How Your Inventory Asset Accounts Get Askew

In AccountMate LAN, General Ledger, Inventory Control by Kevin Stroud

Dear AccountMate Clients,Superhero in red cape and mask says see your inventory like you have x-ray vision!

Here at NexLAN we’re always beating a drum on the importance of Validating the Balance Sheet—confirming asset and liability accounts with the corresponding reports in the subsidiary modules as detailed in our Period End Closing Outlines—and one of the toughest parts of that is Taming the Inventory Asset Beast. So how to find the transactions throwing them out of sync?

Before we get to that part—a quick note about the importance of using the built-in Accrued Received Goods (ARG) functionality for your physical inventory. It’s a powerful feature not found in entry-level accounting software that debits your inventory asset immediately upon PO Receipt and credits an ARG liability account (which later gets picked up during AP Invoice entry) and, simply put, without using the ARG functionality your inventory asset accounts will NEVER be in sync. So, if you don’t have a good handle on this part, then please give us a call and we’ll chat.

However, if you have a good understanding of ARG and it’s implemented in your system, but your inventory asset accounts STILL get out of sync, then… how does it do that? Four common ways:

  1. Inventory items set to NOT update onhand, but their inventory account set to your asset: Items which don’t update their quantity onhand don’t show on the Warehouse Quantity Listing, but that’s the best report to show your onhand inventory value. So, if you’re debiting your inventory asset account, but the transaction isn’t reflected on the Warehouse Quantity Listing, then you’ll be out of sync.
  2. Inventory items set to update onhand, but their inventory account NOT set to your asset accounts: The converse of #1, inventory transactions are reflecting changes in quantities on your Warehouse Quantity Listing, but not to your inventory asset accounts.
  3. Vendors set to NOT accrued received goods, but POs being entered/received for items which update onhand: If a vendor isn’t defined to “Accrue Received Goods” on the Settings tab of <Maintenance><Vendor>, then PO Receipts aren’t impacting your inventory asset account, but for items which update onhand they should. You don’t have to have EVERY vendor set to ARG (wouldn’t make sense for your electric bill), but you do for all vendors you purchase inventoried items from.
  4. AP Invoice directly hitting the inventory asset account: Once you’ve implemented ARG functionality and are validating your inventory asset accounts, then the golden rule is, “Thou Shalt Not Hitteth Thy Inventory Asset Accounts from AP Invoice Entry!” To do so would to impact that GL asset account without changing your Warehouse Quantity Listing, and immediately throw them out of sync. Yes, I understand sometimes your vendor invoices you at a different cost than what your PO was received at—the built-in Cost Variance functionality will handle that (in a GL account where you can keep an eye on how reliable your purchasing agent and vendors are at costing) and your inventory asset accounts will stay in sync with the Warehouse Quantity Listing.

We’re definitely “in the deep end of the accounting pool” here so, again, don’t hesitate to contact us if you’re interested in having ACCURATE monthly financials—and what can be better than that?

Oh yeah, and we even have handy database scripts written to quickly identify all four of the situations described above so the cleanup is quick and easy if you’re currently out of sync!

Regards,

Kevin E. Stroud
NexLAN, LLC
https://nexlan.com

AccountMate/LAN V10.2 Has Shipped

The AccountMate/LAN platform is completely based on Microsoft Visual FoxPro (screens, reports and database) and continues to be a good choice for small businesses who need the flexibility of available source code but don’t have the volume of transactions to warrant a SQL Server database.

The latest release, V10.2, shipped in June—and we’ve already put copies of the “What’s New” document and installation media in the mail to our clients with active Lifecycle plans running the LAN platform.

Don’t forget the webinar to present the features will be Thursday, July 9th, from noon to 1:30pm CDT.  Register here: AccountMate/LAN V10.2 New Features Webinar.


AccountMate Payroll Training Class

I’ve spoken with several attendees of the online Core Product Training class held last month and they enjoyed the convenience and comfort of the online format immensely. The upcoming Payroll class, scheduled for September 16-17, will also be online.

Complete details aren’t released yet, but if you run AccountMate payroll in-house then don’t miss it.

And if you don’t run AccountMate payroll in-house… well, why not? It’s fully functional, flexible and integrated (i.e. no more journal entries or manual entries to Bank Reconciliation). With training in September, there’s plenty of time to get this implemented by January 1st—when there won’t be YTD balances to port in!


Tech Note: Understanding the Company Access Lock Feature

Some AccountMate processes—including period-end closing, adding or editing custom fields, and product update installation—require exclusive access to the company database. Setting the Company Access Lock is a handy tool at your fingertips to prevent users from accessing or logging into a company.
Full details are published in our Article #1294: Understanding the Company Access Lock Feature, including how to activate, use, and deactivate the feature.

Tech Note: How to Set Up and Use a Check Signature Image

Use of digital signatures on checks has become more common than manual signatures. The Signature Image feature in AccountMate allows you to set up, maintain and delete signature image records for use in either the Accounts Payable or Payroll custom checks. Knowledge about this feature may help you maximize its use; thus, saving the signatories’ time and making the image accessible only to authorized users.
Please see our Article #1295: How to Set Up and Use a Signature Image in AccountMate for file requirements, the procedures to set up and use a signature image, as well as the signature image positions for each check layout.

Technical Tips

Versions: AM11.2 for SQL and Express

Module: AP

Tip: Starting in AccountMate/SQL V11.2, the AP Post Credit Card Billing function allows copy and paste from Excel into the Transactions grids. You can copy and paste from Excel credit card billing transactions for all the columns in the upper grid and lower grid in the Transactions tab. This can be helpful when dealing with numerous credit card billing transactions that have multiple GL distributions. This feature provides a quicker way to record credit card billing transactions and minimizes data-entry mistakes.

When preparing data in Excel, you must arrange the columns in the same order as they appear in the Post Credit Card Billing function. In the upper grid, the Excel information should include the following:

  • Trs Date (required)
  • Vendor # (required)
  • Company
  • Invoice
  • Trs Description
  • Amount (required and cannot be zero)
In the lower grid, the Excel information should include the following:
  • GL Distribution Accounts (required)
  • Line Item Description
  • Amount (required)
Perform the following to copy the information from Excel:
  1. Open the Excel file and select the data to be copied.
  2. Right-click on the screen and select the Copy option.
  3. In the Post Credit Card Billing ► Transactions tab, right-click anywhere on the credit card transactions grid (upper grid) or GL distribution grid (lower grid).
  4. Select “Paste from Excel” in the pop-up menu.
Notes:
  • When the Invoice # is not provided in the source data, AccountMate will automatically generate an Invoice # when the transaction is saved.
  • The Amount must not exceed the invoice maximum chargeable amount.
  • The payment for the invoice must not be on-hold.
  • The invoice must not yet be fully paid.

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Versions: AM11 for SQL and Express
AM10 for SQL, Express, and LAN
AM9 for SQL, Express, and LAN
AM8 for LAN

Module: PR

Q: We have some employees for which the SDI withholding tax is not calculated. Why?

A: SDI withholding taxes will not be calculated if any of the following conditions exist:

  • The employees’ SUTA State in the Employee Maintenance ► W-4 Info tab is not CA, HI, NJ, NY, RI, and PR. Only these states are mandated to withhold disability insurance.
  • The SDI checkbox is not marked in the Employee Maintenance ► W-4 Info tab.
  • The Maximum SDI Wages has been reached. Access the State Tax Tables Maintenance to verify Maximum SDI Wages.
  • The employee has a deduction code that is set to reduce the SDI withholding tax and the deduction amount is the same as the employee’s gross wage for the payroll period.

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Versions: AM11 for SQL and Express
AM10 for SQL, Express, and LAN
AM9 for SQL, Express, and LAN
AM8 for LAN

Module: AR

Q: What report should I generate in AR to verify the Customer Deposits GL Account ID balance?

A: Run the Open Credit Report and select Payments Only to get the information you need.

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Versions: AM11 for SQL and Express
AM10 for SQL, Express, and LAN
AM9 for SQL, Express, and LAN
AM8 for LAN

Module: AR

Q: We need to record an open credit for a customer for which the paid invoice was incorrect due to overpricing. The overprice must be displayed as a deduction in the Gross Profit Margin report. How do we record the open credit?

A: Record the open credit by creating a sales return. To do this, perform the following:

  1. Access the Revenue Code Maintenance function and create a revenue code intended for the transaction. Since this transaction is not a real return and should reduce sales revenue, enter in the Sales Returns field the GL Account ID for Sales Revenue assigned to the original transaction (to reduce the original sales revenue recorded for the overpriced item).
  2. Access the Create Sales Return without Invoice function.
  3. Add a non-stock line item in the Line Items tab.
  4. Accept the default Return Qty (i.e., -1).
  5. Enter the price difference in the Unit Price field (original unit price (overprice) in the invoice less the correct unit price).
  6. Enter in the Line Item Details tab the revenue code created in step 1.
  7. Perform steps 1 through 6 again if the offending invoice has more than one line item.
  8. Review the invoice total; then, save the invoice.
  9. Generate the GL Transfer Report to verify the journal entries created for the transaction (i.e., Dr: Sales Revenues, Cr: Accounts Receivable).
  10. Run the Profit Margin Report to verify the profit and % of margin.

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