Stock Valuations & Trial Balances

This is an issue we've had also, it used to be really bad for us when we used serial tracked stock valuations, but since mostly ceasing that and reverting to FIFO it is now not much more than a minor annoyance.

I had a similar experience with Iris in that they couldn't properly explain the cause or provide any meaningful assistance beyond some very obvious suggestions.

On occasion I have seen Exchequer allocate values to stock items that seem to bear no relation to the value from the originating document, I have always suspected this could be part of the issue.

One key thing I have found to ease the problem is to ensure that user access to edit/create/delete FIFO records (same with serial records) is restricted only to those users who understand the consequences of manually editing such records (in our case that means me); and if using serial tracked stock items to ensure the user setting to allow incomplete allocation is not selected.

Beyond that I can't provide any further insight, other than that I to have to regularly do the reconciling/journalling thing with our stock too.

We have been an Exchequer user since August 2006 and still have no handle on our stock. It is a mess and the sourse of great pain and frustration. We use Standard, FIFO and Serial Batch valuation methods and have experienced all manner of strange goings on, the software seemingly doing some strange averaging in the transaction line ‘cost’ field that bear no relation to the cost in the FIFO ledger but never anything consistent to allow a plausible explanation. Since our stock was the biggest concern when choosing a new system and the key factor in choosing Exchequer over the others we looked at (including Access Accounts) we remain hugely disappointed. Furthermore our accountants look on in complete disbelief. The problems have not been resolved by Iris, and even now our Trial Balance stock figure is some £100K out from our stock valuation report. Naturally, with all the confusion over the stock the accuracy of our accounts remains an issue and we are in no better position than previously using Sage accounts and our own database for stock control. With over 46,000 stock records the manual process of reconciling is a living hell!

Having spoken to several Iris Exchequer users, this problem encountered seems to be a common issue experienced.

 If anyone has any suggestions or answers, I would be more than receptive and grateful.

TURBOD: That sounds pretty awful, along the lines of our experience but we are probably fortunate in having a lot less stock than it sounds like you have.

Out of interest, do you use Works Orders at all?

We have that module but do not currently use it, instead use the Job Costing module and adjustments. We do potentially have many BOM stock items that the Works Order module could potentially work well with but having briefly trialed it with no training, some issues came to light immediately and a decision was made to shelve going live with it until we had more time to understand it and test it on our training system.

Hi

To try and keep the stock valuation report in balance with the nominal there are some rules.

1. Always use the prevent negative stock option in Utilities / System Settings. Exchequer can't gues what the real cost of sales will be (see note 2)

1. If the price on the PDN is different from the invoice when converting PDN to PIN then add an additional line to go to COGS. Why? If the stock that you purchased has been sold and a SDN or SIN produced then the Cost of Sales journal done by the system is going to be made at the original PDN price and not the adjusted price. This is how it works! At point of issuing the stock the SOR, SDN or SIN will have the Cost updated by the current price of the stock item. If you then amend the "stock in" price then this will not be updated on the SOR/SDN/SIN. When you post the SIN Exchequer will use the Cost field on the SDN/SIN to make the entry to the Stock Control Account and so will be different than it actually should be.

Ways around this are:

1. Don't use Live Stock, use end of period (changing this is a major task so take care).

2. Never adjust a price on a PDN for a stock item - add a line for the difference and write it off.

3. Try and finish the previous months postings before starting the next periods postings. You want as much off the day books as possible and as little to do with the next months accounts in as possible when you run the Stock Valuation Report.

4. Never revalue the stock control account (multicurrency)

5. Have stock items as GBP items with re-order costs in currency if you buy from abroad (multicurrenmcy again)

6. Try not to rely on Backdating the Stock Valuation Report - it's harder than you think so run it and store it at month end!

7. Never mess with the FIFO Records

8. There's a special function (Check All Stock) that recalculates the stock from the transactions - it's worth doing this monthly out of hours as the stock record can come out of sync with the actual transactions.

9. As stated by Mike, be very careful with editing the serial records - it's a dark art!

Hope this helps but I'll probably remember more if I get my files out!

Rich

RichardWhight: I'm not too sure about number 2, I think HMRC might have something to say on that if they were to start looking at your stock if they were to question your Corporation Tax return.

One other point I should have mentioned is that if you're using serial tracked stock, if you have a price variance on a purchase invoice, you MUST amend the price on the PDN before converting it to a PIN. If you adjust the price on the PIN, then the serial records will have the wrong price (this may have been corrected in a more recent version of Exchequer).

Mike

It's more of an accountants decision to write off the difference but I can only suggest what works in Exchequer.

PDN says Cost is £10 for 1 widget

SDN picks up Cost of £10 for 1 widget

SIN created and Exchequer posts to stock control account £10cr for stock issued

PIN is matched to PDN and says Cost is £9 for 1 widget so Exchequer posts £9 DR to stock control account

We now have a negative stock value of £1 for zero stock value.

Given that we know this behaviour could it be argued that we manually make an adjustment to Cost of Sales when we spot the difference in purchase price on an invoice and account for the £1 immediately? Would it need to be proved? If you could prove it via a report do you think it would probably be more acceptable?

Rich

Picked up link to this thread from another discussion...

One thing to remember with respect to the stock valuation report is that it is exactly what it says - a stock VALUATION. Not a stock purchase cost report.

Simply, the report values your stock based on the valuation methods selected for each item, it does not reference what was paid for each item, so if for instance you are purchasing an item in a fluctuating currency, the valuation will reflect the value "of the moment" not what you actually paid.

Acknowledging it takes some effort, it is possible to reconcile the variance between purchase cost and valuation.

Not to diminish the points above.