Inventory Cost Correction

The Inventory Cost Correction screen calculates how your inventory unit costs should be, compares them to the current values, and recommends necessary adjustments.

Accessing Inventory Cost Correction

To access this feature, follow these steps:

1. Click the Settings tab.
2. Select Inventory Unit Costs.

3. Click the Inventory Cost Correction button in the bottom-right corner.

Processing Inventory Cost Correction

Follow these steps to perform inventory cost correction:

1. Click the Recalculate button. Manager will then recalculate inventory unit costs based on past inventory transactions.
2. After recalculation, the next screen displays how many inventory unit costs should be created, updated, or deleted.
3. To view details of the suggested changes, expand the provided worksheet completely.
4. If you agree with these proposed adjustments, select the Apply Changes button.

Inventory Cost Correction and Lock Dates

The Inventory Cost Correction screen respects your configured Lock Date, meaning it will not propose adjustments to inventory unit costs within locked accounting periods. This safeguards your historical balances from unintended changes. See the Lock Date guide for additional details.

Purpose of Inventory Cost Correction

You might wonder why Manager doesn't automatically handle these recalculations each time inventory transactions change. Automatic calculation seems helpful, however there are specific reasons why a separate correction function exists:

• Performance:
  Automatically recalculating inventory costs whenever older transactions are added, edited, or deleted would result in performance slowdown, as Manager would need to recalculate inventory costs for all subsequent transactions every time.

• Complexity due to Production Orders:
  Businesses utilizing Production Orders often experience cascading recalculations. Modifying inventory costs for one item could impact other related inventory items because of manufacturing dependencies, significantly slowing down the system's responsiveness.

• Negative Inventory Situations:
  Selling inventory items before purchasing or manufacturing them creates negative inventory. The actual inventory cost becomes known only once the item is purchased or produced later. This means new purchases or Production Orders can retroactively affect previously entered inventory transactions, potentially altering historical costs.

• Control and Predictability:
  When you perform historical adjustments, you likely want your accounting balances to be impacted predictably. Automatically triggering full recalculations could unintentionally alter historical balances.

By having this dedicated Inventory Cost Correction screen, Manager:

• Allows you periodic recalculations at your convenience.
• Gives you full transparency and detailed control over inventory cost adjustments.
• Prevents accidental changes to historical records by adhering to your Lock Date setting.
• Ensures system speed, predictability, and comprehensive control over your inventory cost management.