receipt of merchandise into the stock system and entry of the vendor invoice into the accounting system. These amounts are included in the Inventory Value Report but not in the G/L balance. Care must be taken to properly link the PO to its A/P invoice in order to remove it from un-invoiced status.
- It is important to review the Un-Invoiced PO Report regularly to ensure that items do not remain in un-invoiced status for long periods of time. Un-Invoiced PO's that have already been paid to the vendor outside the system recommended process will artificially inflate the adjusted G/L Value and contribute to inventory differences.
- Invoice Average Cost Variance: monthly aggregate total of the difference between received A/P cost and invoiced S/J cost of items sold in current period. The Inventory Value Report uses purchase received cost and the G/L uses sales invoiced cost. If an item is sold before its A/P invoice is linked to the PO, and the cost has changed, a variance will be generated to make up the difference between the already booked selling cost and the newly booked purchase cost. This calculation is valid for users of C2 Average Cost only. Inform Version 17 eliminates this calculation and posts a real time variance for C2 Average Cost users.
- Total Adjusted G/L Inventory Value: sum of the above values.
- Inventory Value per this Report: value of all positive quantity items on hand. Items with negative quantities and consumables are ignored and must be subtracted from this calculation.
- Negative Inventory Value: value of all items displaying negative quantities.
- Total Inventory Value: net of positive and negative stock.
- Inventory Difference: variance between Total Adjusted G/L Value and Total Inventory Value.
- Product Line G/L Distribution – the ability to separate asset value, sales and cost of goods sold by Product Line exists within the system. If there are multiple inventory asset accounts for different Product Lines, the Inventory Value Report will display only the value of the G/L Control Table default Inventory G/L account. The remaining account balances would then need to be manually added to the G/L value.
- Producing an Inventory Value Report for all warehouses excludes negative-quantity items from the body of the report.
- Producing the report for all warehouses excludes values in the Drop Ship Warehouse.
- Producing the report for a single warehouse includes negative-quantity items with an extended value of zero.
- The value in the Drop Ship warehouse is available only by requesting it separately. It is not included on printed or exported reports produced for all warehouses.
- FIFO users must produce an Inventory Value Report separately for each warehouse. The same logic applies to customers using separate costing by warehouse.
- The G/L account balance displayed on the Reconciliation Summary is the balance in the default Inventory account, as specified in the G/L Control Table. Multi-branch users will need to apply individual branch driven balances to their report calculations.
- The Reconciliation Summary is not exportable to Excel.