Inventory Issue Processing

Inventory issues allow your organization to track stock levels at warehouses. If your organization uses the Sales Orders functionality, MYOB Acumatica automatically generates inventory issues upon release of sales orders, customer returns, credit and debit memos, and kit assembly documents.

Also, you can create inventory issues that are not linked to sales in the following situations:

  • To remove expired or damaged goods
  • To return excessively issued goods

If the Sales Orders functionality is not used, or in some other cases, you can create inventory issues to account for sales and returns.

Types of Issue Lines

Inventory issues may decrease or increase inventory, depending on the transaction type of the issue lines.

The following transaction types are available for issues:

  • Issue: Indicates that the specified quantity of the inventory item is issued from inventory. Transactions of this type are generated from the purchase returns and can be created directly in the Inventory functionality to account for expired goods. The quantities of stock items on the issues of this type decrease the on-hand quantities of these items and decrease the total costs of the items in inventory by the amount specified in the Ext. Cost box.
  • Return: Indicates that the specified quantity of the stock item was returned to inventory. Transactions of this type are generated from customer return orders of the RM and RR order types. Issues of this type can be created to return the excessively issued items. The quantities of returned items increase the on-hand quantities of stock items and the total costs.
  • Invoice: Indicates that the specified quantity of the inventory item is issued based on an invoice. Generally, the system generates issues of this type when you are fulfilling the sales orders; also, you can create these issues manually. The quantity of inventory in this transaction will be subtracted from the quantity of the item available at the warehouse.
    Note:
    If the Advanced SO Invoices feature is enabled on the Enable/Disable Features (CS100000) form, the system generates issues of the Invoice type on release of the direct sales invoices. For more information, see Direct Sales: General Information.
  • Debit Memo: Indicates that the specified quantity of the inventory item is issued from inventory; the system generates transactions of this type of transaction on release of the appropriate documents. The quantity of the item in this transaction will be deducted from the on-hand quantity of the item. Transactions of this type can also be entered manually.
  • Credit Memo: Indicates that the specified quantity of the stock item is received to inventory; transactions of this type are generated by the system during the processing of customer returns of the RC (Return for Credit) type and can be entered manually. The quantity of the item in this transaction increases the on-hand quantity.
    Note:
    If the Advanced SO Invoices feature is enabled on the Enable/Disable Features (CS100000) form, the system generates issues of the Credit Memo type on release of the direct sales invoices with return lines. For more information, see Direct Returns: General Information.

Data Entry

You can view, edit, and create inventory issues by using the Issues (IN302000) form. A new inventory issue, whether automatically generated or created manually, is assigned a reference number according to the numbering sequence that is specified in the Issue Numbering Sequence box on the Inventory Preferences (IN101000) form.

For each line of a new issue, you enter the following information:

  • Tran. Type, which determines how the issue updates the ending inventory and which general ledger transactions are generated.
  • Inventory ID, which identifies the stock item. If the Inventory Subitems feature is enabled in your system, the subitem is used with the inventory ID to identify the stock item.
  • UOM, or the unit of measure. By default, the system inserts the base UOM selected for the item on the Stock Items form. However, if the Multiple Units of Measure feature is enabled on the Enable/Disable Features (CS100000) form, you can use any of the UOMs specified for the item.
  • Quantity, the quantity of the item to be issued in the selected UOM.
  • Unit Cost or Ext. Cost (extended cost) of the issued item. You can enter the unit cost or use the default unit cost, and the system calculates the extended cost automatically as the unit cost multiplied by quantity. Alternatively, you can enter the extended cost. The default unit cost specified for a stock item when the issue is created is an estimation of the cost retrieved from cost statistics at the moment when the item is selected for a line. Later, on release of the issue, the system applies the correct cost according to the valuation method selected for the item.
  • Unit Price or Ext. Price (extended price) of the issued item, which is applicable only to lines of the Invoice, Debit, and Credit Memo types. You can enter the unit price or use the default unit price, and the system calculates the extended price automatically as the unit price multiplied by quantity. You can instead enter the extended price manually.
  • Reason Code, which is required only for transactions of the Issue or Return types. The reason code defines the offset account to be updated by the issue line. The system will use the default reason code selected for issues on the Inventory Preferences (IN101000) form if no reason code is specified for the line. Reason codes are not used for issues generated from documents originating in the Sales Orders functionality.

For the procedures that describe how to enter an inventory issue, see To Enter an Inventory Issue of the Issue Type and To Enter an Inventory Issue of the Invoice Type.

Release of Issues

You can release a particular inventory issue by clicking Release on the form toolbar of the Issues (IN302000) form. Also, you can mass-release issues (along with inventory transactions of other types) by using the Release IN Documents (IN501000) form.

If the quantity specified for any of the inventory items in the issue is greater than the Available for Issue quantity for this item in the warehouse specified for the line that contains the item, the system will not release the issue. Also, if an inventory item is tracked by lot or serial numbers, the system checks whether the specified lot or serial numbers are available in the warehouse selected in the line.

If the Update GL check box is selected on the Inventory Preferences (IN101000) form, on release of each inventory issue, the system generates a batch of journal entries based on the types of transactions included in the issue, and updates the availability data for the items and the cost statistics. You can view the reference number of this batch on the Financial Details tab of the Issues form: To view the details of the batch, click the reference number of the batch in the Batch Nbr. box.

Released issues are read-only documents.

The Inventory Valuation (IN615500) report shows the on-hand quantity and the total cost of inventory items on hand, which are updated by every released inventory issue.

Issues Generated by Sales

If an issue is created automatically as the result of a sales order being processed, the extended cost amount usually debits a cost of goods sold account and credits an inventory account, with the accounts determined by the posting class of the stock item. Reason codes are not used for issues generated from the Sales Orders functionality.

The unit costs specified for stock items on inventory issues are the estimations of actual costs according to the cost statistics at the moment when each item is selected in the sales order line. On release of the inventory issue, the system calculates the correct costs of the goods sold based on the valuation methods assigned to the items.

Direct Issues

If you enter an issue manually, reason codes are required for each issue line of the Issue and Return types. Reason codes used for issues should provide offset accounts for each specific type of issues. You can specify the most appropriate reason code for each issue line; when no reason code is selected, the system automatically inserts the default reason code of the Issue usage that is specified on the Inventory Preferences (IN101000) form.

With a direct issue, the extended cost amount updates the balances of the inventory account and of the offset account supplied by the reason code. The selected offset account depends on the reason of the transaction; it is a specific expense account. If the issue has been created for kit assembling, the offset account is usually an expense account, such as Material Expense. If the issue has been created to remove expired goods, the offset account might be Expired Goods' Costs.

For issue lines of the Invoice, Credit Memo, and Debit Memo types, you can specify the price and the extended price of the line item.

Note:
The Unit Price and Ext. Price values cannot be used for inventory issues of the Return and Issue types.

On release of such transactions (with nonzero extended prices), the system generates the following additional journal entries:

  • For a line of the Invoice or Debit Memo type, the extended price amount (sales amount) is credited to the Sales account and debited to the AR Clearing account defined on the Inventory Preferences (IN101000) form.
  • For a line of the Credit Memo type, this amount is credited to the AR Clearing account and debited to the Sales account. The Sales account is determined by the posting class of the item; can be overridden by the offset account of the reason code it such code is specified.

To complete the sale to the customer or the customer return, you can later create an appropriate AR document (Invoice, Credit Memo, or Debit Memo) by using the Invoices and Memos (AR301000) form, and move the sales amount from the AR Clearing account to the AR account of the customer.