Advanced Inventory Features and Troubleshooting

Background
Messages Received When Attempting to Record Sales and Purchases
Automatic Cost of Sales Adjustments
Negative Inventory
Serial Numbers
Locations
Other Inventory Messages

Background

This support article covers troubleshooting different messages you can receive while attempting to record transactions that effect inventory in the software (sales and purchases) and the major causes for these messages. It will also cover some of the frequently asked questions regarding how inventory in AccountEdge works.

Messages Received When Attempting to Record Sales and Purchases

This purchase of item X would leave you with No Items on Hand and a Non-Zero Value in Inventory

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This message indicates that when you are attempting to adjust the value on a purchase. It occurs because you can't have zero of an item in inventory but have a value associated with the item.

You can resolve this by creating an inventory adjustment to add additional quantity to the item, making the change, and then by adjusting the inventory back down to the correct level.

As an example, I can cause this message to occur by:

  1. Create a Bill for one of Item X at $25.00
  2. Create a Sale for Item X
  3. Create a Bill for Item X at $25.00
  4. Create a Sale for Item X
  5. Edit Bill #2 amd change the cost of Item X from $25.00 to $35.00

I can resolve this by:

  1. Create an inventory adjustment for Item X to raise my inventory quantity and value
    adv_inv_2.png
  2. Edit Bill #2 and change the cost of item X from $25.00 to $35.00
    adv_inv_3.png
  3. Create an inventory adjustment for Item X to reduce my inventory quantity and value
    adv_inv_4.png

This will result in having the correct number (0) of the item and the correct value ($0.00) of the item.

adv_inv_5.png

Deletion of this purchase of item X would value your inventory at less than $0.00

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This message indicates that by deleting this purchase the value of the item would drop into the negative. You can't have an item with a negative dollar value.

As an example, I can cause this message to occur by:

  1. Create a Bill for one of Item Y at $15.00
  2. Create a Sale for Item Y
  3. Create a Bill for one of Item Y at $115.00
  4. Edit the Sale for Item Y (change date, put a period in the notes field, etc - it just needs to be re-recorded)
  5. Attempt to delete the Bill for Item Y of $115.00

I can resolve this by:

  1. Create an inventory adjustment for Item Y to raise my inventory quantity and value
    adv_inv_7.png
  2. Delete Bill #2
  3. Create an inventory adjustment for Item Y to reduce my inventory quantity and value
    adv_inv_8.png

Automatic Cost of Sales Adjustments

If you use the Receive Items feature of AccountEdge it's possible that you will see AccountEdge making automatic cost of sales adjustments in the Inventory Journal. The Receive Items feature allows you to receive inventory without recording a bill (for instance, you would use this if your Vendor had sent you half an order but won't bill you until the order is complete).

Until the Purchase Order is converted into a Bill the cost of the item isn't fixed. As an example, I could receive against my original Purchase order with a value of $10.00 per unit, but when I actually get the bill for the items the cost could be raised to $15.00 per unit. If I've sold some of these items in the mean time (before converting from a Purchase Order into a Bill), they've been sold at a lower Cost of Sales dollar value.

To deal with this, AccountEdge will make an automatic Cost of sales adjustment for $5.00 (per item sold) to account for the discrepancy between the value on the original PO and the value on the Bill.

To avoid these Cost of Sales adjustments you should convert your Purchase Orders into Bills directly (rather then going through the intermediary step of receiving the items) as this will automatically receive the items and will lock in a set cost.

Negative Inventory

By default, AccountEdge does not allow you to sell more of an item than you have. If you attempt to you will be asked to either backorder the item, build the item, or purchase more of the item.

There is an option to allow you to sell into the negative. That being said, turning this option on invites in a host of other problems. It can result in the same sort of Cost of Sales adjustments that you see when you receive items without creating a bill. It can make it harder to get accurate inventory numbers and dollar values.

If you do turn on negative inventory you can not turn this preference back off until you bring your inventory levels back up to zero.

Serial Numbers

Beginning with AccountEdge 2015 we introduced a Serial Number tracking feature. This feature allows you to associate serial numbers with an item and they can also be used to track warranty information for specific products. Serial numbers are associated with items on a 1 to 1 basis - so for every sale I make of an item I need to have a new and different serial number.

When you create an item you can choose to track serial numbers under the Profile tab of the item.

When you purchase an item, sell an item, build an item or create an inventory adjustment you can assign and create serial numbers that will be associated with that transaction.

You can then search for this serial number to find any transactions associated with it. You can also see any serial numbers associated with an item under the Serial Number tab of the item information.

Locations

Locations in AccountEdge are a way to track where you have different inventory items. As an example, if I have both a store and a warehouse I would set up two locations so that I could have accurate inventory counts for each location.

Locations should only be set up for different locations you actually own and control - you do not need to set up locations for your Vendors or Customers.

Once you add a second location you will need to start identifying on your transactions (sales, purchases, inventory adjustments) from which location the inventory is being added or removed.

Other Inventory Messages

Deleting this [item] will result in a positive on-hand quantity, and a negative value in inventory.

You'll receive this message when you're trying to delete the sale of an item, where the cost (value) of the item has changed in a positive direction. That is, the cost (value) of the item has increased.

Three conditions are required to have created this situation:

  • You have selected the Inventory Preference to Allow the Sale of Items with Insufficient On-hand Quantities
  • The the cost (value) of the item has increased after the sale you are trying to delete
  • A subsequent sale of the item resulted in a negative on-hand quantity and a negative value in inventory

To resolve this situation and delete the sale, the value of the item needs to be reduced. Once this is done, the sale can be deleted. And, once the sale is deleted, the value of the item can be reset to the current actual value with the current actual on-hand inventory count. (The instructions assume you have a negative on-hand quantity and a negative value in inventory.)

  1. Create a backup of your company file
  2. Find the sale in the Transaction Journal, under the Sales Tab
  3. Make a note of the Cost of Sales as a result of the sale
  4. Divide the Cost of Sales by the number of units being sold. This will give you the unit cost of the item when the sale was recorded. Record this number
  5. Look at the Item Information screen for the item. Note the on-hand quantity and current value
  6. Multiply the number obtained in Step 3 by the on-hand quantity obtained in Step 4, as a positive number. That is, if the on-hand quantity is -1, use 1. If the on-hand quantity is -5, use 5. Record the result
  7. Subtract the number obtained in Step 5, from the current value obtained in Step 4, as a positive number. That is, if the current value is ($10.00) use $10.00. Record this number.
    Create an Adjust Inventory entry, entering the item number, correct location (if used), and Account. In the Amount field, enter the value obtained in Step 6. Leave the Quantity and Unit Costs blank
  8. Delete the sale
  9. Create an Adjust Inventory entry, entering the adjustment value in the Amount field, leaving the Quantity and Unit Cost fields blank. The objective here is to set the correct value for the (updated) on-hand quantity