Inventory corrections or adjustments

Inventory corrections can be used to adjust the in-stock quantity for a product. This might be used to correct the quantity of an item after a stock take or to write-off damaged items. When items are added or removed the necessary accounting adjustments will be made automatically.

See also stock import / updating inventory by CSV

Adding inventory as a correction

Items can be added in to stock manually or using the inventory import. In both cases a cost price must be provided so that the items are added into stock with a value. This value will remain with the item through until it is sold and cost of sales is recorded.

Corrections should only be made for adding an opening stock balance and recording corrections where the stock levels have been identified as incorrect. Receiving purchase stock should be handled using a purchase order.

How to add inventory

  1. Search for the product on the product list and click on the inventory level.
  2. In the pop-up window click on Add inventory for the relevant warehouse.

    add inventory1

    Alternatively, go to Products > Add inventory and search for the product (if multiple warehouses are in use ensure the relevant warehouse is selected also). Click Add item.

  3. In the pop-up window enter the quantity to be added into stock and the value of a single item. This value will be used to create the accounting required to update the asset value. If warehouse locations are activated the location into which the items will be added is also displayed.

    add inventory

  4. Enter a reason for the adjustment. This will be recorded against the accounting journal and inventory audit trail.
  5. Click the Add items button to finish.

Removing inventory as a correction

Items can be removed from stock manually or using the inventory import. When manually removing items from stock the item is selected from the inventory detail report. The associated stock value will be used to make any corrections to accounting.

Corrections should only be made for removing items where the stock levels have been identified as incorrect. Shipping stock should be handled using a sales order and the goods-out process.

See also, unreceiving items on purchase order

How to remove items from stock

  1. Search for the product on the product list and click on the in stock figure. In the pop-up window click on Edit/Remove inventory for the relevant warehouse.

    remove inventory

    Alternatively, go to Products > Inventory detail and search for the product (if multiple warehouses are in use ensure the relevant warehouse is selected also).

  2. The inventory detail report is displayed with the item listed once for each different value, purchase order or location it belongs to. Hover over the line that is to be changed to see the edit icon appear next to the in stock figure. Click on the edit icon.

    remove inventory2

  3. Enter the quantity to be removed - this must not be greater than the in quantity on hand for the item on that row of the product detail report. A correction can only be made against one batch of items at a time. If multiple batches of the item have been received then multiple corrections may be needed.
  4. Enter a reason for the adjustment. This will be recorded against the inventory audit trail and the accounting journal.

    remove inventory3

  5. Click the Remove items button to finish.

Accounting for stock corrections

When items are added or removed from inventory, an accounting journal is automatically posted in order to adjust the asset value of inventory. All stock movements are accounted for in base currency.

Values

When items are added into stock the values posted to accounting are the item price given at point of adding, multiplied by the quantity.

When items are removed from stock the actual value of the items removed from stock is used. The specific items must be chosen from the inventory detail report to initiate a correction.

Nominal codes

All stock corrections will affect the default stock nominal code and the chosen stock corrections nominal codes set at Settings > Company > Accounting: Nominal codes.

Stock correction audit trail and traceability

When a stock correction is made, the journal and the inventory audit trail will record the following information:

  • Inventory movement ID
  • Reason
  • Type
  • Product ID
  • Date and time
  • User name

This makes it easy to traced the accounting journal directly back to a specific stock correction.

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FAQs

I keep getting an error message saying, "Stock correction failed. Not enough on hand availability of product at specified location to perform stock correction". What do I need to do?

It is not possible to reduce your on hand stock quantity to below zero. Although your "in stock" quantity may be remain above zero if you were to reduce it, some of the stock may be allocated to sales orders and therefore your on hand level is less and would fall below zero. Take the following example:

In stock = 10

Allocated to sales orders = 9

On hand = 1

Import attempts to reduce by 5 and fails with the error.

You will need to un-allocate your stock before reattempting the import.

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