When it is too late to Un-Receive
Sometimes receipting price errors or quantity errors are made by accident and may not be detected until it is past a point of no return.
If at all possible, after Receiving stock and before Verification, it is possible to un-receive through Purchase Control, change the cost or quantity, then re-receive. If Verification has taken place and possibly some sales, it is too late to wind back, and another approach is required to correct the stock value
Cost Errors
Imagine the situation where there are 10 of an item in stock with an Average Cost of $100 each. The total stock value is $1000. If a cost error was made with the next receipt of 10 at $150 instead of 10 at $100, the total stock value would be 1000 + 1500 / 20 = 125. Each of the 20 items would be over-valued by $25. There would be an Audit Write-off on the day of the receipt for the amount of the over-value.
To fix this follow the steps below.
- On a Parts wip, stock adjust out all 20 parts to the Stock Adjustment account. Do not alter any pricing.
- Allow to go through an End of Day
- The following day, go into Stock File Maintenance for the part and change the Average Cost from $125 to $100. (This action may require a high permission level)
- On a new wip, stock adjust the 20 back in. This time it will pick up the correct cost from the stock file.
- In End of Day, the previous Audit write-off will be reversed.
Quantity Errors
Imagine the situation where a ten litre drum of fluid was received in at $100 when there should have been 10 x 1 litre at $10. The overall cost is correct but the quantity is not. No Audit write-off would take place if there was only the one in stock.
To fix this follow the steps below.
- On a Parts wip, stock adjust out quantity x 1 of the part (assuming there is only 1 in stock) to the Stock Adjustment account. Do not alter any pricing.
- Allow to go through an End of Day
- The following day, go into Stock File Maintenance for the part and change the Average Cost from $100 to $10
- On a new wip, stock adjust 10 back in. This time it will pick up the correct cost of $10 each from the stock file.