Non-Financial Accounts - How this category works?

Sage 100 ERP

Sage 100 ERP
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Non-Financial Accounts - How this category works?

  • I have problems with inventory reconciliation.we never reconciled inventory but now I am planning to do an inventory reconciliation but I am not sure how to handle the opening balance differences.Is it a good idea to use non-financial accounts, how these accounts works? Suppose I am debiting non financial account and crediting a regular account in this case the financial reports wont show the non-financial but it will show the regular account right? What is the offset account for this non financial account?

     

     Thanks in Advance

     

    Deepu Thomas

     

  • Deepu,

     

    If you are trying to reconcile your inventory, you are in need of a FINANCIAL transaction.  Forget about the non-financial.  When you say inventory is not reconciled, I assume you mean that the Inventory Trial Balance (a report in the Inventory module) does not balance with the inventory account(s) in the general ledger.  If this is the case, you should perform a physical inventory to assure that your inventory valuation is correct in the IM module.  Then you should post an adjustment in the general ledger to the inventory account to make it agree with the Inventory module.  The offset generally goes to a cost of goods sold account.  If the adjustment needed is very large, you may want to capitalize this adjustment over a period of several months, or, in part, to a prior year.

     

    If you are an IT person working with MAS, I would suggest getting together with your accounting staff.  If you on the accounting staff, I would suggest beginning a dialogue with your outside accountant.

  • We started our business from 2005 and never reconciled our inventory ( I am speaking about the Itemzied reconcilation of Physical stock in our Warehouses to MAS 90 not module to moudule reconciliation) The opening difference is huge, so I cant off set this to COGS if I do COGS will show negative balance and increase our current profit.

     

     

     

    Thanks in Advance

    Deepu Thomas

     

     

     

  • Deepu - sounds like it is time for the accountants take over & make the financial decisions of how those accounts get posted.
  • Ditto to Maureen's remark.  While there are many resellers that are CPA's or have accounting backgrounds, this forum is meant to provide advice on improving the functionality of MAS 90/200.  What you are asking for is accounting advice that should be coming from your CPA.
  • You will have to affect the profit when you reconcile your inventory.  There is not really any way around it.  You can either make the necessary adjustments and take the hit now - however you want to define it, or you can do inventory adjustments with a zero value for the "found inventory", at which time you will see higher profits when the zero cost inventory is sold.  Likewise, if you are missing inventory, you have to take the loss.

     

    The bottom line is that if you have inventory you didn't know you have, that is "found value" - hence the profit.

     

    Have you reconciled purchase clearing?  That is where some of these discrepancies can originate.  Also, you should run an inventory valuation report at the end of each month and compare to your GL.  They should be the same.

  • Well, there is another option.  If you have never reconciled inventory, some of the offset to COGS belongs in a prior year (or years).  This would involve an adjustment directly to retained earnings.  That is why I suggested talking to your outside accountants.  This is something you should have a clear understanding before you make the adjustment.  They can also help you determine HOW MUCH should go into this year and how much should go into prior years.  I would also suggest spreading the current year portion out over several months so that no one period takes the total hit.  After all, in reality that is what should have happened and would have happened if you were reconciling inventory on a monthly basis.