Reason Codes: General Information

The majority of transactions with inventory items are performed when the items are purchased or sold, and the respective inventory receipts or issues are generated by other documents. These documents include purchase receipts and sales orders from which financial documents, such as AP bills and AR invoices, are generated. Because direct inventory transactions (that is, inventory transactions that are not based on any sales or purchase documents) do not contain information about why inventory items are being moved, users should specify reason codes for them. When a reason code is specified for each direct inventory transaction, your organization can track why the particular inventory transaction was performed.

Also, a reason code should be created for vendor returns. In this case, a reason code indicates that when the system creates an inventory issue that corresponds to a vendor return, the system copies GL accounts from a receipt for which a purchase return is prepared. For details, see Purchase Returns at the Original Cost: General Information.

In the following sections, you will read about the creation and use of reason codes in inventory.

Learning Objectives

In this chapter, you will do the following:

  • Prepare the system for the creation of reason codes
  • Create reason codes for inventory operations
  • Create reason codes for vendor returns

Applicable Scenario

You create reason codes when you initially configure inventory and order management in MYOB Acumatica. You use reason codes in the direct inventory operations of issuing, receiving, adjusting, and counting physical inventory and in vendor returns.

Creation of Reason Codes for Inventory

Before you start configuring the inventory settings in MYOB Acumatica, you need to create all necessary reason codes to be used in inventory transactions. You define reason codes on the Reason Codes (CS211000) form.

For each reason code, you should specify the following:

  • Identifier: Identifiers of reason codes may have up to 10 characters and should clearly designate the reason for the transaction, as with DAMAGE, EXPIRATION, SHRINKAGE, and RETURNS.
  • Usage: You specify with what type of transaction or document this reason code will be used, which can be any of the following:
    • Receipt
    • Issue
    • Vendor Return
    • Adjustment
    • Transfer
  • GL account: You select the GL account that the system will use as an offset account for transactions with this reason code specified.

After you have created all required reason codes, you can specify default reason codes on the Inventory Preferences (IN101000) form. For details, see Default Reason Codes for Inventory Transactions.

Default Reason Codes for Inventory Transactions

When an inventory document is created directly on a form such as Receipts (IN301000) or Issues (IN302000)—that is, when the inventory document is not based on a sales or purchase document—the reason code defines what account will be used as a default offset account. On release of the transaction, the inventory account (which is copied from the stock item) and the offset account (which is copied from the reason code) will be updated with the amount of the transaction.

For the following types of inventory transactions, you have to specify the default reason code on the General tab of the Inventory Preferences (IN101000) form:

  • Receipts
  • Issues
  • Adjustments
  • Physical inventory adjustments

When you create one of these inventory documents, the system automatically inserts the specified default reason code. Users can replace the default reason code with another reason code defined for the transaction type, if necessary. If users change the reason code, the corresponding account or accounts will be inserted into the appropriate boxes for the document.

Reason Code for Vendor Returns

When you configure order management preferences, you specify the default reason code of the Vendor Return usage type for vendor returns on the Purchase Orders Preferences (PO101000) form. The system inserts this reason code for inventory issues that are generated during the processing of purchase returns, which are documents of the Return type created on the Purchase Receipts (PO302000) form. Users can change the default reason code in the inventory issue, which is created on the Issues (IN302000) form.

For information on configuring order management preferences, see Configuration of Order Management: General Information.