The Inventory Cost Correction screen calculates what your inventory unit costs should be, compares them to what they currently are, and suggests necessary changes.
This tool ensures your inventory costs remain accurate by analyzing your transaction history and proposing corrections when discrepancies are found.
To access the Inventory Cost Correction screen, go to the Settings tab, then click on Inventory Unit Costs.
Then click the Inventory Cost Correction button in the bottom-right corner.
To process inventory cost corrections, first click the Recalculate button. This will recalculate inventory unit costs based on your past inventory transactions.
When recalculation is complete, the next screen will show how many inventory unit costs need to be created, updated, or deleted.
You can review these changes in detail by expanding the worksheet to see individual cost adjustments for each inventory item.
To accept these changes, click the Apply Changes button. This will update your inventory unit costs to match the calculated values.
The Inventory Cost Correction screen respects your Lock Date settings. It will not propose changes to inventory unit costs for locked periods.
This prevents unintended changes to your historical balances, ensuring that closed accounting periods remain unchanged.
For more information about lock dates, see: Lock Date
You might wonder why Manager doesn't automatically recalculate inventory costs when transactions change. There are several important reasons for requiring manual correction:
Performance considerations: Automatic recalculation would slow down Manager when historical transactions are created, updated, or deleted. The system would need to recalculate costs for all subsequent transactions, which could be time-consuming for businesses with many inventory items.
Production order complexity: If your business uses production orders, recalculating costs for one inventory item can affect costs of other items due to manufacturing processes. This creates a cascading effect that requires extensive recalculation across multiple items and periods.
Predictable adjustments: When making historical adjustments, you often want account balances to change in predictable ways. Automatic full inventory recalculation might produce unexpected results.
Negative inventory situations: When you sell inventory items before purchasing or manufacturing them, the true cost isn't known until later. This means purchases or production orders would need to retroactively update historical costs, which can be complex to manage automatically.
Control over historical data: You might want to limit how far back Manager recalculates inventory costs to preserve the integrity of closed periods. This control is maintained through your lock date configuration.
The Inventory Cost Correction screen gives you a faster, more predictable system with greater control. You can periodically recalculate inventory costs while maintaining full control over which periods are affected, ensuring that closed historical figures don't accidentally change.