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Inventory Control

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Overview

 

You can maintain information about your inventory using this module of Advanced Accounting 7.  In addition to setting up a standard inventory by physical product, you can maintain inventory-type records for "non-inventory" items such as labor, freight, or disposable parts.

 

Advanced Accounting 7 allows you to begin with a few pieces of this information so that you can later expand it to be a full-fledged inventory system when you are ready. 

 

The summary below shows several options for implementing the Advanced Accounting 7 inventory control system:

 

a)If you want no formal inventory control, you can run Advanced Accounting 7 using vouchers and not make use of the sales order and purchase order facilities of the system. 

 

b)If you do plan to use sales orders and purchase orders to reflect your transactions but do not need to track units on hand, then you should assign product codes with prices and sales accounts in Inventory Control.  Mark your product types as N (non-inventory or non-stock).  

 

c)  You can handle a combination of physical inventory items and non-inventory items on sales orders with a standard price associated with each.  (You also have the opportunity to alter the price on any individual sales order.)

 

d)  You can set up a price matrix structure for your inventory.  Use of a price matrix will allow you to assign multiple price levels so that the price level assignment within the customer record can then be used to determine the product or service price to a specific customer.  See the section Using a Price Matrix for more information.

 

e)The Advanced Accounting Sales Order module can use the inventory file to maintain information on backorders and reserving units for specific orders to be filled at a later date.  See the section Using a Sales Order System for more information on these features.

 

f)If you would like to track inventory items for multiple locations, you can keep a count of the units on hand at each site or run each location as a profit center.  Advanced Accounting keeps a separate record of open sales orders, backorder items, reserved items, and purchase orders to be received for each inventory item at a location. 

 

       After you have set up your inventory records, the transactions from other parts of the system are automatically reflected in your inventory history.  In the same fashion, when you make adjustments to the inventory record after you have made a physical inventory, your changes are automatically posted to the appropriate General Ledger accounts.

 

       The Inventory Control system of Advanced Accounting 7 includes the following menu items:

 

       A -        Enter/Chg Inventory

       B -        Print  Price List

       C -        Print Sales/Purchases

       D -        Print Avail/Ord Info

       E -        Print Physical Check

       F -        Print General Info

       G -        Adjust Levels to Phys

       H -        Enter Price Matrix

       I -        Print Price Matrix

       J -        Global Price Change

       K-        Transfer Inventory

       L-        Inventory Movements

       M-        Maintain Master Locations

 

For a listing of on hand inventory and the value of those products use the IC-D, Print Avail/Order Info program.

 

 

Using a Price Matrix

 

Although the price matrix capabilities within Advanced Accounting 7 make it very easy to set up multiple price matrices and several levels to each matrix, this approach will work best for you if you design your pricing strategy beforehand. You can use the different price levels to represent customer types, such as a reseller or a preferred customer. 

 

       The illustration below shows how a customer's price level determines the customer's price for one item that uses a percentage discount price matrix and for another item that uses a price matrix with fixed prices tied specifically to that product.

 

Using IC-A, Enter/Chg Inventory, the computer 386 is assigned to price matrix #1, which has a 10% discount from the base price for any customer using level 2 of this matrix.  (In this example, level 2 is used for resellers.) This kind of matrix can be created while creating the record for the computer, or can be set up earlier using IC-H, Enter Price Matrix).  Next, the inventory record for the laser printer is created, setting up a price matrix that is a series of discount prices.  Level 2 of this matrix again represents the price you would want to offer a reseller.  You can also setup mark-up prices from a base price by setting the matrix level value over 100%.  For example, if your base price for an item was $100 and matrix level 1 was 110% the selling price at that level would be $110.00.  If matrix level 2 was 120% the selling price would be $120.00, etc.

 

When customer information is added or changed using AR-A, Enter/Chg Customers, all resellers are assigned a price level 2. 

 

When  a reseller orders these items, the 10% level 2 discount for the computer and the level 2 price for the printer is automatically reflected on the sales order.

 

Your company may use a different approach for a price matrix; in all cases, plan for all price matrices to operate in a consistent manner with your customer categories.

 

 

Using Multiple Locations

 

Advanced Accounting 7 allows you to maintain independent inventory data for your products at different locations.  The number of locations you may have is limited only by your hard disk space.

 

       The versatility of the locations feature of the Advanced Accounting Inventory system allows it to be used for a variety of applications.  In addition to handling a second or third warehouse or multiple trucks, each with their own inventory, locations can also be set up with distinct G/L account or department codes so that you can use them as profit centers to derive information about the financial performance of each location.

 

       Locations allow you to track the units on hand, units on sales order, units on purchase order, and inventory value for each location in your system.  Price information will apply consistently to an inventory item regardless of location.

 

       You can create purchase orders for a single location only. However, sales orders can have a different location for each line item.  Non-inventory items can be added to any purchase order regardless of the location specified.

 

As with any system-wide feature, you should consider how you name and set up your location codes so that they will be easier to use as your inventory changes or becomes more complex.  The examples below cover three possible situations for handling your inventory:

 

1.You have a single location for all your inventory.

 

2.You have set up your inventory without any location information and then find it necessary to add location information for a few products that will be stored away from your original location.  

 

3.You have units of the same product stored at multiple locations, and you want to set up specific locations as you enter each inventory item in your system.

 

       In all examples, the inventory record is created without entering any information about units on hand, etc.  Instead, use the procedure outlined in Getting Started,  or use purchase orders to update your units on hand.

 

 

       Example 1:  A single inventory location

 

       As you create your inventory items in IC-A, Enter/Chg Inventory, the program will automatically enter a default location field of "blank" (no name).

       

       Your inventory records will all have the same default location and all available/order reports and physical check printouts will automatically summarize the information for the single location.  As purchase orders and sales orders are entered, you should leave the Location field blank. 

 

 

       Example 2:  Adding a second location after setting up your inventory

 

       You are already using Advanced Accounting 7 and followed the procedure above to maintain all inventory information without specifying a location.  However, you are now adding a second location for a few larger items in order to cut down on some shipping costs. 

 

       Use IC-A, Enter/Chg Inventory, and request the inventory record for the item that will now be stored at a second location.  You can locate the record using the F2 list display or standard search keys.

 

       Press ENTER so that the cursor is no longer in the Product Code field, then press the PAGE DOWN key to move to the location information at the bottom of the screen.  Here you will see inventory information for all locations you have specified for the selected product.  (Initially, only one location--the "blank" location--will appear.)  

 

       To add a new location for this product, press the INSERT key.  This will bring up another screen where you can enter a new location, bin, and G/L account codes.  (The G/L account codes will default to those originally entered for this product.)  Use a location name that is short and easy to identify for all employees using the system.  Save the location information when you are finished.  This location will now be available for this product. 

 

       The additional fields at the bottom of the screen (Units on Hand, Units on S/O, Units on B/O, Units on P/O) are display fields only; they will have information to display for this new location once you have received or transferred units and created sales orders for items at that location.

 

       The new location will now appear (along with your default "blank" location) on the list display whenever you can press F2 at a Location field when you are entering this item on a sales order.  The new location name will appear in the master location list when entering a purchase order.

 

       If you have more items that need to be maintained at separate locations, request the next inventory item you wish to modify.  Press ENTER and then press PAGE DOWN to reach the Location fields.  Press the INSERT key and then use the F2 key to request a display of master locations.

 

       The new location you created for your first inventory item above will be displayed, along with the first ("blank") location.  Select the new location from the list, and press ENTER so that the new location information is displayed for this item.   Confirm or modify the account information and press F10 to save the new location information for this inventory item. 

 

       When creating purchase orders and sales orders, any time you leave the Location field blank, the location assignment will automatically default to your original ("blank") location.

 

 

       Example 3:        Setting Up a Multiple Location Inventory System

 

       In this example, you are maintaining separate inventory items at multiple locations and want to ensure that Advanced Accounting 7 reflects these locations accurately. 

 

       Develop short, identifiable names for the locations that will be easily recognized by employees using the system and that will allow a logical range selection for your reports;  for example, if you have two locations in a specific state and would sometimes need summary data based on the state, you would name the two locations using the state ID as the first part of the location code.

 

       When you enter your first inventory item, save the record.  Add a new location for this item as explained in Example 2 above.  Confirm that the account information displayed at the top of the screen is correct, and then press F10 to save the inventory location information. 

 

       You can continue to add new locations for this item, confirming your account codes and then saving each location record. 

 

For the other inventory items, you can use the F2 list display option to select from all the locations you have entered or you can simply enter new locations. Confirm the account information and save the location records for the items. 

 

       With this example, all purchase orders and sales orders should have a location specified to process the order.  Otherwise the default ("blank") location will be used.

       

 

       Using Your Multiple Inventory Locations

 

       Now that you have set up the location for the inventory items, you can use purchase orders to receive items for the new location.  When using PO-A, Enter Purchase Orders, the Location field should have your new location specified for any items to be received there.  You cannot use a location for an item on a purchase order unless you have first specified that location in the inventory record using the procedure summarized above. 

 

       In a similar fashion, you will specify a location for each line in a sales order using SO-A, Enter Sales Orders.  When you request a line item for the sales order, if the product being entered is a regular (stock) type item, and it has more than one location, you will be able to choose the appropriate location.  You can press the F2 key while in the Location field to get a list of possible locations for this item.  The quantity ordered will be removed from units on hand and put into units on sales order for that location.  All backorder tracking and reserve inventory will be maintained separately for each location.  Note that if you do not have enough inventory in one location you can choose a different location for that item or transfer units from one location to another "on-the-fly."

 

       After you have units on hand at multiple locations, there are several facilities within Advanced Accounting which allow you to see the information about a product for all locations:

 

·When viewing the inventory record in IC-A, press PAGE DOWN to get the inventory location listing.  You can quickly scan all summary information about locations and then return to the inventory entry screen.

 

·IC-D, Print Avail/Ord Info, IC-E, Print Physical Check and IC-G, Adjust Levels to Physical allow you to view inventory information reflecting multiple locations.

       

·IC-M - Maintain Master Locations allows you to create new locations or remove existing locations and update existing products.

       

               ·        To move inventory from one location to another, use IC-K, Transfer Inventory to subtract from the units available for sale and add the amount to another location.

 

 


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