How Does Xebra Account for Inventory

How does Xebra account for inventory?

The following applies to both CSI and General Stock. When items are purchased for inventory, they are charged to the cost of goods account designated for Inventory Purchases in Order Entry>View>Control Files>GL Cross Reference.

The value of the inventory is maintained in the inventory activity files. When goods are purchased or otherwise entered into inventory, receipt records are created. When goods are released or otherwise relieved from inventory, withdrawal entries are generated.

After the end of each accounting period, as part of the month end procedure, the Generate GL Entries option is selected from Accounting>Ledger>General Journal>Actions. This program compares the inventory balance at the beginning of the period with the inventory value at the end of the period for each warehouse designated as containing distributor owned inventory. If the inventory value increased during the period, the program generates a debit (increase) for the difference to the inventory asset account defined in the warehouse record and a credit (decrease) to the cost of goods account. If the cost of goods account decreased during the period, the entries are reversed. The cost of goods account is debited (increased) and the inventory asset account is credited (reduced).

Related Questions: How do I set up my warehouses and GL accounts for inventory? How do I move my existing inventory to Xebra and get the balances right? My inventory value reports do not match up with the Balance Sheet, how do I fix it?

How do I set up my warehouses and GL accounts for inventory?

As delivered the chart of accounts has two inventory asset accounts defined (1400 - General Stock and 1410 - Stock on Contract). Generally, these are enough to work with. We define General Stock as distributor owned stock that can be sold to any customer. Stock on Contract is stock that is distributor owned, but is decorated or printed to make it specific to a particular customer. These two asset accounts are usually sufficient, you may, however, define others to meet your needs.

Defining Warehouses (Order Entry>View>Warehouse)

While you may only have one physical warehouse, you may divide it into a number of logical warehouses to separate different categories of goods that you store.

If you store customer owned product for distribution, you need to put it in a separate logical warehouse.

Distributor owned inventory can be stored in one warehouse, or several warehouses depending on your wishes. A warehouse must be defined for each different inventory asset account that you wish to use. You may have more than one warehouse associated with the same inventory asset account. You must set the distributor owned inventory checkbox and identify the inventory asset account to be used on each warehouse that contains distributor owned inventory.

Each warehouse definition will create a new customer and supplier record.

CAUTION: Do not be confused by the Inventory Purchase account in the GL Cross Reference. The account expected there is a cost of goods account. The inventory asset accounts should never be used in the GL cross reference. They should only appear in the warehouse records.

Related Questions: How does Xebra account for inventory? How do I move my existing inventory to Xebra and get the balances right? My inventory value reports do not match up with the Balance Sheet, how do I fix it?

How do I move my existing inventory to Xebra and get the balances right?

The key to getting your initial inventory correct in Xebra is to receive your existing inventory effective the month BEFORE you start doing live transactions in Xebra.

As you enter your inventory, make certain that your costs are correct. You are not buying new inventory, but it still has an inventory value that must be reflected on the receipts.

Before you start, you should create the item records that you need. Make sure you designate the item as being CSI or Inventory and define the inventory unit of measure.

For Customer Specific Inventory (CSI), create a control record for the product and the warehouse and then do a receipt to that warehouse.

For General Stock, user Order Entry>Inventory Inquiry and enter the item code. If you use the binoculars to select the item, don’t forget to tab or enter when you return to the main screen. Then do Commands>New Activity. Provide the information requested. Remember to date receipts in the month before you go live.

Once you have entered all of the inventory, you should go to run a cost by location report in CSI for each warehouse that contains distributor owned inventory.

Run an Inventory Balance report from General Inventory Reports.

Verify the report against the value you were carrying on your old system. If the figures are close, don’t worry too much about the small differences. You will pick up the discrepancies as you do cycle counts. If there is a big difference between the Xebra reports and your old system, check your work. You may need to do a physical inventory to figure out where the errors are. The inventory balance from your old system should be included in the beginning balances entered in the Xebra Accounting. Make any necessary journal entries in the first month you start with Xebra to show any difference between the old system balance and the total value that is showing on the Xebra reports.