Re: Inventory - discrepancy between sub-ledger and general ledger

405 CD Mixed Mode

My understanding of General Ledger per se is close to zero, but I do know
something about the Inventory Application

Things you might check.
1. SYS800 system parameters ... are you using actual or standard costs?
2. Weekend work
3. As of Cost
4. Exceptions

Here is a Gotcha ... your accounting dept tells everyone to stay out of
BPCS while month end is resolved, but your factories still active.  Monday
morning someone keys in transactions for the weekend activity AND BACK
DATES THEM to when the activity actually took place, WHICH HAPPENS TO BE IN
THE PREVIOUS accounting MONTH

Even though accounting is all finished with the previous month activity,
BPCS updates things AS IF THOSE TRANSACTIONS ACTUALLY OCCURRED IN THE
PREVIOUS MONTH which means your Opening Balance is now different than what
it was when you did the end fiscal, and various other weird things

Some people run reports using a date range that presupposes there will
never be any such thing as back dated transactions, or transactions that by
some accident get posted with a bogus date.

The easy way to fix this is to instruct your people to use the system date
If you enter the transactions today, date them today, do not date them when
the transactions actually occurred.
If you try to have a rule that we only do this exception when the date
involved is outside the current fiscal month, that will be too confusing
for people outside of the accounting dept.

When you do transactions, BPCS uses the costs that are in the system AS OF
WHEN the transactions were done, with a few exceptions.  So if you look at
all the transactions on some item over time, there can be fluctuations in
the cost used, particularly work-in-process sub-assemblies depending on
labor cost variances.

If the General Ledger reflects the aggregate of the transactions during the
course of the month, and the items costs are fluctuating, then if you run a
report showing you the total value of your inventory on any given date it
will never agree.  You need to do some kind of end-fiscal period adjustment
to bring them into agreement.

When inventory transactions are posted, there is some flag that says they
not yet posted to General Ledger, then someone runs GLD540 or whatever, and
it takes all transactions in ITH that have that flag that way (I think
there is a logical access path for just that purpose) and in the process of
posting them to GLD (assuming ITE rules say that is a type of transaction
to go to GLD) the flag is flipped to say GLD got that data.

That data has COST of the item AS OF THE TIME the transaction was actually
psted.  Depending on your business, that COST might fluctuate, so now those
items in inventory are at some cost OTHER than what they were when they
went into the GLD.

When we run shop order purge, this goes in sequence of the shop orders
being closed out, and as the inventory costs are applied, it uses the
LATEST COST of the materials involved, and immediately updates the cost of
the parts that the orders just made.

Now consider that we number our parts
WHATEVER dash some # associated with references (wires in a harness)
that means that when we release shop orders, they go out in item #
sequence, which means the parent has a smaller shop order # than the child,
and if they all get closed at the same time, the parent shop order is
purged before the component assemblies of that parent.

If there is fluctuation in cost from one run to the next, which we do have,
due to various factors such as size of a production run,

when the parent low shop order purges, it uses the material costs from the
sub-assemblies from the LAST TIME we did a production run on them, then it
updates the sub-assemblies with the cost from THIS production run.

There are other lags in the system.  CMF Cost Master is not updated unless
there is CIC Cost Planning on an item.  So you have a new item in the
system.  The odds are its actual cost is zero until you have actual
transactions, and guess what, your first transactions might enter them as
zero cost, especially if the new item is a sub-assembly.  Raw Material no
problem, it is costed as soon as you process the transactions to bring it
into your inventory.

Check your Transaction Effects ... There's a secondary menu off of INV
where you can inquire into the ITE file.  Select any old transaction.  Glue
your eyes to some field cluster like GLD activity, now upper shift scroll
through the transactions.  You can rapidly see which transactions are an
exception to some general rule there.

Oh, it also helps to have a reference copy of which transactions you really
using.  I have a Query/400 which counts how many of each ITH transaction
types we have by combination of Transaction Type - User-Year-Month (to find
out if someone is using the wrong kind of transaction by accident ...
sometimes someone sees a transaction type other than what they were taught
to use, and they start using it in an inappropriate setting)

Do not change the rules in SYS800 or ITE without a thorough understanding
of the implications

Hi all,

We have a problem in BPCS that the month-end balance of our inventory
sub-ledger does not match with the total value of the inventory accounts in
the general ledger.  The inventory valuation method we are using is
weighted average.

Does anyone comes across this problem in the inventory balance, and do you
have a solution for it ?

BPCS v6.0.02 C/S Mar98Cum

Regards

Victor
Atofina HK Ltd.
Email : victor.chan@atofina.com


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