From Orders, select Set up module, and click
Inventory Options
Generate Cost of Goods Sold - Enable to track the cost of the products you sell. The cost of the products sold posts to the Inventory and Cost of Goods Sold accounts during the Invoice orders process. The Valuation Method field displays when you enable the Generate Cost of Goods Sold option.
Valuation Method - (Displays when the Generate Cost of Goods Sold option is enabled) Select the method you want to use to value your product inventory:
Average unit cost is calculated by dividing average total inventory cost by inventory on hand. Average total inventory cost is calculated using a two-step process:
A product's inventory on hand is recalculated each time products are invoiced. A product's average unit cost and average total inventory cost are recalculated each time inventory transactions are posted. The Product_Inventory.AVERAGE_COST field updates upon invoicing.
When you invoice a product order, the product's average unit cost is calculated according to the product quantity on hand and the average total product inventory cost. This average total inventory cost can change every time you post an inventory transaction.
For example, if you post inventory receipts for an individual product at a cost of $10 and $15 per unit, the total inventory on hand is two units, the average total inventory cost is $25, and the average product cost is $12.50. If you then sell one product and invoice the order, the total inventory on hand is one unit, the average total inventory cost is $25, and the average product cost is $12.50.
However, if you then post another single product receipt for $15, the total inventory on hand is again two units, but the average total inventory cost and average product cost will be different: The average total product inventory cost will be $27.50 and the average product cost will be $13.75.
To calculate the average total product inventory cost, subtract the total average product cost of the invoiced products ($12.50) from the average total product inventory cost ($40 - $12.50 = $27.5). To calculate the average product cost, divide the new average total product inventory cost ($27.5) by the current product inventory on hand ($27.5 / 2 = $13.75).
Enable Multi-Warehouses - Enable this option if individual products are stored in multiple warehouse locations. Warehouse locations are defined on the LOCATION general lookup/validation table (from Customers, select Set up tables > General lookup/validation).
Enabling the Enable Multi-Warehouses option after posting products to inventory does not directly affect product inventory. As with all system setup changes throughout iMIS, changes do not update existing records. You simply need to enter your products' warehouses and inventory information on the Warehouses window (from Orders, select Manage inventory> Manage products, select a product from the list of Current Products, and click ).
Default Warehouse - (Enables only if the Enable Multi-Warehouses option is enabled) Enter the default warehouse you want to use when defining new products. Select the Find icon to look up a warehouse; warehouse locations are defined on the LOCATION general lookup/validation table (from Customers, select Set up tables > General lookup/validation).
The warehouse entered displays by default in the Default Warehouse field on the Manage products window when defining new products. You can override a product's default warehouse on the Manage products window at any time.
Automatically Post Inventory Receipts/Adjustments - (Most users should not enable this option) Enable to post inventory transactions automatically. If you do not enable this option, you still can verify and edit your inventory transactions before posting them.
Since posted inventory transactions cannot be edited, automatically posting inventory receipts, adjustments, and transfers is not recommended. Also, if you automatically post inventory receipts, iMIS automatically commits the products in inventory and releases backorders.
Default Accounts
Income Account - Enter the default income account to which income posts. This account is used when an income account is not defined at the warehouse, product, or category level. If you leave this field blank, the income account will not be populated.
Inventory Account - Enter the default inventory account used for recording inventory reductions. This account is used when an inventory account is not defined at the warehouse, product, or category level. If you do not track your product inventory, you do not need to enter an account number.
Note: iMIS does not create an accounting entry when inventory is received. The system assumes that the entry is made to the General Ledger or Accounts Payable when receiving or paying for inventory.
Cost of Goods Sold - Enter the default account used for recording inventory costs when invoicing orders. This account is used if you do not define a cost of goods sold account at the warehouse, product, or category level.
Adjustments Account - Enter the default account used for posting inventory adjustments. This account is used if you do not define an inventory account at the warehouse, product, or category level. The Adjustments Account offsets inventory when you post inventory adjustments, for example, when inventory cost and quantity are adjusted for loss or damage.
10.6 Production Release. Updated 2/24/2006 11:10:22 AM
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