Quantity tracking in Evosus provides users with an accurate physical on hand count while also accurately reflecting what is happening from an accounting standpoint (valuation on hand). The reality is that physical on hand quantities can differ from valuation on hand. How can this happen?
First and foremost, Evosus allows quantities to go negative when you sell/invoice more than you have in stock. In this case, the quantity on hand will go negative while the valuation figure will stay at zero. This ensures your valuation report matches your inventory asset account.
Evosus also allows you to deliver product on an order without invoicing it. Delivering a product in Evosus does not post to the general ledger. Only invoicing the order will create a posting activity in the general ledger. Conversely, invoicing an order without delivering the product will post and cause your valuation figure to go down, but the On Hand quantity will not change. Keep in mind that valuation is the accurate on-hand quantity by GAAP and legal standards since it only tracks quantities for which a business legally owns. Invoicing commences the legal transfer of ownership, so invoiced quantities are not included in the valuation on hand figure. Items that are delivered but not invoiced still belong to the business, so these quantities are included in the valuation on hand figure. As a rule, Evosus recommends limiting the number of transactions where items are delivered, but not invoiced or invoiced and not delivered. This should be the exception and not a normal business process.
The above mentioned situations are reflected in the stock site quantities you see when searching for inventory.
When searching for inventory, you have Normal and Expanded view options. The Normal view is the default and displays the most common fields that employees need to see: On Hand, Reserved, Available, On Order, Layaway, On Quote and In Transit.
The Expanded view provides additional fields that are typically used to research discrepancies in quantities: Delivered, Invoiced, Rtrn Pending and Valuation on Hand.
Each of these quantity figures are discussed below:
||Quantity that is physically on hand. Includes items that have been invoiced, but not delivered. Does NOT include items that were delivered, but not invoiced.
||Quantity waiting to be delivered on a customer sales or service order or a customer job. This quantity is taken into consideration when calculating quantity to order on a vendor PO.
||On Hand minus Reserved.
||Quantity currently on purchase orders in an On Order status.
||Quantity currently on a Layaway order.
||Quantity currently on an Open Quote.
||Quantity that is filled on an ICPO and waiting to be received. This quantity is sitting in the intermediary stock site.
||Item has been marked as delivered on an order, but has not been invoiced. This means the On Hand quantity was reduced, but Valuation on Hand was not affected. Nothing has posted for this item.
||Item has been invoiced, but has not been marked as delivered. This means the Valuation on Hand quantity was reduced, but the On Hand quantity was not affected. The inventory asset and COGS accounts were affected for this item.
||Item is currently sitting in the Pending Returned Items queue waiting for action. On Hand and Valuation on Hand quantities have not been affected and nothing has posted for this item.
|Valuation on Hand
||Quantity of item that is on hand according to GAAP and legal standards and refers to quantities the business legally owns. This number should match the general ledger balance and Inventory Valuation report.
Only posting activities affect this account, such as stock transfers, stock adjustments, ICPO fill/receive, RGA sending and receiving, PO receipts, invoicing customer orders, delivering items on jobs and moving items to inventory from Pending Returns.
This number is used on Physical Counts. Evosus recommends resolving all Delivered, Invoiced, Rtrn Pending, In Transit and On Order items prior to starting a physical count to ensure the valuation on hand matches the on hand figure in Evosus.
How This Impacts Reports
When researching discrepancies, it is important to note that the Stock Movement report displays valuation on hand figures. For instance, you won't see an entry on Stock Movement report for an item that was delivered, but not invoiced. You will see an entry on the Stock Movement report for an item that was invoiced, but not delivered.
The Inventory Valuation report will always use the valuation on hand quantity to ensure it ties to the general ledger.
The Delivered Items report will display all delivered items regardless of invoice status. Items that were delivered, but not invoiced will display on this report.
Unless explicitly stated, this topic documents the most recent version of Evosus Business Enterprise. If you're not using the latest version, go here to download it.
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