Stock Taking After 2 years going live

[Former Member]

Due to various reasons, after 2.5 years of going live, we are finally doing a inventory count in our warehouses.

What makes this more complex is that, in one of the warehouses, we have been selling a lot of the inventory but using a POS not integrated into SAP. Thereby the inventory has accumulated in SAP B1 but only in the computer record. The revenues however have been recorded in the proper Revenue account using gl entry.

Therefore, i want to confirm our method to clean this up:

Step 1: Do an inventory count per warehouses and load results into SAP Inventory Tracking or load it via oStocktaking (we have done that)

Step 2: Post Inventory using Item Cost per warehouse

Step 3: Using Inventory in Warehouse report to check that the value of inventory and at each item is correct per warehouse

Step 4: Using the dollar value of inventory, adjust the Inventory Acct for that warehouse using a journal entry

By doing the above, going forward, we will at least have synchronized values in the Inventory acct to match the value which the Inventory in Warehouse report shows.

Thanks for reading and helping out.

Mike

[zal_parchem2]

Mike - suggestions for you...

1. After 2.5 years, it might be good to have a special GL account set up to capture the exact profit/loss incurred due to the fluctuations in the inventory. I would suggest you get a really good sign-off and understanding of what/how the reporting of this will be with your accountants before doing this in production. Having been in the finance area for several years, auditors are sort of nervous about accumulated postings like this.

2. Complete the adjustments for the inventory changes on a weekend so that you can isolate all of those "ST" transactions you will be doing by running Inventory Reports (i.e., Inventory Audit Report). Another good point for the auditors years down the road. And YES, someone will be scurrying around years from now trying to figure out the whys of this.

3. And this is just business kind of stuff, but maybe set up some cycle counts so at least your "A" from "ABC" items are counted on a more regular basis. Gordon is correct - it may not be your responsibility to do the actual work but you should mention that this definitely needs a bit more attention in the future in your company.

Good Luck - Zal

[Former Member]

In that case, all steps are acceptable. However, in two years the wrong inventory information is not good for your business. Hence, it should be avoided in the future. Which province are you in Canada now?

[Former Member]

I am based on Ontario. But off and on, I check in with some work I am doing for a very small non profit in Georgia.

[Former Member]

Mike,

It looks ok but I am not sure why you need step 4. Please explain. Have you posted the count through Stock Posting?

Thanks,

Gordon

[Former Member]

This is till being tested in test.

Yes I am using Stock / Inventory Posting where I make the inventory offset Dec/Inc account field input to be my inventory offset inc/dec GL account.

I suppose what you are saying is to specify the relevant inventory account to be adjusted right there in that step instead of having to adjust that inventory gl account in step 4 thus having to execute step 4.

It is just that after doing the first three steps, I noticed that the inventory value running the Inventory in warehouse report did not match the dollar value of inventory in the GL inventory account.

As such I included step 4 to force it to match.

Historically there were some items sold where the inventory accounts were fairly wrong over the past two years.

I hope that helps to answer your question Gordon.

Thanks,

Mike