Why doesn't the Inventory Valuation Report Match the GL Balance for the Inventory GL Account Number?

Possible reasons why the Inventory Valuation report would not match the GL balance for the Inventory GL Account #

Section A

Before comparing the Inventory Valuation to the GL Balance the following items needs to have been done. 

  • create a backup of your live data files and work from a froze data set when comparing numbers.  This is not a requirement, but it is strongly suggested since inventory valuation is a moving target when trying to work on your live data files.
  • Make sure that all invoices have been released to AR (because in the case of the packing list, it will be deducted from inventory right away upon the Packing list being generated, but the corresponding GL transaction will not be generated until released to AR)
  • Make sure that all AR Credit Memo's that were generated from RMA Receivers have been approved and posted to the GL. 
  • All records Released/posted to the GL.
  • Also keep in mind that the same GL Account could be assigned to multiple Warehouses within setup.  And/or, each warehouse could have a different gl # assigned to it, so you can not just run for all Warehouses and expect the Inventory Valuation report to match one specific GL Account.  Before comparing the Inventory Valuation Report to the GL Accounts, it is best to check the Warehouse Setup first and find all of the Warehouses that use the same GL Account #, then run the Inventory Valuation report for just those warehouses, instead of ALL. 
  • Keep in mind that you will more than likely see a minor difference between the Inventory Valuation and GL Account # balance when you compare them which is common and is more than likely due to one report rounding individual record differently than the other.  It should be a very small difference in value.  If it is are large discrepancy, then more investigation may be required. 

NOTE:  Concerning the "Inventory and WIP Valuation Report"  the WIP Value on this inventory report should not be used as a validation to the GL Account balance for WIP.  This report was created in order to give the end users an idea of what was actually in WIP for components at this time.  The GL balance for the WIP account will more than likely never match this value due to the fact that so many variables come into play when generating the GL Transactions for WIP.  (shortages, over issues, partial job moved into FGI, kit not closed yet,Configuration Variance, Manufacture Variance, etc. . .)  And one component can be used through out many jobs at any given time, and these jobs could be in various stages within production, it is not possible for the person attempting to compare these values to go through and validate all kit shortages, over issues, what has been partially moved into FGI, etc. . .  


Section B

If you find that the Inventory Valuation report value and the GL Account value do not match even after following the above suggestions below might be a number of other items that contributed to the discrepancy:

  • Any GL Account number that is used within the Warehouse Setup should not be used within the Inventory Handling GL Defaults.  For example:  if you find that you had your MAIN1 Warehouse assigned to 1310000-00-00 and happen to have Inventory Handling Issue Default using the 1310000-00-00.  When the user uses inventory handling to issue qty out of stock the system will properly reduce the qty on hand , which in turn reduces your Inventory Valuation report.  But since the Warehouse and inventory handling Default used the same GL account number the Transaction would Debit and Credit the same account.  Therefore, your Inventory Value went down, but your GL Account balance remained unchanged.

  • You should not be using the Inventory Handling to issue parts to WIP.  All of this should be handled through the Kitting module to make sure that all of the correct transaction are made within the system.  if you attempt to use inventory handling to issue parts to WIP:
    • The value it not actually associate with any work order within the system.  If you use Kitting properly the system will associate that WIP value with that kit. 
    • Upon Closing the Kit the system will not make the correct transaction to relieve that value out of WIP (unless the users remember to manually inventory handle that value back out upon closing the kit)  If you use Kitting properly the system will create the correct transactions removing that value out of WIP.  It will also make the needed calculation for Config Variance and Mfgr Variance.   ​
  • As a Rule you should never create Journal Entries against any of the GL Accounts that are setup within your Warehouse Setup.  (we do understand that there are situation where the JE against these accounts are needed, but it should be very rare situation.)  If you generate a JE against your Stock GL Account, now your GL value would have changed but your Inventory Valuation has not.  Same applies for WIP GL Accounts and/or Variance accounts. 
  • As a Rule any GL Account # that is assigned to a warehouse within Warehouse setup should not be used within any other setup screens within the Manex system.  
    • For Example:  there was a user that had the same GL # assigned to a warehouse and then they also had a Sales Type within the system that was using that same GL #.  They also has a Purchasing GL Accounts allowed to select this same GL Account #.  This would cause the Inventory Valuation report to never match the GL Account # balance.   

 

If you have followed the above suggestion and confirmed that the Setup is correct and that no Journal Entries have been created against these accounts and you find that you still have a discrepancy between the Inventory Valuation reports and the GL Account Balances, please proceed with the following:

  • Take note of the Discrepancy value at a particular point in time
  • on a daily basis Follow the steps in Section A and confirm if the Discrepancy has changed from the prior day or not.  
  • If you find that the Discrepancy has changed from the Prior day, document the detailed information
  • Provide Manex with the Detailed, Prior Day backup and the current back up where the Discrepancy has changed.
  • Manex will review the days worth of transaction in order to try and determine what could be causing your fluctuation between the two values.