Could SAP B1 handle " Periodic inventory System " ?

[Former Member]

if SAP can handle Periodic inventory system, how to do this ?

[Former Member · Accepted solution]

hi expert,

really thanks for your suggestion.

after uncheck " perpetual inventory system", there is no effect on Stock a/c and closing stock a/c.

so, how can SAP B1 handle periodic inventory system ?

it seems only ignore the inventory accounting impact from stock transaction.

all the effect on Stock a/c and closing stock a/c. have to handle by the end-users out of SAP ?

[Former Member · Accepted solution]

Hi Jamesss,

Periodic inventory is a system of inventory in which updates are made on a periodic basis. This differs from perpetual inventory systems, where updates are made as seen fit. In Periodic Inventory System no effort is made to keep up-to-date records of either the inventory or the cost of goods sold. Instead, these amounts are determined only periodically-usually at the end of each year.

As the inventory records are not updated as transactions occur, there is no need of Inventory Subsidiary Ledger. The foundation of the periodic inventory system is the taking of a complete physical inventory at year-end. This physical count determines the amount of inventory appearing in the balance sheet. The cost of goods sold for the entire year then is determined by a Short Computation.

Journal Entries

When Company is the Buyer

Credit purchase of Inventory

Purchases Dr XXX

Accounts Payable CrXXX

Payment of Freight Cost

Freight-In DrXXX

Cash Cr XXX

For a return to supplier

Accounts Payable DrXXX

Purchase returns and Allowances CrXXX

Payment of bill to supplier

Accounts Payable DrXXX

Cash CrXXX

Purchases Discounts CrXXX

When Company is the Seller

Note:Cost of goods sold is deal with in the Cost of Goods Sold section of the income statement at the end of the accounting period. Adjusting Entries are made to adjust ending inventory for items sold.

Sale to customer on credit

Accounts Receivable DrXXX

Sales Revenue Cr XXX

Customer returns to seller.

Sales Returns and Allowances DrXXX

Accounts Receivable Cr XXX

Customer pays off bill With in discount period

Cash Dr XXX

Sales Discounts Dr XX

Accounts Receivable Cr XXX

Customer pays off bill After discount period

Cash DrXXX

Accounts Receivable Cr XXX

Cost of goods sold is deal with in the Cost of Goods Sold section of the income statement at the end of the

[Former Member · Accepted solution]

thanks for your help !!

[Former Member · Accepted solution]

Hi James

Transactin wise accounting entries is understand.

Posting of account entries for Stock Value at end of each period, you didn't mentioned .

Is these entries below are correct for posting of stock values

Creation of GL A/c Code for Opening Stock a/c in Expenditure Drawer code 500000

Creation of GL A/c Code for Closing Stock a/c in Revenu Drawer code 400000

Creation of GL A/c Code for Stock a/c in Asset Drawer code 100000

When posting of Opening balance :-

Directly posting to gl code 100000

JE: Stock a/c code 100000 Dr

To Opening Balance A/c Cr

When Periodic Stock Post:- on Being date of period

JE Opening Stock a/c code 500000 Dr

To Stock A/c code 100000 Cr

When Periodic Stock Post:- on Closing date of period

JE Stock a/c code 100000 Dr

To Closing Stock a/c code 400000 Cr

If above entries are corect, When generating P&L at the end of year, Opening Stock and Closing Stock Values are accumulating Balance will show in P&L a/c

Prasad

[Former Member]

Hi Jamesss,

SAP B1 can handle Periodic inventory system, for this keep uncheck "Use Perpetual Inventory" in Administration->System Initialization->Company Details. So automatically other options will deactivate accordingly.

Regards,

Sachin