D100-Distribution Basic 6.0

Distribution
D100 Distribution:
Basic
Training Guide
Last Revision: 10/31/2016

Acumatica ERP 6.0
| Contents | 2
Contents
Copyright......................................................................................................6
Introduction................................................................................................. 7
How to Use This Course...............................................................................8
Part 1: Inventory....................................................................................... 10
Company Story: Inventory.............................................................................................. 11
Lesson 1: Introduction to Inventory................................................................................. 12
Integrated Financial and Distribution Modules of Acumatica ERP..................................13
Inventory Entries and Transactions..........................................................................14
Step 1.1: Enabling the Distribution Suite in the System.............................................15
Step 1.2: Adding the General Ledger Accounts......................................................... 18
Step 1.3: Configuring the Reason Codes for Inventory Entries.................................... 21
Step 1.4: Configuring the Inventory Module............................................................. 23
Additional Information........................................................................................... 25
Lesson Summary.................................................................................................. 26
Lesson 2: Inventory Items.............................................................................................. 27
Posting Classes..................................................................................................... 28
Inventory Account................................................................................................. 30
Step 2.1: Creating the Posting Classes for Processing GL Transactions......................... 32
Item Classes........................................................................................................ 36
Step 2.2: Creating the Item Classes for Controlling Items in Inventory........................ 37
Inventory IDs....................................................................................................... 40
Step 2.3: Creating a Stock Item.............................................................................41
Step 2.4: Creating a Non-Stock Item...................................................................... 44
Lesson Summary.................................................................................................. 47
Lesson 3: Inventory Transactions..................................................................................... 48
Inventory Transaction Processing............................................................................ 49
Step 3.1: Processing an Inventory Receipt............................................................... 59
Step 3.2: Processing an Inventory Adjustment......................................................... 64
Step 3.3: Processing an Inventory Issue................................................................. 68
Lesson Summary.................................................................................................. 76
Lesson 4: The Cost of Inventory......................................................................................77
Inventory Valuation............................................................................................... 78
Step 4.1: Analyzing the Cost of Inventory............................................................... 81
Step 4.2: Reviewing the Cost Statistics of an Item................................................... 83
Lesson Summary.................................................................................................. 86
Lesson 5: Item Availability.............................................................................................. 87
On-Hand and Available Inventory............................................................................88
Step 5.1: Analyzing the Item Quantities.................................................................. 89
Step 5.2: Processing More Inventory Transactions................................................... 101
Additional Information......................................................................................... 102
Lesson Summary.................................................................................................103
Lesson 6: Physical Inventory......................................................................................... 104
Physical Count Process.........................................................................................105
Step 6.1: Configuring the Physical Inventory Type...................................................107
Step 6.2: Preparing for Physical Count.................................................................. 109
Step 6.3: Counting and Data Entry....................................................................... 114
| Contents | 3
Step 6.4: Processing the Count Result................................................................... 116

Lesson Summary.................................................................................................119
Lesson 7: Closing Procedures........................................................................................ 120
Financial Period Closing in Inventory..................................................................... 121
Step 7.1: Reviewing Unprocessed Inventory Transactions......................................... 122
Step 7.2: Reconciling the Cost of Inventory with the GL Account Balance....................123
Step 7.3: Closing a Financial Period...................................................................... 130
Lesson Summary.................................................................................................133
Lesson 8: Multiple Units of Measure............................................................................... 134
Units of Measure for Inventory Items.................................................................... 135
Step 8.1: Defining the New Units of Measure......................................................... 138
Step 8.2: Defining the UOM Conversions for Inventory Items....................................142
Step 8.3: Processing Inventory Transactions in Other Than Base Units....................... 144
Lesson Summary.................................................................................................150
Part 2: Purchase Orders...........................................................................151

Company Story: Purchasing...........................................................................................152
Lesson 9: Introduction to Purchase Orders...................................................................... 153
Step 9.1: Creating a Vendor.................................................................................154
Step 9.2: Uploading the Vendor's Price List............................................................ 155
Step 9.3: Configuring the Purchase Orders Module.................................................. 157
Lesson Summary.................................................................................................160
Lesson 10: Purchase Order Process................................................................................ 161
Purchase Order Process....................................................................................... 162
Step 10.1: Creating a Purchase Order................................................................... 166
Step 10.2: Printing a Purchase Order.................................................................... 169
Step 10.3: Creating a Purchase Receipt................................................................. 172
Step 10.4: Releasing a Purchase Receipt............................................................... 175
Step 10.5: Processing the AP Bill for the Receipt.................................................... 177
Step 10.6: Reviewing the Linked Documents.......................................................... 179
Lesson Summary.................................................................................................182
Lesson 11: Partial Receipts, Order Amendments, and Purchase Returns...............................183
Step 11.1: Processing a Partial Receipt..................................................................184
Step 11.2: Correcting the Original Order................................................................187
Step 11.3: Processing a Purchase Return............................................................... 195
Lesson Summary.................................................................................................201
Lesson 12: Purchase Orders With Non-Stock................................................................... 202
Services and Non-Stock....................................................................................... 203
Step 12.1: Processing an Expense Accrual with a Non-Stock Line.............................. 205
Step 12.2: Processing a Direct Expense with a Service Line......................................211
Step 12.3: Processing a Mixed Order of Goods and Non-Stock.................................. 218
Lesson Summary.................................................................................................224
Lesson 13: Reviewing the Purchasing Documents and Verifying Transactions........................ 225
Step 13.1: Sampling Documents for Review in Reports............................................ 226
Step 13.2: Reviewing the Orders and Receipts by Vendor.........................................227
Step 13.3: Reviewing the Orders and Receipts by Inventory Item..............................233
Step 13.4: Verifying the Inventory Transactions...................................................... 234
Step 13.5: Verifying the GL Transactions................................................................236
Lesson Summary.................................................................................................239
Part 3: Sales Orders.................................................................................240

Company Story: Sales.................................................................................................. 241
| Contents | 4
Lesson 14: Introduction to Sales Orders......................................................................... 242

Order Types for Sales.......................................................................................... 243
14.1: Activating an Order Type............................................................................. 246
14.2: Configuring the Sales Orders Module............................................................ 248
14.3: Uploading the Sales Price List...................................................................... 249
Lesson Summary.................................................................................................252
Lesson 15: Sales Order Process..................................................................................... 253
SO Order Process................................................................................................254
Step 15.1: Creating a SO Order........................................................................... 255
Step 15.2: Creating a Shipment........................................................................... 259
Step 15.3: Processing the Invoice......................................................................... 264
Step 15.4: Reviewing the Inventory Issue..............................................................270
Lesson Summary.................................................................................................273
Lesson 16: Invoices, Cash Sales, Quotes........................................................................ 274
IN Order Process.................................................................................................275
Step 16.1: Processing an IN Order........................................................................276
Step 16.2: Processing a CS Order.........................................................................279
Step 16.3: Processing a Quote............................................................................. 283
Lesson Summary.................................................................................................289
Lesson 17: Shipments.................................................................................................. 290
Shipment Creation Conditions............................................................................... 291
Back Order Replanning Process............................................................................. 292
Step 17.1: Processing Back Orders....................................................................... 293
Step 17.2: Correcting a Shipment.........................................................................301
Step 17.3: Correcting an Invoice.......................................................................... 303
Step 17.4: Processing Scheduled Shipments...........................................................307
Step 17.5: Processing a Single Shipment for a Number of Orders.............................. 311
Lesson Summary.................................................................................................314
Lesson 18: Sales Returns.............................................................................................. 315
Order Types for Returns.......................................................................................316
Step 18.1: Processing a Return for Credit.............................................................. 318
Step 18.2: Processing a Return for Cash................................................................323
Step 18.3: Processing a Return for Replacement..................................................... 327
Lesson Summary.................................................................................................335
Lesson 19: Sales Orders With Services, Non-Stock, and Charges........................................336
Step 19.1: Processing an Invoice for Services........................................................ 337
Step 19.2: Processing a Mixed Order of Goods and Non-Stock.................................. 339
Step 19.3: Adding Freight Charges to an Order...................................................... 344
Lesson Summary.................................................................................................356
Practice Exercises.................................................................................... 357
Appendix A: Allocation Types...................................................................358
Appendix B: GL Transactions Outline....................................................... 359
Appendix C: Shipment Creation Troubleshooting..................................... 361
Appendix D: Custom Order Types for Sales Returns.................................362

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Appendix E: Availability Calculation......................................................... 364
Appendix F: Processing an Issue to a Negative Inventory........................370
Appendix G: Initial Configuration Reference............................................ 376
Glossary................................................................................................... 377
| Copyright | 6
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Software Version - 6.0

Last updated: 9/12/2016
| Introduction | 7
Introduction
This course introduces the functionality of the Acumatica ERP Distribution suite based on a set of
examples that illustrate processes in a small company. The course consists of lessons that guide you
step by step through the examples and explanations of the configuration and process flow in Acumatica
ERP.
The Distribution suite includes the Inventory, Sales Orders, Purchase Orders, and Purchase Requisitions
modules. In the first part of the course, you will learn about inventory management processes in the
system. You will learn how inventory transactions are linked to general ledger transactions. Also, you
will learn to configure inventory items, process inventory transactions, and control the item quantity
and the cost of inventory.
In the second part of the course, you will learn about purchase management processes in the system.
You will process sample purchase orders and the purchase receipts by these orders. You will learn to
process partial receipts, make amendments to orders and process a return of goods to the vendor. You
will learn to process purchase orders with non-stock items in different modes. You will learn to review
the documents generated from the Purchase Orders module and verify the inventory transactions and
GL transactions.
In the third part of the course, you will learn about sales order management processes in the system.
You will process sales orders of predefined types, including SO (Sales Order), IN (Invoice), and CS
(Cash Sale). You will learn to process shipments, make corrections to shipments and invoices, and
process sales returns of different types: returns for credit, cash, and replacement. You will learn to
review the documents processed in the Sales Orders module and verify the inventory transactions
and GL transactions. You will process mixed orders of goods and non-stock and see how the lines with
non-stock items can be copied to shipments. Finally, you will learn to configure a built-in calculation of
freight costs in sales orders.
After you complete the course, you will have an understanding of how to start using the Distribution
suite of Acumatica ERP.
Course Prerequisites
Before starting this course, you have to complete the F100 Financials: Basic course to have an
understanding of the configuration and processes that are performed in the General Ledger, Accounts
Payable, and Accounts Receivable financial modules.
In the examples of this course, you will use sample settings of configuration entities (such as posting
classes) and master records (such as inventory items); you will also process sample transactions and
business processes (such as those for inventory management, purchasing, order fulfillment). These sample
settings, records, transactions, and processes are presented to illustrate the functionality of the Distribution
suite modules of Acumatica ERP. In production systems, you have to specify the configuration entities and
perform the processes as required by government regulations and the company's business requirements.
| How to Use This Course | 8
How to Use This Course

This course is for completion on Acumatica ERP 6.0. To complete the course, you have to deploy an
instance of Acumatica ERP for training, complete the lessons from each part of the course in the order
in which they are presented, and pass the assessment tests. The detailed steps are as follows:
1. By using the Acumatica ERP Configuration Wizard 6.0, create a company with the MyCompany
login company name and F300 data on an instance of Acumatica ERP 6.0. (You can find the
detailed instructions below.)
The F300 data contains the configuration and sample documents similar to the result of the F100
Financials: Basic course. You will continue to develop this configuration and implement more
processes in this course.
2. Start with Part 1, and complete the lessons dedicated to Inventory.
3. On Acumatica University, take Test 1: Inventory.
4. From Part 2, complete the lessons dedicated to Purchase Orders.
5. On Acumatica University, take Test 2: Purchase Orders.
6. From Part 3, complete the lessons dedicated to Sales Orders.
7. On Acumatica University, take Test 3: Sales Orders.
After you pass all assessment tests, you will get the Acumatica University certificate of course
completion.
What Is in a Part?
Each of the three parts of the course is dedicated to a particular Acumatica ERP module and consists of
lessons you are supposed to complete. Each part begins with a Company Story topic that explains the
situation in which you are going to use Acumatica ERP in the lessons of the part.
What Is in a Lesson?
The lessons consist of steps that outline the procedures you're completing and describe the related
concepts you are learning. At the end of each step, under the Related Links section, you can find links
to detailed information about the concepts and forms used in the step. At the end of each lesson, the
Additional Information topic provides links to additional concepts that you might be interested in but
these concepts are outside of the scope of the course.
How Should I Use Practice Exercises?
Practice exercises cue you to retrieve from memory the information that you have just learned and
thereby help you to learn more effectively. We recommend that you spend some time on practice
exercises that are provided at the end of the course. You are supposed to complete the exercises after
you have finished all the lessons of the course, so that the documents and transactions that you create
during the exercises will not change the data that is referred to in the examples of the course. You may
skip the practice exercises and complete only the course lessons. Also, you can use practice exercises to
refresh your memory on the course material over time.
What Are the Documentation Resources?
All the links refer to the https://docref.acumatica.com/ website to which you can log in with your
Partner Portal account. The same documentation is included in the Acumatica ERP instance, under the
Help menu.
How to Create a Company with the Needed Data

You can add a company with the needed data during the deployment of a new Acumatica ERP instance,
or after the instance has been deployed.
Below are the instructions to add a company with the F300 data to an existing Acumatica ERP instance.
If you are deploying a new instance, perform instruction 4 on the Company Setup step of the Acumatica
ERP Configuration Wizard. Do the following:
| How to Use This Course | 9
1. Open the Acumatica ERP Configuration Wizard and click Perform Application Maintenance.
2. On the Application Maintenance page of the wizard, click the Company Maintenance button.
3. In the SQL Server Authentication dialog that appears, specify the credentials for connecting
to the database server and click OK. The Company Setup page opens.
4. To create a new company, click New, and in the Insert Data column, select the F300 data to be
preloaded.
5. Click Next, and on the Confirm Configuration page, click Finish.

The system will add a new company to the Acumatica ERP instance and preload the selected
data. The first login is admin and the password to log in to the new company is setup, and then
you will be asked to change the password as needed.
| Part 1: Inventory | 10
Part 1: Inventory
In this part of the course, you will learn the basics of configuring and using the Inventory module for
the following operations:
Maintaining the catalog of stock items and non-stock items
Processing inventory transactions
Analyzing the cost of inventory
Analyzing the item availability in warehouse
Reconciling the cost of inventory with the balance of general ledger accounts
Closing financial periods in the Inventory module
Performing physical inventory
Configuring multiple units of measure for use in transactions with an item
| Company Story: Inventory | 11
Company Story: Inventory

MyCompany opens a small retail shop of laptops, laptop accessories, and supplementary devices,
and needs to manage inventory. The company does not have many inventory items; all units will be
received, stored, and issued from one "warehouse", which corresponds to a physical storage area in the
shop.
The company is going to offer the following to its customers:
Laptops, which are the company's main goods
Supplementary devices
Computer services
The company is going to sell two laptop models: 12-inch laptop and 14-inch laptop. The supplementary
goods are a computer mouse, headset, computer keyboard, 26-inch monitor, and leather laptop case.
Also, the company will provide the computer services to customers: software installation and setup,
computer diagnostic, and virus and spyware removal.
Inventory Structure
To represent the company's inventory, you will use a configuration with one warehouse (which is
actually a storage area in the shop). The goods are received to and issued from this warehouse. The
storage area is small and has no designated locations.
Inventory Valuation
You will use the average costing method for items tracked in inventory.
Operational Activity
The company starts inventory operations in the 05-2014 period. In this period, the company receives its
first goods and processes the first inventory transactions in the system.
In 06-2014, the company continues its operational activity. By the end of 06-2014, the company
conducts the first physical inventory. At the end of 06-2014, the accountant closes the books for the
first half of the financial year in the system.
| Lesson 1: Introduction to Inventory | 12
Lesson 1: Introduction to Inventory

In the lesson, you will configure the Inventory module, which is the first required step to set up
inventory management in the system.
Lesson Objectives
In this lesson, you will learn to provide the initial configuration for the Inventory module. You will do the
following:
Learn how the financial and distribution modules are integrated with one another
Enable the features that provide the basic functionality of modules of the Distribution suite
Define the reason codes for inventory entries
Specify the minimum required configuration for the Inventory module

| Integrated Financial and Distribution Modules of Acumatica ERP | 13
Integrated Financial and Distribution Modules of Acumatica

ERP
In the F100 Financials: Basic course, you were already introduced to the modules of the Finance suite
of Acumatica ERP, which include General Ledger, Cash Management, Accounts Payable, and Accounts
Receivable. In this course, you will be introduced to the functionality of the Inventory, Purchase Orders,
and Sales Orders modules of the Distribution suite. The financial modules are integrated with the
modules of the Distribution suite of Acumatica ERP as illustrated on the diagram below. Together,
the modules of the Finance and Distribution suites provide integrated financial accounting, inventory
management, purchasing, and order fulfillment.
The Inventory module provides inventory management to help you control costs and the availability of
goods. For financial accounting processes, the Inventory module is integrated with the General Ledger
module. When you process an inventory receipt or issue goods from inventory, the module generates
the corresponding general ledger transactions (1 on the diagram). At the end of an accounting period,
you can verify the inventory account balance by comparing the cost of inventory on hand with the
inventory account balance in the General Ledger module. After all figures have been verified and
disclosed in financial reports, you can close the financial periods in the Inventory module to prevent
posting to the periods new transactions from the module.
For purchasing processes, the Inventory module is integrated with the Purchase Orders module. From
the Purchase Orders module, inventory receipts are generated when goods are received to inventory
(2) and the corresponding bills are generated in the Accounts Payable module (3); these bills should be
paid to vendors for the received goods. In the Inventory module, you can review the received goods,
the quantity of goods on purchase orders, and the goods in transit to inventory. Purchase orders can
also be generated from the Purchase Requisitions module (6).
For order fulfillment processes, the Inventory module is integrated with the Sales Orders module. From
the Sales Orders module, inventory issues are generated when goods are issued from inventory (4)
and the corresponding invoices are generated in the Accounts Receivable module (5); these invoices
should be paid by customers for the shipped goods. The catalog of sales prices is maintained in the
Accounts Receivable module and used in the Sales Orders and Accounts Receivable modules. In the
Inventory module, you can review the shipped goods, the goods requested for sales orders, and the
goods allocated for sales orders.
The only modules that generate general ledger transactions during the purchasing and order fulfillment
processes are the Inventory, Accounts Payable, and Accounts Receivable modules. The Purchase Orders
and Sales Orders modules do not generate general ledger transactions directly.
Figure: Integration of the financial and distribution modules of Acumatica ERP

| Inventory Entries and Transactions | 14
Inventory Entries and Transactions

This course distinguishes the following concepts that are used in the system:
Inventory entry. A detail line on the following data entry forms of the Inventory module:
Receipts (IN301000)
Issues (IN302000)
Adjustments (IN303000)
Transfers (IN304000)
Kit Assembly (IN307000)
Inventory entries are mainly recorded for stock items. In particular processes, the system may
also create inventory entries with non-stock items, though those entries do not update inventory.
You can observe inventory entries with stock items on the Inventory Transaction History form
(IN405000).
On release of inventory entries with stock items, inventory transactions are recorded in the
Inventory module, and the batches of general ledger transactions are generated in the General
Ledger module.
On release of inventory entries with non-stock items, only the batches of general ledger
transactions are generated in the General Ledger module.
Inventory transaction. An inventory update record that is saved in the Inventory module on
release of an inventory entry with a stock item. Inventory transactions are listed by inventory
account on the Inventory Transactions by Account form (IN403000).
| Step 1.1: Enabling the Distribution Suite in the System | 15
Step 1.1: Enabling the Distribution Suite in the System

In this step, you will enable the needed features to be able to configure and use the modules of the
Distribution suite.
In this course, you will use one warehouse, called MAIN, which is created in the system by default after
you save any first entity in the Inventory module. For that warehouse, the system also creates the
default MAIN location to which the goods will be received and issued from in all sample transactions
that you will process in this course.
If you wanted to configure more warehouses in the system, you would have to enable the Multiple
Warehouses feature, which you do not need to enable in this course. This feature can be enabled after
the processing of inventory transactions is started in one warehouse, and more warehouses can be
added later without the need to reconfigure the system from scratch. If Multiple Warehouses is off, the
ID of the only warehouse, MAIN, is not displayed on data entry forms for simplicity reasons. However,
this warehouse ID will be used automatically in all inventory transactions. For more information about
multiple-warehouse configurations, see the reference in the Additional Information section of this
lesson.
Perform the following instructions:
1. On the Enable/Disable Features form (CS100000; Configuration > Common Settings >
Licensing), click Modify to be able to activate more features in the system.
2. Select the Distribution check box, as shown in the screenshot below. Leave the other check
boxes as is.
By enabling the root Distribution feature, you will activate the basic functionality of the following
modules:
Inventory
Purchase Orders
Sales Orders
The basic functionality provides one default warehouse, and allows you to configure purchase
order processing for regular orders and configure sales order processing with predefined order
types. This course covers the basic functionality of the modules.
Be advised that each particular feature may be subject to additional licensing; please consult the
Acumatica ERP sales policy for details.
Figure: The Distribution suite selected for enablement in the system
3. Click Enable on the form toolbar.

As soon as you click Enable, the main modules of the Distribution suite appear in the
application's main menu, as the screenshot below shows.
Figure: The main modules of the Distribution suite in the application's menu
Now you can configure the Inventory, Purchase Orders, and Sales Orders modules. When you are
configuring a production system, you have to start with the Inventory module, then you can configure
the Purchase Orders and Sales Orders modules in any order.
For training purposes, you enable features and configure the functionality that is introduced in this course
directly before you use it in sample processes and transactions; this approach helps learning. When you
are configuring a production system, you have to enable all necessary features and create the required
configuration entities (such as numbering sequences, units of measure, and classes that are used to create
individual entities) from the very beginning, before any master records are entered and any transactions
and documents are processed.
Related Links
Overview of the Acumatica ERP Features
Enable/Disable Features (CS100000)
| Step 1.2: Adding the General Ledger Accounts | 18
Step 1.2: Adding the General Ledger Accounts

In this step, you will add to the chart of accounts new accounts that will be used in the general ledger
transactions generated from the Inventory module. Perform the following instructions:
1. On the Chart of Accounts form (GL202500; Finance > General Ledger > Configuration
> Manage), click Load Records From File, and upload the new accounts from the
Distr_Basic_COA.xlsx Excel file provided for the course with the default upload parameters.
2. Click Save to save the added accounts.
3. On the Chart of Accounts form (GL202500), for the 130000 - Merchandise Inventory account set
Post Option to Detail and save the changes (see the screenshot below).
You set this option to always have detail journal entries on the 130000 - Merchandise Inventory
account. If Post Option is set to Summary, the system produces journal entries with summary
amounts to be posted to the account, depending on the Post Summary on Updating GL
setting of the module where the account is used. If the Post Summary on Updating GL check
box is selected, the system summarizes the amount by document lines that should be posted to
the account and generates one journal entry with the summary amount per document. You will
see an example later in this course.
Figure: Specifying the posting of detail journal entries to the account
From the Excel file, you have added the following accounts, which are the minimum accounts that you
need for the Inventory module according to the requirements of MyCompany:
130000 - Merchandise Inventory asset account.
This is the inventory account that holds the value of goods in inventory. The account will be used
in inventory transactions. The value of the goods is debited to the inventory account when the
goods are received to inventory, and credited when the goods are removed from inventory.
213000 - Accrued Purchases - Inventory liability account.
This account accrues the value of purchased goods that have been received to inventory before
the appropriate accounts payable bill is processed. The account will be used for purchase order
processing later in this course. It will be credited when the goods are received to inventory, and
debited in the accounts payable bill.
230000 - Accrued Expenses liability account.
This account accrues the cost of services purchased by the company until the appropriate
accounts payable is processed. This account will be used with purchase order processing later
in this course. It will be credited when the services are obtained, and debited in the accounts
payable bill. (The account existed earlier in the preloaded data.)
The following expense accounts for the cost of goods sold and other expenses related to
inventory:
520000 - Inventory Adjustments expense account.
The account that accumulates the loss from damaged or lost goods and the cost variance
that might take place in the process of purchase returns. The account will be used with
inventory transactions in this part of the course. The losses are debited to the account.
530000 - Cost of Goods Sold expense account.
This account accumulates the cost of goods sold. The account will be used with inventory
transactions in this part of the course, and in the sales order processing in the last part of
the course. The cost of goods sold is debited to the account when the goods are issued for
sale from inventory.
550000 - Computer Services expense account.
This account, which will be used in the second part of the course, accumulates the costs of
service work that is performed by a third-party service company. The account is debited in
the amount of the bill that is received from the service company on a monthly basis.
596000 - Purchase Returns expense account.
This account, which will be used in the second part of the course, accumulates the
difference between the cost of goods that are issued from inventory to be returned to the
vendor and the purchase price in the debit adjustment that is processed upon the purchase
return. The account is debited in the amount of the issued cost and credited in the amount
of the debit adjustment.
The following income accounts for the sales revenue from different items:
431000 - Sales - Laptops income account.
This account accumulates the sales revenue from laptops; it is credited in the sales
transaction. The account will be used in the first and last parts of the course.
432000 - Sales - Supplements income account.
This account accumulates the sales revenue from supplementary devices and is credited in
the sales transaction. The account will be used in the last part of the course.
455000 - Sales - Computer Services income account.
This account accumulates the sales revenue from computer services; it is credited in the
sales transaction. The account will be used in the last part of the course.
495000 - Sales Returns income account.
This account, which will be used in the third part of the course, accumulates the difference
between the cost of goods that are receipted to inventory from the customer and the
sales price in the credit adjustment that is processed upon the sales return. The account
is credited in the amount of the receipted cost and debited in the amount of the credit
adjustment.
One account could be enough for sales revenue from laptops and supplementary devices.
However, in the example of this course, the company wants to see the sales revenue broken down
by the two main categories of goodsthat is, laptops and supplementary devices. Therefore,
two accounts have been added, 431000 - Sales - Laptops and 432000 - Sales - Supplements,
to segregate the revenue sources. The third account, 455000 - Sales - Computer Services,
will accumulate the sale revenue from the related computer services. The company could also
require different cost of goods sold accounts for laptops and supplementary devices; however, we
skipped that requirement in the training to keep the chart of accounts simpler. As an alternative
to segregation of revenue sources by accounts, a single account could be used with a set of
subaccounts that correspond to revenue sources.
In addition to the accounts listed above, two extra accounts have been added to the chart of accounts
for only the examples of inventory transactions that you will process in the first part of the course.
These extra accounts aren't used for integrated purchase order processing and sales order processing,
which are demonstrated in this course. However, you might want to use these accounts in case if
purchase orders and sales orders are processed in a third-party system that is integrated with the
Inventory module and the Finance suite of Acumatica ERP.
215000 - Inventory Accrual liability account.
This account accrues the value of purchased goods that have been received to inventory but
not yet reconciled with the appropriate accounts payable bill. The value of the received goods is
credited to the accrual account when the goods are received to inventory.
After you have processed an inventory receipt, you can manually create (or import) the
corresponding accounts payable bill in the Accounts Payable module in the amount that should be
paid to the vendor for the received goods (which matches the accrued amount). In the second part of
the course, you will use the purchase order processing functionality that automates this process.
190000 - AR Clearing asset account.

This account accumulates the receivable amount that is recorded to the AR clearing account when
you process an inventory issue that generates an additional sales transaction along with the cost
of goods sold transaction. The AR clearing account is debited in the sales transaction.
After you have processed the inventory issue with the transaction to the AR clearing account, you
can manually create (or import) the corresponding accounts receivable invoice in the amount that
should be paid by the customer and cleared from the intermediate AR clearing account. In the last
part of the course, you will use the sales order processing functionality that automates this process.
And, you will also need the last two accounts for processing income and expenses from delivery
services that you will provide to customers and process from the Sales Orders module later in this
course:
480000 - Sales - Delivery Services income account.
This account accumulates the sales revenue from delivery services provided to customers when
they buy goods. This account will be used in the last part of the course. It is credited by the
freight amount in the sales transaction.
580000 - Delivery Services Expense expense account.
This account accumulates the costs of delivery services that are executed by a third-party carrier.
This account can be used in additional practice exercises at the end of this course. It is debited in
the amount of the accounts payable bill that the company receives from the contracted carrier on
a monthly basis.
Now you can proceed to creating the reason codes that are required for the configuration of the
Inventory module.
Related Links
Chart of Accounts (GL202500)
| Step 1.3: Configuring the Reason Codes for Inventory Entries | 21
Step 1.3: Configuring the Reason Codes for Inventory Entries

In this step, you will define reason codes. Reason codes specify the reasons of inventory transactions
and the accounts to be used the general ledger transactions are posted.
You have already seen the examples of reason codes for balance and credit write-off transactions in
the Accounts Receivable module in the F100 Financials: Basic course. Similarly, reason codes are used
for inventory transactions. On release of an inventory entry, the system generates a general ledger
transaction to the inventory account and the account that is specified in the reason code.
Reason codes are required for configuration of the Inventory module for the following inventory entries:
Inventory receipts, which can be manually entered on the Receipts form (IN301000).
Inventory issues with the Issue and Return transaction types, which are created on the Issues
form (IN302000).
Inventory adjustments, which are created on the Adjustments form (IN303000).
Reason codes are required for the configurations of the Inventory and Purchase Orders modules and
can be used in the Sales Orders module, which is described later in this course.
Define the reason codes as described below.
1. On the Reason Codes form (CS211000; Distribution > Inventory > Configuration > Setup),
define the INRECEIPT reason code (as shown on the screenshot below) with the following
settings:
Reason Code: INRECEIPT
Description: Inventory receipt
Usage: Receipt
Account: 215000 - Inventory Accrual
The Receipt usage means that the reason code can be used on the Receipts form (IN301000).
You will use the INRECEIPT reason code to process the general ledger transaction for a receipt of
goods to inventory. This reason code specifies the following general ledger transaction:
Inventory account, Dr
215000 - Inventory Accrual, Cr
The source of the inventory account for transactions is described later in the course.
Figure: The INRECEIPT reason code
2. On the Reason Codes form (CS211000), define the INADJ reason code:
Reason Code: INADJ
Description: Inventory adjustment
Usage: Adjustment
Account: 520000 - Inventory Adjustments
| Step 1.3: Configuring the Reason Codes for Inventory Entries | 22
The Adjustment usage means that the reason code can be used on the Adjustments form
(IN303000) or on the Physical Inventory Review form (IN305000). You will use the INADJ reason
code to process the GL transaction when you adjust the cost and quantity of goods in inventory.
This reason code specifies the following general ledger transactions:
520000 - Inventory Adjustments, Dr/Cr
Inventory account, Cr/Dr
3. On the Reason Codes form (CS211000), define the INLOSS reason code:
Reason Code: INLOSS
Description: Inventory damage/loss
Usage: Issue
Account: 520000 - Inventory Adjustments
The Issue usage means that the reason code can be used on the Issues form (IN302000).
You will use the INLOSS reason code for an inventory issue with the Issue transaction type to
process the GL transaction when you remove a damaged good from inventory. This reason code
specifies the following general ledger transaction:
520000 - Inventory Adjustments, Dr
Inventory account, Cr
You don't have to specify the Sales Account setting in the reason code. The sales account can
be specified in Issue reason codes for use from the Sales Orders module, which is described later
in this course. Sales Account from the reason code can also override the sales account in the
additional sales transaction that can be generated from an inventory issue (an example of such
issue is described later in this course). Once specified in a sales order, Issue reason code may
override the sales and COGS accounts in the transactions that are then generated from the AR
invoice and inventory issue. Sales reason code can be specified in a sales order to override the
sales account.
Now the reason codes for inventory entries are ready, and you can specify the configuration settings for
the Inventory module.
Related Links
Reason Codes: Definition and Usage
Reason Codes (CS211000)
| Step 1.4: Configuring the Inventory Module | 23
Step 1.4: Configuring the Inventory Module

In this step, you will specify the initial configuration of the Inventory module to make the module ready
for use.
To configure the module, on the Inventory Preferences form (IN101000; Distribution > Inventory >
Configuration > Setup), specify the following settings for the module:
1. Select the Update GL check box.
In the Inventory module, you can have inventory transactions that are not linked to general
ledger transactions. After you select the Update GL check box, the system starts generating
GL transactions when you release inventory entries. If the Update GL check box is cleared, the
system doesn't generate journal transactions when you release inventory entries.
2. Select the Post Summary on Updating GL check box.
This setting works similarly to the Post Summary on Updating GL setting in the Accounts
Payable and Accounts Receivable modules. For each GL transaction generated from the module,
the result of posting depends on the combination of the Post Summary on Updating GL
setting of the module and the Post Option setting of the accounts on the Chart of Accounts
form (GL202500; Finance > General Ledger > Configuration > Manage). The Post Option
setting specifies whether the system can summarize the amounts to be posted to the general
ledger account. If the Post Option is Summary, the summary posting is allowed for the
account. If the Post Option is Detail, the posting of summaries is not allowed for the account,
and the system will always produce detailed journal entries to the account, regardless of the
Post Summary on Updating GL setting in the module. You will see an example later in this
course.
3. Select the Automatically Post on Release check box.
This setting works similarly to the Automatically Post on Release setting in the Accounts
Payable and Accounts Receivable modules. If the Automatically Post on Release check box is
selected, the system releases and immediately posts the batch of journal transactions that has
been generated on release of an inventory entry.
4. Specify the default reason codes:
Receipt Reason Code: INRECEIPT
Issue/Return Reason Code: INLOSS
Adjustment Reason Code: INADJ
Phys. Inventory Reason Code: INADJ
Default reason codes are used for inventory entries that are created on data entry forms in the
Inventory module. If you do not specify a reason code in a line on a data entry form, on release
of the entry, the system inserts the default reason code from the module preferences into the
transaction line according to the type of the inventory transaction, and posts the GL entry to the
account specified in the reason code.
The system inserts the specified Phys. Inventory Reason Code by default into a count review
document that is created on the Physical Inventory Review form (IN305000). (Physical inventory
is described later in this course.)
5. In the Weight UOM box, select KG.
In this box, you have to specify the base unit of measure that can be used to calculate the total
weight of goods on a sales order. (Weight calculation is outside of the scope of this course.)
6. In the Volume UOM box, select LITER.
In this box, you have to specify the base unit of measure that can be used to calculate the total
volume of goods on a sales order. (Volume calculation is outside of the scope of this course.)
7. In the AR Clearing Account box, select 190000 - AR Clearing.
This setting is used only for transactions that originate from the Inventory module. This account
accumulates the receivable amount recorded to the AR clearing account when you process
| Step 1.4: Configuring the Inventory Module | 24
an inventory issue that generates a sales transaction along with the cost transaction. These
transactions are described later in this course.
8. Save your changes to the form.
Now the Inventory module is ready for use; the data entry forms for stock items and for inventory
entries have become available. In the next lesson, you will create the catalog of items in the system.
We recommend that in your production systems, you specify different numbering sequences, which
differ at least by the prefix in the number, for different types of inventory entries. For example, you
can use identifiers such as R0000001 for inventory receipts and I0000001 for inventory issues. The
reference number of an inventory entry is recorded into the GL transaction that is generated from the
entry. When you use unique reference numbers between inventory entries you can more easily audit the
GL transactions. However, to simplify the configuration steps for this course, you use the default numbering
sequences, which are identical for all types of inventory entries: the first inventory receipt number will be
000001 and the first inventory issue number will be 000001 too.
Related Links
Overview (Inventory)
Inventory Preferences (IN101000)
| Additional Information | 25
Additional Information
You can use the following information for additional reading, but these concepts are outside of the
scope of this course.
Multiple Warehouses
You can configure a complex inventory structure with multiple warehousesfor example, a structure
that consists of the distribution center that receives goods from vendors and then transfers goods to
multiple retail warehouses from which the goods are shipped to customers. To be able to configure
multiple warehouses, you need the corresponding advanced feature of the Distribution suite. For more
information, see Warehouses and Warehouse Locations in the Acumatica ERP User Guide.
Warehouse Locations
You can use warehouse locations in one warehouse or in multiple warehouses. For more information,
see Warehouses and Warehouse Locations in the Acumatica ERP User Guide.
Kit Assembly
You can implement simple manufacturing processes as inventory transactions with kits. A kit
is a finished good or subassembly that is composed from raw material components during the
manufacturing process. For example, you can implement product bundling as kit production. Once
assembled, a kit can be selected on a sales order and sold to a customer. Disassembling of a kit
converts the finished good back into a set of raw material items. Once a kit is disassembled, another
kit can be produced from its components. For more information about the processing of kits, see
Accounting for Kits in the Acumatica ERP User Guide.
Calculation of the Total Weight and Volume of Goods on a Sales Order
In the configuration preferences of the Inventory module, you have to specify the base units of
measure that can be used for the calculation of weight and volume of goods on sales orders. Based
on the total weight and volume in a sales order, the system can calculate freight charges or suggest
a box for packing the order for shipping via FedEx, UPS, or USPS. For more information, see Freight
Calculation and Automatic Packaging in the Acumatica ERP User Guide.
| Lesson Summary | 26
Lesson Summary
The Inventory module is the only module of the Distribution suite that generates general ledger
transactions in the General Ledger module. The Purchase Orders and Sales Orders modules do not
generate general ledger transactions directly. Instead, they produce inventory receipts and inventory
issues in the Inventory module and documents in the Accounts Payable and Accounts Receivable
modules respectively.
In this lesson, you have configured the Inventory module for a simple inventory structure that consists
of one warehouse. The system creates one warehouse by default if you do not use the Multiple
Warehouses feature, and you can extend the configuration later, if needed. To be able to process
inventory transactions, you have defined reason codes that specify reasons and general ledger accounts
for the transactions to be generated in the General Ledger module. You defined these reason codes on
the Reason Codes form (CS211000) of the Inventory module. To make it possible to create the catalog
of stock items (which you will do in the next lesson), you have specified the module preferences on the
Inventory Preferences form (IN101000).
To make the system generate general ledger transactions from inventory entries, you have to select the
Update GL check box on the Inventory Preferences form (IN101000). Otherwise, the account balances
won't be updated in General Ledger when you release inventory entries.
| Lesson 2: Inventory Items | 27
Lesson 2: Inventory Items

In this lesson, you will create stock items that constitute inventory and create non-stock items that
represent computer services provided by MyCompany to its customers.
Lesson Objectives
In this lesson, you will learn to:
Create posting classes to define the GL accounts that should be updated by on release of
inventory entries
Create item classes that define how the quantities and costs of items are controlled in inventory
Create stock items
Create non-stock items

| Posting Classes | 28
Posting Classes
When you release an inventory entry in the Inventory module, the system creates the corresponding
general ledger transactions in the General Ledger module.
Posting classes specify how the system selects the GL accounts for posting. We recommend that you
define separate posting classes for stock items and non-stock items because they use different GL
accounts and participate in different types of transactions. To be able to create the catalog of items in
the system, you should define at least one posting class for stock items and another one for non-stock
items.
More information is provided in sections below.
Posting Classes for Stock Items
Posting Classes for Non-Stock Items
Posting Classes for Stock Items

Transactions with stock items are recorded to a certain inventory account. Posting class allows you to
specify the source of the inventory account that will be used for posting.
If you want to use a single inventory account for transactions with multiple items, you can specify the
needed account in a posting class, configure the posting class as the source of the inventory account,
and assign the posting class to the items that you want to record to that account. An example of such
settings is demonstrated in this course.
Along with the source of the inventory account, posting class specifies the sources for other accounts
that are used for transaction processing (such as COGS and PO Accrual accounts) and the default GL
accounts that are copied to the settings of newly-created stock items assigned to the posting class.
Posting class is a required parameter of a stock item. Posting classes that you create for stock items
on the Posting Classes form (IN206000; Distribution > Inventory > Configuration > Setup) have the
following settings:
1. GL Accounts tab. Default GL accounts that simplify data entry on the Stock Items form
(IN202500). The GL accounts from the posting class are copied to an item when you assign
the item to a posting class. If you change the posting class for the item, the GL accounts are
repopulated on the Stock Items form (IN202500) from the new posting class.
2. Posting Settings tab, Use Inventory/Accrual Account from. The source of the inventory
account for GL transactions generated from inventory entries with the item assigned to the
posting class. See Inventory Account for details.
3. Posting Settings tab, Use Sales Account from. The source of the sales account for GL
transactions generated from inventory issues of the Invoice, Debit Memo, Credit Memo
transaction type entered from the Issues form (IN302000) with the sales transaction information
in the line. When you release such inventory issue, the system generates the general ledger
transaction to the sales account from the source that is specified in the posting class. (You will
see an example later in this course.)
4. Posting Settings tab, Use COGS/Expense Account from. The source of the COGS account
for GL transactions generated from inventory issues of the Invoice, Debit Memo, Credit Memo
transaction type. When you release such inventory issue, the system generates the general
ledger transaction to the COGS account from the source that is specified in the posting class.
5. Posting Settings tab, Use PO Accrual Account from. The source of the default accrued
purchase account to insert into a purchase receipt with the stock item assigned to the posting
class. (You will see an example later in this course.)
6. Posting Settings tab, other account settings. The settings specify the account sources for other
GL transactions, which are outside of the scope of this course.
| Posting Classes | 29
The summary of GL transactions that are produced with a stock item in the system are outlined in
Appendix B: GL Transactions Outline.
Posting Classes for Non-Stock Items

As soon as you have activated the modules of the Distribution suite, you can assign a posting class to
a non-stock item to populate the GL accounts in the item settings and specify the accounts sources for
posting.
The posting class settings are used for non-stock items in the general ledger transactions that are
generated during the purchase order processing, sales order processing, and the processing of kits with
non-stock items. All other processes, for example, contract billing and project accounting, use the GL
accounts specified in the item settings on the Non-Stock Items form (IN202000).
Posting classes that you create for non-stock items on the Posting Classes form (IN206000; Distribution
> Inventory > Configuration > Setup) have the following settings:
1. GL Accounts tab. Default GL accounts that simplify inventory item entry on the Non-Stock
Items form (IN202000). The GL accounts from the posting class are inserted into an item when
you assign the item to a posting class. If you change the posting class for an item, the GL
accounts are repopulated in the item from the new posting class.
2. Posting Settings tab, Use Inventory/Accrual Account from. The source of the accrued
expense account for processing kit assembly transactions with non-stock components. Kit
assembly transactions are outside of the scope of this course.
3. Posting Settings tab, Use Sales Account from. This setting is not used for non-stock items.
4. Posting Settings tab, Use COGS/Expense Account from. The source of the default expense
account to insert into a purchase order with the non-stock item assigned to the posting class.
5. Posting Settings tab, Use PO Accrual Account from. The source of the default accrued
expense account to insert into a purchase receipt with the non-stock item assigned to the
posting class. (You will see an example later in this course.)
6. Posting Settings tab, other account settings. The settings specify the account sources for other
GL transactions, which are outside of the scope of this course.
The summary of GL transactions that are produced with a non-stock item in the system are outlined in
| Inventory Account | 30
Inventory Account
The logic that is described below applies to inventory account and subaccount, however examples with
subaccounts are outside of the scope of this course.
When you receive items to inventory, the system debits the received cost to the inventory account that
is retrieved from the source according to the Use Inventory/Accrual Account from setting of the
posting class. When you issue items from inventory, the system credits the inventory account to which
the items have been earlier received.
If you do not enable the Multiple Warehouses feature, you can use posting class or inventory item as
the source of the inventory account. This configuration is demonstrated in this course.
If you enable the Multiple Warehouses feature, additional settings become available. (You don't have to
enable this feature in this course.) With the Multiple Warehouses feature, you can:
Use posting class, inventory item, or warehouse as the source of the inventory account.
For example, you can have one inventory account by warehouse. In this case, you can specify the
needed inventory account in the warehouse settings on the Warehouses form (IN204000) and
specify warehouse as the source of inventory account in the posting class.
Define a specific inventory account for a particular item-warehouse combination.
Item-warehouse settings are listed on the Warehouse Details tab of the Stock Items form
(IN202500). These entries are edited on the Item Warehouse Details form (IN204500). If the
Override Inventory Account/Sub. check box is cleared for a record on the Item Warehouse
Details form (IN204500), the system retrieves the inventory account from the source as specified
in the posting class when processing transactions for that item-warehouse combination. If the
check box is selected, the system uses the inventory account that is specified in the Inventory
Account box on the form and ignores the source setting of the posting class.
A new entry is added on the Item Warehouse Details form (IN204500) with the Override
Inventory Account/Sub. check box cleared by default. A new entry is added in the following
cases:
1. For the default warehouse of an item, as soon as you specify or change the default
warehouse for the item on the Stock Items form (IN202500).
2. For other warehouses, when you release the first inventory receipt to a new warehouse
(or other transaction that increases inventory, such as the receiving part of an inventory
transfer).
3. You can create it manually on the Item Warehouse Details form (IN204500).
Changing the Inventory Account for an Item

We recommend that you carefully plan inventory accounts and beware of accidental changing of the
inventory account for an item after you have started processing transactions with the item. Note that
if you change the posting class for an item on the Stock Items form (IN202500), the GL accounts are
repopulated in the item from the new posting class, which may affect the inventory account that is
used for transaction processing with the item if the source of the inventory account is set to Inventory
Item in the posting class. If you decide to define a specific inventory account for some item-warehouse
combinations, we also recommend that you do that at the very first step of configuration.
If you need to change the inventory account for an item after you have started processing transactions,
please be advised:
After you change the inventory account in settings, inventory receipts, as well as other
transactions that increase inventory, will start to process to the new inventory account retrieved
from settings.
Inventory issues will continue to clear the old inventory account until its balance is zero.
Inventory adjustments will be processed to the new inventory account retrieved from settings.
| Inventory Account | 31
If you want to transfer the item's balance to the new inventory account, we recommend that you follow
this procedure:
1. Create a temporary clearing asset account in GL, create issue and receipt reason codes to and
from the account.
2. Keeping the old inventory account in settings, clear the item balance from the old inventory
account: issue all quantity and cost of the item with the reason code that you have defined to
clear the balance of the old inventory account and record the balance to the temporary account.
3. Specify the new inventory account in settings.
4. Process a receipt of earlier issued quantity and cost with the reason code that you have defined
to record the balance back to the new inventory account and clear the balance from the
temporary account.
5. Make sure the temporary account balance is zero, and deactivate the account on the chart of
accounts.
After that, the balance is transferred to the new inventory account, and the item is ready for processing
next inventory transactions.
| Step 2.1: Creating the Posting Classes for Processing GL Transactions | 32
Step 2.1: Creating the Posting Classes for Processing GL

Transactions
In this step, you will create the posting classes that you will use for inventory items in this course.
MyCompany provides the financial reporting requirements that are listed in the table below; you have
already added the corresponding general ledger accounts to the chart of accounts in the system. The
requirements specify the accounts to which the sales revenue and the corresponding expenses should
be posted. Based on the listing, you have decided to create three posting classes: one posting class
per product type because you need to have different sales revenue accounts for them. The default
GL accounts will be copied to the items from the posting classes, which simplifies the creation and
maintenance of the item catalog.
# Product Income Statement Balance Sheet

Type
Sales Revenue Expense Inventory Accrued Accrued
Account Account Account Purchases Expenses
Account Account
1 Laptops 431000 - Sales - 530000 - Cost of 130000 - 213000 - Not used
Laptops Goods Sold Merchandise Accrued
Inventory Purchases -
Inventory
2 Supplemen- 432000 - Sales - 530000 - Cost of 130000 - 213000 - Not used
tary Supplements Goods Sold Merchandise Accrued
devices Inventory Purchases -
Inventory
3 Computer 455000 - Sales 550000 - Not used Not used 230000 -
services - Computer Computer Accrued
Services Services Expenses
Expense
Create the posting classes as described below.

1. On the Posting Classes form (IN206000; Distribution > Inventory > Configuration > Setup),
create the LAPTOP posting class:
a. Specify the class ID and description for the new class:
Class ID: LAPTOP
Description: Laptop
b. On the Posting Settings tab, specify Posting Class in all the account source settings that
you will use in this course, in particular:
Use Inventory/Accrual Account from: Posting Class
Use Sales Account from: Posting Class
Use COGS/Expense Account from: Posting Class
Use PO Accrual Account from: Posting Class
You want the system to take the inventory account and other accounts from the posting
class for processing GL transactions with the items that you will assign the LAPTOP
posting class.
Figure: Posting settings of the LAPTOP posting class
c. On the GL Accounts tab, specify the general ledger accounts to be used for laptops
according to the financial reporting requirements (see the screenshot below):
Inventory/Accrual Account: 130000 - Merchandise Inventory
Sales Account: 431000 - Sales -Laptops
COGS/Expense Account: 530000 - Cost of Goods Sold
PO Accrual Account: 213000 - Accrued Purchases - Inventory
d. Save the posting class.
Figure: The GL accounts specified in the posting class to be used for inventory item entry
The other accounts that you haven't specified in the posting class are not used for this
course. For more information on these accounts, see the last three references in the related
links below.
2. On the Posting Classes form (IN206000), create the SUPPDEVICE posting class:
Class ID: SUPPDEVICE
Description: Supplementary device
The Posting Settings tab: select Posting Class as the source for the accounts listed
below.
The GL Accounts tab:
Inventory/Accrual Account: 130000 - Merchandise Inventory
Sales Account: 432000 - Sales -Supplements
COGS/Expense Account: 530000 - Cost of Goods Sold
3. On the Posting Classes form (IN206000), create the CMPSERVICE posting class:
Class ID: CMPSERVICE
Description: Computer service
The Posting Settings tab: select Posting Class as the source for the accounts listed
below.
The GL Accounts tab:
Sales Account: 455000 - Sales - Computer Services
COGS/Expense Account: 550000 - Computer Services Expense
You will use this account to process purchase receipts with non-stock items for
expenses incurred when you purchase services. Purchase receipt processing is
described further in this course.
PO Accrual Account: 230000 - Accrued Expenses

You will use this account to process purchase receipts with non-stock items to
record the accrued liability that should be paid to the vendor for purchased services.
Purchase receipt processing is described later in this course.
Posting classes are ready. According to the specified settings, the GL transactions with stock items that
originate from the Inventory module will be processed as follows:
The inventory account for transactions that increase inventory, such as inventory receipts,
will be taken from the posting class settings specified on the Posting Classes form (IN206000).
The offsetting account will be taken from the reason code specified in the receipt line.
The inventory account for inventory adjustments, will be taken from the posting class
settings specified on the Posting Classes form (IN206000). The offsetting account will be taken
from the reason code specified in the adjustment line.
The inventory account for transactions that decrease inventory, such as inventory issues,
will be one to which the items were received earlier. The offsetting account for inventory issues
of the Issue and Return transaction type will be taken from the reason code specified in the
issue line. The COGS account for inventory issues of the Invoice, Credit Memo, and Debit Memo
transaction type will be taken from the posting class settings specified on the Posting Classes form
(IN206000).
The GL transactions with non-stock items that originate from the Inventory module will be also
processed to the accounts retrieved from the posting class settings specified on the Posting Classes
form (IN206000). You will see the examples later in this course.
Now you need to define at least one item class to be able to create stock items in the system.
Related Links
Posting Classes: Definition and Usage
Posting Settings
Posting Classes (IN206000)
Item Costs and Valuation Methods (Standard Cost Valuation Method)
Allocation of Purchase Price Variance
Landed Cost Tracking
| Item Classes | 36
Item Classes
Item class specifies how the inventory item quantity and cost is controlled in inventory. Item classes
specify:
1. Whether an item is a stock item, for which the system generates inventory transactions.
If you want to control the on-hand quantity and the cost of inventory for an item, you have to
create the item as a stock item in the system. For stock items, the system generates inventory
transactions, tracks the item quantities and cost in every transaction, tracks inventory by
warehouses, and tracks the item cost flow according to the specified valuation method. Item
class is a required parameter of a stock item, therefore, to be able to create stock items in the
system, you have to define at least one item class.
If you don't need to track an item through inventory, you can create the item as a non-stock
item in the system. For non-stock items, the system doesn't generate inventory transactions
and therefore doesn't track quantity and cost. Item class is not required for non-stock items,
however you can use it to provide default settings for non-stock items as it is demonstrated in
this course.
2. Default settings that simplify inventory item entry.
The default settings include the base unit of measure and tax category, which you can later
change in individual items. In item classes, you can configure custom attributes that the
inventory items may have in the system. We recommend that you define item classes at the
final step of inventory configuration. You can plan item classes so that they aggregate maximum
information about the groups of similar inventory items, including the references to the posting
classes. After you configure the item classes in this way, you will have to specify minimum
information for individual inventory items during the manual data entry or import, for example,
only Inventory ID, Description, and Item Class, while the rest of information will be automatically
populated in the items from the item classes.
3. Availability calculation settings that apply to the items of the item class.
The system tracks the on-hand quantity of items in inventory and calculates the available
quantity of items. Available quantity can be used for inventory planning and replenishment.
You might want to include anticipated goods in the available quantity, which you can specify
in the availability calculation settings. Unlike the default settings listed above, the availability
calculation settings are defined at the item class level only and cannot be changed in particular
items. To inventory items, the system applies the availability calculation settings that are
specified in their item class.
4. Negative quantity allowance setting that applies to the items of the item class.
By default, the system doesn't allow processing inventory transactions that lead to a negative
on-hand quantity of the item in inventory. You can remove this limitation in an item class. In the
same way as the availability calculation settings, the negative quantity allowance is configured at
the item class level only and cannot be changed in particular items.
5. The method of demand calculation for replenishment, which applies to the items of the item
class. (Inventory replenishment functionality is outside of the scope of this course.)
6. The configuration of custom attributes that items might have, for example, color and size. (The
use of custom attributes is outside of the scope of this course.)
| Step 2.2: Creating the Item Classes for Controlling Items in Inventory | 37
Step 2.2: Creating the Item Classes for Controlling Items in

Inventory
In this step, you will create the item classes that you will use for inventory items in this course.
For MyCompany products, you are given the inventory control requirements that are listed in the table
below. Based on the requirements, you have decided to create two item classes: one class for laptops
and supplementary devices (stock items), and another one for computer services (non-stock items).
# Product Inventory Valuation Availability Calculation Sales Purchase

Method UOM UOM
1 Laptops Stock Item Average Conservative; do not include Piece Piece
anticipated goods, deduct
anticipated withdrawals
2 Supplemen- Stock Item Average Conservative; do not include Piece Piece, Lot
tary devices anticipated goods, deduct
anticipated withdrawals
3 Computer Non-Stock Not used Not used Hour Hour
services Item
Before you create inventory items, you have to select the base unit of measure for each item. The item
cost is valuated in base units, and the base unit is used in physical inventory. All reports and inquiries
in the Inventory module show quantities in the base units of measure of items. The base unit has to be
the smallest unit among all possible purchase and sales units that can apply to the item to minimize
rounding inaccuracy. With that consideration, you have selected the following base units of measure for
products:
Laptop - piece (PC)
Supplementary device - piece (PC)
Computer service - hour (HOUR)
The piece (PC) unit of measure isn't defined in the system by default. Complete the following
instructions to define the PC unit in the system and create the item classes:
1. On the Units of Measure form (CS203100; Configuration > Common Settings > Common
Settings), add a new record that defines the new PC unit of measure in the global list of units of
measure in the system:
From Unit: PC
To Unit: PC
Multiply: Multiply
Conversion Factor: 1.00
Now you can select the PC unit as the base unit of measure for inventory items. Later in this
course, you will learn to define and use multiple units of measure for the same item.
2. On the Item Classes form (IN201000; Distribution > Inventory > Configuration > Manage),
create the STOCKITEM item class:
a. Specify the class ID and description for the new class:
Class ID: STOCKITEM
Description: Stock item
By selecting the Stock Item check box, you specify that the item class is a class of stock
items.
b. On the General Settings tab, specify the way the system controls and values the item in
inventory:
Stock Item: Selected
Item Type: Finished Good

Valuation Method: Average
Depending on Item Type, inventory items are used for different purposes in the system.
In the item class, you specify the default item type, which you can later change for a
particular item in the item settings. The item types for stock and non-stock items are
described later in this lesson.
Valuation Method defines the inventory valuation method for items. In the item class,
you specify the default valuation method, which you can override for a particular item in
the item settings. More information about the use of valuation methods is provided later
in this course.
c. On the General Settings tab, review the Availability Calculation settings and leave
them as is by default.
Availability calculation settings are defined for items at the item class level only. The
default settings satisfy the inventory control requirements listed in the table above. You
will learn more about item availability later in this course.
d. On the General Settings tab, in the Base Unit box, select the PC unit of measure.
In the item class, you have to specify the default unit of measure, which you can override
for a particular item in the item settings.
e. On the General Settings tab, in the Tax Category box, select EXEMPT to simplify new
item entry.
In the item class, you can specify the default tax category to be inserted into the item
settings.
Make sure you have configured the STOCKITEM item class as the screenshot below shows.
Figure: The STOCKITEM item class
On the Inventory Preferences form (IN101000), in the Default Item Class box, you can specify
the class that will be suggested for every new item that you enter on the Stock Items form
(IN202500).
create the NSTOCKITEM item class:
Class ID: NSTOCKITEM
Description: Non-stock item
The General Settings tab:
Stock Item: Cleared
Item Type: Non-Stock Item
Valuation Method: Standard
Tax Category: EXEMPT
Posting Class: CMPSERVICE
Base Unit: HOUR
If you create an item class for non-stock items, you have to specify Standard in the Valuation
Method box. Valuation methods apply to stock items only. Because the system doesn't generate
inventory transactions for non-stock items, valuation methods aren't applied to non-stock items.
More information is provided later in this course.
Now the item classes are ready, and you can create stock items and non-stock items in the system.
Related Links
Inventory Items
Item Costs and Valuation Methods
Availability Calculation
Units of Measure and Conversions
Item Classes (IN201000)
Units of Measure (CS203100)
| Inventory IDs | 40
Inventory IDs
When you create a stock item or non-stock item, you have to assign the item a unique ID that matches
the INVENTORY segmented key. In this course, you use the default configuration of the INVENTORY
segment key, which specifies manually assigned inventory IDs that consist of one 10-symbol Unicode
segment.
According to the Unicode edit mask, you can use any characters in the ID except for the prompt
character which is the underscore symbol (_) by default. The prompt character is a reserved symbol
in Acumatica ERP and cannot be used in any IDs in the system by default. However, for IDs that
are controlled with a segmented key, for example, inventory item IDs, you can change the prompt
character to another one and then you will be able to use the underscore symbol in the IDs. For more
information, see the description of the Prompt Character setting on the Segmented Keys form
(CS202000) in the Acumatica ERP User Guide.
For inventory items, you can use manually assigned or auto-numbered inventory IDs. Auto-numeration
of IDs is configured in the INVENTORY segmented key. Once configured, the auto-numeration is shared
between stock and non-stock items. You can review the configuration of the INVENTORY segmented key
on the Segmented Keys form (CS202000; Configuration > Common Settings > Segmented Keys).
If you have noticed that an item is assigned the wrong ID after you have created the item, you can
change the ID. To do this, select Actions > Change ID for the item on the corresponding Stock Items
(IN202500) or Non-Stock Items (IN202000) form. You can change the item ID even after you have
transactions with the item in the system. The history of documents and transactions that refer to the
item will be correspondingly updated with the new ID. However, if you change the ID, the auditing
of records may become very difficult over time especially after you have disclosed the item IDs in
inventory reports (the item ID in earlier printed reports will differ from the item ID in recently prepared
reports).
| Step 2.3: Creating a Stock Item | 41
Step 2.3: Creating a Stock Item

Stock items are goods that are reflected in inventory.
For stock items, the system generates inventory transactions and tracks the on-hand quantity and the
cost flow according to the valuation methods that apply to the items. To create stock items, you use the
Stock Items form (IN202500).
You have to activate the modules of the Distribution suite and configure the Inventory module to be
able to process transactions with stock items. Unlike non-stock, transactions with stock items have to
be processed starting from the Purchase Orders or Sales Orders module so that these modules generate
the proper inventory transactions and the corresponding AP and AR documents.
Stock items cannot be manually selected in Accounts Receivable invoices. In Accounts Payable bills, you
can select stock items, however the AP documents can only be released after all lines with stock items
are linked to the corresponding lines of the purchase receipts that have been released in the Purchase
Orders module.
The stock item types are used for information purposes only and designate the inventories that a
company may have:
Finished Good: Merchandise inventory. Use this type for finished good items that you sell to
customers. You will use only finished goods in this course.
Component Part: Raw material inventory. You can use this type for component items from which
intermediate assemblies and finished goods are produced during kit assembly processes. Kit
assembly processes are outside of the scope of this course.
Subassembly: Work in process inventory. You can use this type for intermediate assemblies from
which finished goods are produced during kit assembly processes. Kit assembly processes are
outside of the scope of this course.
Create the stock items as described below.
1. On the Stock Items form (IN202500; Distribution > Inventory > Work Area > Manage), create
the LAPTOP12 item as the screenshot shows:
Inventory ID: LAPTOP12
Description: Laptop 12"
Item Class: STOCKITEM
Posting Class: LAPTOP
As soon as you have specified the item class, the item type, valuation method, base unit of
measure, and tax category from the STOCKITEM item class have been copied to the item. After
you have specified the posting class, the GL accounts from the LAPTOP posting class are copied
to the item.
Figure: The LAPTOP12 stock item
In the example of this course, you have defined one item class STOCKITEM for all goods. In
this item class, you didn't specify the default posting class because the items of this class will be
assigned to different posting classes. You could specify the SUPPDEVICE posting class as default
one in the STOCKITEM item class; then on the laptop item entry you would have to change the
posting class to LAPTOP. Or, alternatively to having one item class, you could have created one
item class for laptops and another one for supplementary devices and specify the posting classes in
them.
2. On the Stock Items form (IN202500), create the LAPTOP14 item:

Description: Laptop 14"
Posting Class: LAPTOP
3. On the Stock Items form (IN202500), create the MOUSE item:
Inventory ID: MOUSE
Description: Computer mouse
Posting Class: SUPPDEVICE
4. On the Stock Items form (IN202500), create the HEADSET item:
This item has similar settings to MOUSE's. You can use the copy-paste functionality to enter
similar items. Select the MOUSE item on the form, select Copy on the form toolbar, click Add New
Record (+), type the ID of the new recordHEADSET, and then select Paste to insert the copy
of record under the new ID. After that, you have to change only the description of the item to
Headset and save the changes. If you are copy-pasting auto-numbered records, you don't have to
specify the ID before pasting a record.
You can use an import scenario to upload a large number of items into the system. Import
scenarios are outside of the scope of this course, see Additional Information for references.
Inventory ID: HEADSET

Description: Headset
5. On the Stock Items form (IN202500), create the KEYBOARD item:
Inventory ID: KEYBOARD
Description: Computer keyboard
6. On the Stock Items form (IN202500), create the MONITOR26 item:
Inventory ID: MONITOR26
Description: Monitor 26"
7. On the Stock Items form (IN202500), create the LEATHCASE item:
Inventory ID: LEATHCASE
Description: Leather case for laptops 12"-15"
Now the catalog of stock items is ready in the system.
Related Links
Inventory Items
Stock Items (IN202500)
| Step 2.4: Creating a Non-Stock Item | 44
Step 2.4: Creating a Non-Stock Item

Non-stock items aren't reflected in inventory. Non-stock items can be services and goods that are not
counted in inventory. To create non-stock items, you use the Non-Stock Items form (IN202000).
For non-stock items, the system doesn't generate inventory transactions and doesn't track the on-hand
quantity and the inventory cost flow. You cannot enter inventory transactions with non-stock items
directly from the Inventory module. The system doesn't generate expense transactions when you sell
non-stock items; therefore, inventory valuation methods aren't applied to non-stock items. For non-
stock items, you can specify the standard cost and use this cost in Accounts Payable bills.
Though the non-stock items aren't reflected in inventory, you can configure the system for processing
purchase receipts with the non-stock items from the Purchase Orders module. From a purchase
receipt, the system generates the inventory entry, and on release of the inventory entry the system
generates the GL transaction that accrues the purchasing expenses. You can also configure the system
for processing shipments of non-stock items in the Sales Orders module. The line with a non-stock
item can be printed for information in the shipment document; however, inventory issue will not be
generated for that line.
You can use non-stock items without activating the modules of the Distribution suite. You have already
seen the examples of non-stock items that specify service items in the Accounts Payable and Accounts
Receivable documents in the F100 Financials: Basic course. In this course, you will configure more
items for services provided by MyCompany to its customers.
Non-stock item types categorize items by the purpose of use in the system:
Non-Stock Item: Non-specific items. Use this type for goods and services that you purchase from
vendors and sell along with the stock items to customers.
Service: Service items. The system processes items of this type in the same way as items of the
Non-Stock Item type. You can use this type to distinguish service items from other non-stock
items for information purposes.
Charge: Charge items. The system processes items of this type in the same way as items of the
Non-Stock Item type. You can use this type to distinguish charge items from other non-stock
items for information purposes.
Labor: Labor items. Use this type for items that represent labor in the system to track labor costs
for project billing and contract billing. Project accounting and contract management is outside of
the scope of this course.
Expense: Expense items. Use this type for employees' expense items that you track by using the
Time and Expenses module. Employees' time and expense tracking functionality is outside of the
Create the non-stock items for computer services as described below.
1. On the Non-Stock Items form (IN202000; Distribution > Inventory > Work Area > Manage),
create the INSTLLTION item:
Inventory ID: INSTLLTION
Description: Software installation and setup service
Item Class: NSTOCKITEM
As soon as you have specified the item class, the system inserts the item type, posting class,
tax category, and the base unit of measure into the item settings. From the posting class, the
system copies the GL accounts to the item.
| Step 2.4: Creating a Non-Stock Item | 45
Figure: The INSTLLTION non-stock item
2. On the Non-Stock Items form (IN202000), create the DIAGNOSTIC item:

Inventory ID: DIAGNOSTIC
Description: Computer diagnostic service
3. On the Non-Stock Items form (IN202000), create the VIRREMOVAL item:
Inventory ID: VIRREMOVAL
Description: Virus and spyware removal service
Now the catalog of non-stock items is ready in the system.
Related Links
Inventory Items
Non-Stock Item Support
Non-Stock Items (IN202000)
Markup Percentage
You can calculate sales prices based on the markup percentage specified for inventory items. See Sales
Price Calculation in the Acumatica ERP User Guide for details.
Inventory Replenishment
You can automate generation of purchasing documents based on inventory replenishment settings. See
Managing Replenishment in the Acumatica ERP User Guide for details.
Custom Attributes of Items
For goods that have specific characteristics, such as material, size, or color, you can define these
characteristics as attributes of inventory items and specify these attributes for the items in the catalog.
You can design custom reports to analyze items by their attributes. You can define custom attributes
by means of configuration or customization. In item classes, you can configure the custom attributes
that inventory items might have, for example, color and size. You can configure attributes of different
value types such as combo box or free text, and specify which attributes are required and which values
they take. For custom attributes that you can define by means of configuration, see Inventory Item
Attributes in the Acumatica ERP User Guide for details. If you need more complex attributes or want
to design a specific UI layout for them, you can do this by means of customization. See Acumatica ERP
Customization Guide for details.
Project Accounting
You can record project activities, project costs and revenues in the system and prepare the reports on
the project budget and revenues. For more information, see Projects in the Acumatica ERP User Guide.
Contract Management
You can maintain the information about customer contracts in the system and automate the contract
billing. For more information, see Managing Contracts in the Acumatica ERP User Guide.
Tracking Employees' Time and Expenses
You can use the Time and Expenses module for time tracking and management of employees' time
cards and expense claims. For more information, see Time and Expenses in the Acumatica ERP User
Guide.
Uploading Records by Using Import Scenarios
You can compose an import scenario to automate the upload of multiple records from an external
source, for example, an Excel file. For more information and examples, log in to Partner Portal and see
the I100 Integration Scenarios training course.
Lesson Summary
In this lesson, you have learned to define the settings for processing GL transactions generated from
the Inventory module. You learned to define posting classes and item classes and create stock items
and non-stock items in the system.
Stock items are tracked in inventory. The system generates inventory transactions with stock items. For
inventory valuation of stock items, you can use standard costing, average costing, FIFO, and specific
identification methods.
Non-stock items aren't tracked in inventory. The system doesn't generate inventory transactions with
non-stock items. For non-stock items, you can specify the standard cost that is suggested when you
select the item in an Accounts Payable bill.
| Lesson 3: Inventory Transactions | 48
Lesson 3: Inventory Transactions

In this lesson, you will learn to process the following inventory transactions: receipts, issues, and cost
adjustments. You will see how to quickly add items to inventory transactions by using the Inventory
Lookup dialog. After you process the inventory transactions, you will review the cost and quantity of
items in inventory by using the Inventory Valuation report (IN615500).
Lesson Objectives
In this lesson, you will learn to perform the following tasks:
Process an inventory receipt
Process an inventory issue
Make a cost adjustment to inventory
Review the total cost and quantity of items in inventory by using the Inventory Valuation report
(IN615500)
Add items to inventory transactions by using the Inventory Lookup dialog

| Inventory Transaction Processing | 49
Inventory Transaction Processing

The system implements perpetual inventory. Inventory transactions update the on-hand inventory in
the order as the corresponding inventory entries have been actually released in the system.
Inventory transactions are records in the inventory account, which you can view on the Inventory
Transactions by Account form (IN403000; Distribution > Inventory > Work Area > Explore). Every
inventory transaction is recorded to a certain inventory account in the Inventory module with the
information similar to the information of a GL transaction, which includes the inventory transaction
type, inventory item, warehouse, debit or credit amount, financial period (the post period of the
corresponding GL transaction), transaction date, quantity, and cost.
Inventory transactions and the corresponding general ledger transactions are processed in the base
currency only. You can use multiple currencies in the system, maintain price lists and process purchase
orders and sales orders in foreign currencies; the corresponding inventory receipts and inventory issues
will be created in the base currency. (Processing documents in other than base currency is outside of
the scope of this course.)
You can process the following inventory transactions which are produced from the corresponding
inventory entries:
Inventory receipt: This transaction occurs when you receive goods to inventory. This transaction
increases inventory. On the Receipts form (IN301000), you can enter inventory receipts manually
and view all receipts that have been created in the system. Inventory receipts are generated from
the Purchase Orders module when you process a purchase.
Inventory adjustment: This transaction occurs when you adjust the cost or quantity of items in
inventory. You can decrease or increase the cost or on-hand quantity of items by using inventory
adjustments. On the Adjustments form (IN303000), you can enter inventory adjustments
manually and view all inventory adjustments that have been created in the system. Inventory
adjustments are generated when you process the result of physical inventory that mismatches the
book quantity in the system.
Inventory issue: This transaction occurs when you remove goods from inventory or process a
sales return. This transaction updates inventory according to the transaction type of the issue.
On the Issues form (IN302000), you can enter inventory issues manually and view all inventory
issues that have been created in the system. Inventory issues are generated from the Sales
Orders module when you process a sales order or return, and also generated from the Purchase
Orders module when you process a return to vendor.
Inventory transfer: This transaction occurs when you transfer goods between locations within
a warehouse, or between warehouses. This transaction decreases inventory in the source
warehouse and increases inventory in the receiving warehouse. Inventory transfers are outside of
the scope of this course.
Kit production: This transaction occurs during a manufacturing process when you produce a new
kit assembled from components. If a kit is a stock item, this transaction increases the on-hand
quantity of kits and decreases the on-hand quantity of its stock item components (if any). The
cost of the produced kit may include extra costs, for example, labor costs, added by means of
non-stock item components. This may result in a greater cost of the stock kit in inventory than
the sum of its stock components. Kit production is outside of the scope of this course.
Kit disassembling: This transaction occurs during a manufacturing process when you disassemble
a kit into components. If a kit is a stock item, this transaction decreases the on-hand quantity of
kits and increases the on-hand quantity of stock components (if any). The system generates an
inventory adjustment to the extra cost that the disassembled kit has, if any. Kit disassembling is
outside of the scope of this course.
Because "inventory transaction" and "inventory entry" are very close concepts, in the next paragraphs,
just "inventory transaction" will be used for short unless it is necessary to distinguish the concepts in
specific explanations..
| Inventory Receipt | 50
Inventory Transaction Entry
Posting General Ledger Transactions
Inventory Transaction Entry

If you use multiple warehouses and warehouse locations, in every inventory transaction, along with the
information that is further described for each transaction, you have to specify the warehouse and the
warehouse location where the items are moved or adjusted. In this course, you are not using multiple
warehouses and locations and you don't have to specify them in inventory transactions.
On the inventory transaction entry forms, there are control boxes that might be helpful during the
manual data input. Users are supposed to review the total quantity and cost of the transaction and
confirm the amounts in the control boxes. You can disable the control boxes by clearing the Validate
Document Totals on Entry check box on the Inventory Preferences form (IN101000).

During processing, an inventory transaction can have the following statuses:
On Hold: The transaction is being edited and cannot be released.
Balanced: The transaction is ready and can be released.
Released: The transaction has been released and has updated the ending inventory.
You have to release an inventory transaction to make the system update the ending inventory. If the
Hold Documents on Entry check box is selected on the Inventory Preferences form (IN101000),
the system assigns the On Hold status to every new inventory transaction by default. Otherwise, the
inventory transaction is assigned directly the Balanced status by default and the On Hold status is
skipped.
Posting General Ledger Transactions

On release of an inventory transaction, the system generates and releases the batch of general
ledger (GL) transactions if the Update GL check box is selected on the Inventory Preferences form
(IN101000). If the check box is cleared, the system doesn't generate GL transactions. You might need
to clear the check box to import historical inventory transactions without affecting the GL balances of
accounts if you migrate data into the system. Data migration is outside of the scope of this course.
To the batches of general ledger transactions that are generated from the Inventory module, the
system assigns the batch numbers according to the numbering sequence specified in the Batch
Numbering Sequence box on the Inventory Preferences form (IN101000).
The system immediately posts the GL transactions if the Automatically Post on Release check box is
selected on the Inventory Preferences form (IN101000).
Inventory Receipt
Inventory receipt increases inventory. The processing steps for inventory receipts are shown on the
diagram below.
Entering an Inventory Receipt
Releasing the Inventory Receipt
Processing General Ledger Transactions
Entering an Inventory Receipt

You can enter an inventory receipt manually on the Receipts form (IN301000; Distribution > Inventory
> Work Area > Enter). In a receipt line, you have to specify at least the following information about the
units being received (step 1 on the diagram below):
Inventory ID, which identifies the item in inventory.
Quantity, the received quantity of units in the unit of measure that you specify next.
UOM, unit of measure. By default, you can receive goods in the base unit of measure only.
However, you can enable multiple units of measure in the system to be able to process inventory
transactions with different units of measure for the same item, which is demonstrated later in this
course.
Unit Cost or Ext. Cost (extended cost) of the received units. If you specify the unit cost, the
system calculates the extended cost as the unit cost multiplied by quantity. Or, you can specify
the extended cost directly. The default Unit Cost is retrieved from the cost statistics at the
moment when you select the item in the receipt line. The cost statistics is described further in this
course.
Reason Code, if the reason code differs from the default one. Reason code specifies the
offsetting account for the general ledger transaction that should be created from the inventory
receipt. You can leave Reason Code empty, and the system will insert the default reason code
during the release of the inventory receipt. The default reason code is specified on the Inventory
Preferences form (IN101000) in the Receipt Reason Code box.
When you save the inventory receipt, the reference number is assigned to the receipt according to the
numbering sequence that is specified in the Receipt/Transfer Numbering Sequence box on the
Inventory Preferences form (IN101000). To prepare the inventory receipt for release, you have to save
the inventory receipt with the Balanced status (step 2 of the diagram).
Releasing the Inventory Receipt

You can release individual inventory receipts on the Receipts form (IN301000) and mass release
inventory entries on the Release IN Documents form (IN501000; Distribution > Inventory > Processes
> Daily) as step 3 of the diagram shows. During the inventory receipt release, the system takes the
following actions:
Updates the ending inventorythat is, increases the on-hand quantity by the quantity received
and increases the total cost of the item in inventory by the extended cost of each receipt line.
Records the Receipt transaction line to the inventory account, which you can view on the
Inventory Transactions by Account form (IN403000). The inventory account is retrieved from
settings at the moment of the transaction release.
Generates the general ledger transaction that debits the inventory account and credits the
account specified in the reason code of the receipt line (steps 4 and 5 show on the diagram).
Creates a cost layer or updates the unit cost in an existing cost layer. (You will learn more about
inventory valuation later in this course.)
Updates the last cost and average cost in the cost statistics, and updates the minimum or
maximum cost if the extreme takes place.
After the release is complete, the inventory receipt gets the Released status and become read-only.
If you have processed the wrong inventory receipt, you can make an inventory adjustment to correct
the ending inventory and the GL account balances. Inventory adjustments are described later in this
course.
After you have processed the receipt, you can print labels for the received units with the inventory ID,
date, and the receipt number by selecting Reports > Inventory Item Labels on the toolbar of the
Receipts form (IN301000), as step 6 shows. You can also print labels later by using the Inventory Item
Labels report (IN619200; Distribution > Inventory > Reports > Forms).
Figure: Inventory Receipt Processing

| Inventory Adjustment | 53

In the receipt lines on the Receipts form (IN301000), you can select reason codes of the Receipt usage.
Receipt reason codes specify the general ledger account that is credited in the transaction.
Inventory Adjustment
Inventory adjustment may decrease or increase inventory. You can make cost and quantity adjustments
as described below.
Entering an Inventory Adjustment
Releasing the Inventory Adjustment
Entering an Inventory Adjustment

You can enter an inventory adjustment manually on the Adjustments form (IN303000; Distribution
> Inventory > Work Area > Enter). In an adjustment line, you have to specify at least the following
information (step 1 on the diagram):
Quantity, if you want to adjust the on-hand quantity of the item in inventory. You can specify
positive or negative quantity in the unit of measure that you specify next.
UOM, unit of measure. By default, you can make adjustments in the base unit of measure only.
course.
Ext. Cost, if you want to adjust the cost of the item in inventory. You can specify a positive or
negative amount. If you need to adjust only the item cost without changing the quantity, leave
Quantity zero. If you need to adjust cost and quantity, you can specify Unit Cost and Quantity
and the system will calculate Ext. Cost automatically, or you can specify just Quantity and Ext.
Cost. The default Unit Cost is retrieved from the cost statistics at the moment when you select
the item in the adjustment line. The cost statistics is described further in this course.
Reason Code, if the reason code differs from the default one. Reason code specifies the
offsetting account for the general ledger transaction that should be created from the inventory
adjustment. You can leave Reason Code empty, and the system will insert the default reason
code during the release of the inventory adjustment. The default reason code is specified on the
Inventory Preferences form (IN101000) in the Adjustment Reason Code box.
When you save the inventory adjustment, the reference number is assigned to the adjustment
according to the numbering sequence that is specified in the Adjustment Numbering Sequence box
on the Inventory Preferences form (IN101000). To prepare the inventory adjustment for release, you
have to save the adjustment with the Balanced status (step 2 on the diagram).
Releasing the Inventory Adjustment

You can release individual inventory adjustments from the Adjustments form (IN303000) and release
the adjustments along with other inventory entries by mass-processing them on the Release IN
Documents form (IN501000; Distribution > Inventory > Processes > Daily) as step 3 on the diagram
shows. During the inventory adjustment release, the system takes the following actions:
Updates ending inventorythat is, updates the on-hand quantity by the specified quantity and
updates the total cost of the item in inventory by the extended cost of each adjustment line.
The adjustment applies to the ending inventory at the moment of the adjustment release and
doesn't cause recalculation of already issued costs.
| Inventory Adjustment | 54
Records the Adjustment transaction line to the inventory account, which you can view on the
Inventory Transactions by Account form (IN403000). For average cost items, the transaction is
recorded to the inventory account that is retrieved from settings at the moment of the transaction
release.
Generates the general ledger transactions according to the sign of the extended cost and the
reason code of each adjustment line (steps 4 and 5 show on the diagram).
Updates the average cost in the cost statistics.
After the release is complete, the adjustment gets the Released status and becomes read-only. If you
have processed the wrong inventory adjustment, you can make another adjustment to correct the
ending inventory and the GL account balances.
Figure: Inventory Adjustment Processing

| Inventory Issue | 55

In the adjustment lines on the Adjustments form (IN303000), you can select reason codes of the
Adjustment usage. Adjustment reason codes specify the second general ledger account that is updated
in the adjustment transaction.
Inventory Issue
Inventory issue may decrease or increase inventory and produce different general ledger transactions
depending on the transaction type of the issue line. More information is provided below.
Entering an Inventory Issue
Releasing the Inventory Issue
Updating the Ending Inventory
Entering an Inventory Issue

You can enter an inventory issue manually on the Issues form (IN302000; Distribution > Inventory >
Work Area > Enter). In an issue line, you have to specify at least the following information about the
units being issued (step 1 on the diagram):
Tran. Type, that determines how the transaction should update the ending inventory and which
general ledger transactions should be generated. Transaction types are described below.
Quantity, the issued quantity of units in the unit of measure that you specify next.
UOM, unit of measure. By default, you can issue goods in the base unit of measure only.
course.
Reason Code, which is required only for Issue and Return transaction types of the issue.
Reason code specifies the offsetting account for the general ledger transaction that should be
created from the issue line. If you leave Reason Code empty for Issue or Return line, on issue
release, the system will insert the reason code that is specified on the Inventory Preferences form
(IN101000) in the Issue/Return Reason Code box. Other transaction types of issue entries do
not use the default reason code and obtain the GL accounts based on the posting class settings of
the item if the reason code is not specified in the line.
Unit Cost displays the default unit cost from the cost statistics retrieved at the moment of the issue
line entry. This is an estimate that is not necessarily equal to the unit cost at which the units will
be removed from inventory. The actual unit cost at which the goods are removed from inventory is
determined at the moment of the inventory issue release depending on the valuation method that
applies to the item. Cost statistics is described later in this course.
When you save the inventory issue, the reference number is assigned to the issue according to the
numbering sequence that is specified in the Issue Numbering Sequence box on the Inventory
Preferences form (IN101000). To prepare the inventory issue for release, you have to save the
inventory issue with the Balanced status (step 2 on the diagram).
Releasing the Inventory Issue

You can release individual inventory issues on the Issues form (IN302000) and mass release inventory
entries on the Release IN Documents form (IN501000; Distribution > Inventory > Processes > Daily)
as step 3 of the diagram shows. During the inventory issue release, the system takes the following
actions:
Updates the ending inventory according to the transaction type of each issue line.
Records the transaction line to the inventory account according to the transaction type of the
issue line. You can view the record on the Inventory Transactions by Account form (IN403000).
Transaction that decreases inventory: The transaction is recorded to the inventory account of an
existing cost layer.
Transaction that increases inventory: The transaction is recorded to the inventory account that is
retrieved from settings at the moment of the transaction release.
Generates the general ledger transactions according to the transaction type of each issue line.
Updates the average cost in the cost statistics.
After the release is complete, the inventory issue gets the Released status and becomes read-only. If
you have processed the wrong inventory issue, you can make an inventory adjustment to correct the
ending inventory and the GL account balances.
Figure: Inventory Issue Processing

Updating the Ending Inventory

Issue lines with different transaction types update the ending inventory in the following ways:
Issue. Issue of goods from inventory. Decreases the on-hand quantity by the quantity specified in
the issue line and decreases the total cost of the item in inventory by the amount specified in the
Ext. Cost box. You can use this type for manually entered issues on the Issues form (IN302000).
This type of transactions is also generated from the Purchase Orders module when you process a
purchase return, and from the Sales Orders module during the sales return process "return with
replacement (RR)".
Return. Return of goods to inventory. Increases the on-hand quantity by the quantity specified
in the issue line and increases the total cost of the item in inventory by the amount specified in
the Ext. Cost box. For a return, you have to specify the unit cost at which the items are returned
to inventory. You can use a return to revert the impact of the wrong issue manually entered on
the Issues form (IN302000). This type of transactions is generated from the Sales Orders module
during the sales return process "return with replacement (RR)".
Invoice. Corresponds to an issue of goods from inventory. This type of transactions is generated
from the Sales Orders module during the order fulfillment processes "sales order (SO)", "invoice
(IN)", and the sales return process "return merchandise authorization order (RM)".
Credit Memo. Corresponds to a return of goods to inventory. This type of transactions is

generated from the Sales Orders module during the sales return processes "return for credit
(RC)", "return merchandise authorization order (RM)", and "credit memo (CM)".
Debit Memo. Corresponds to an issue of goods from inventory. This type of transactions can be
used for integration and not intended for manual input.

In the issue lines on the Issues form (IN302000), you can select reason codes of the Issue usage.
When you release an inventory issue, the system generates general ledger transactions depending on
the transaction type of the issue line:
Issue. Credit transaction in the inventory account. The Ext. Cost of the issue line is credited to
the inventory account and debited to the account specified in the reason code. The Unit Price
and Ext. Price fields are not used in GL transactions for this type of inventory issue.
Return. Debit transaction in the inventory account. The Ext. Cost of the issue line is debited to
the inventory account and credited to the account specified in the reason code. The Unit Price
and Ext. Price fields are not used in GL transactions for this type of inventory issue.
Invoice. Credit transaction in the inventory account. The Ext. Cost of the issue line is credited to
the inventory account and debited to the COGS account. The COGS account is retrieved from the
source according to the posting class settings of the item unless a reason code is specified in the
line, which overrides the COGS account.
If the issue has been entered manually with the specified Ext. Price, along with the cost
transaction, the system generates an additional transaction to the sales account and the AR
clearing account specified on the Inventory Preferences form (IN101000). The sales transaction
credits the sales account and debits the AR clearing account. The sales account is retrieved
from the source according to the posting class settings of the item unless the reason code that
overrides the sales account is specified in the issue line. This additional sales transaction is not
generated from issues produced by the Sales Orders module because the sales transaction is
processed through the Accounts Receivable module in that case.
Credit Memo. Debit transaction in the inventory account. The Ext. Cost of the issue line is debited
to the inventory account and credited to the COGS account. The COGS account is retrieved from
the source according to the posting class settings of the item unless a reason code is specified in
the line, which overrides the COGS account.
transaction, the system generates an additional sales transaction that debits the sales account
and credits the AR clearing account. The sales account for the transaction is retrieved by the same
rules as described for Invoice.
Debit Memo. Credit transaction in the inventory account. The Ext. Cost of the issue line is
credited to the inventory account and debited to the COGS account. The COGS account is
retrieved from the source according to the posting class settings of the item unless a reason code
is specified in the line, which overrides the COGS account.
transaction, the system generates an additional sales transaction that credits the sales account
and debits the AR clearing account. The sales account for the transaction is retrieved by the same
rules as described for Invoice.
| Step 3.1: Processing an Inventory Receipt | 59
Step 3.1: Processing an Inventory Receipt

In May, 2014, the company purchased the first goods on credit and received them to inventory. In this
step, you will create and process the following inventory receipts:
1. The first laptops and supplementary devices received to inventory on 5/1/2014.
2. More laptops received to inventory on 5/10/2014.
The detail instructions are provided below.
1. Receive the First Goods to Inventory

Create and process the inventory receipt of the first goods as described below. Analyze how the system
updates the on-hand quantity of items in inventory, and how the system generates the batch of general
ledger transactions.
1. Create the inventory receipt in the system:
a. Open the Receipts form (IN301000; Distribution > Inventory > Work Area > Enter) and
create an inventory receipt with the following information:
Date: 5/1/2014
Post Period: 05-2014
Description: First goods received
b. On the Transaction Details tab, add a new line and specify three laptops received at the
cost of $900 per unit (which is the price paid for the laptops by the company's owner):
Quantity: 3.00
UOM: PC
Unit Cost: 900.00
Press Ctrl + Enter to confirm the line. In a receipt line, you have to specify Inventory
ID, Quantity, UOM (unit of measure), and Unit Cost or Ext. Cost (extended cost)
of the received units. After you have specified the unit cost, the system calculates the
extended cost as the unit cost multiplied by quantity. Thus, 3 * $900 = $2700 is the
extended cost of the laptops in the receipt line.
You are receiving goods purchased on credit, and you have specified the INRECEIPT
reason code to accrue the payable amount to the 215000 - Inventory Accrual account.
In this example, you are processing only receipt transactions to the inventory, and you
don't have to process the corresponding bill. You could process the bill in the Accounts
Payable module and manually match the accrued amount with an actual amount to be paid.
In this part of the course, you study inventory transactions and you skip the processing of
bills. Later in this course, you will set up the purchase order processing that automates the
processing of purchases expenses through the Accounts Payable module.
c. Click Save to save the inventory receipt to the database.

The reference number 000001 has been automatically assigned to the receipt according
to the numbering sequence that is specified by default in the Receipt/Transfer
Numbering Sequence box on the Inventory Preferences form (IN101000).
d. Upload the rest of the receipt lines from the provided Excel file to speed up data entry.
a.
On the Transaction Details tab, click Load Records from File on the table
toolbar.
b. Select the InventoryReceipt_1_05012014.xlsx file provided for the course.
c. On the Common Settings step of the upload wizard, leave all parameters as is by
default and click OK.
d. On the Columns step of the upload wizard, leave the column mapping as
suggested by default and click OK.
e. After the upload is complete, make sure you have the list of receipt lines as shown
on the screenshot below.
Figure: The receipt of the first goods
e. Prepare the inventory receipt for release. Set Control Qty to 37.00 and Control Cost to
8320.00 for the receipt and clear the Hold check box.
Total Qty is the total quantity of the receipt lines, which is equal to the total in the
Quantity column in the table on the Transaction Details tab. Users are supposed to
review the total quantity and confirm the number in the Control Qty box, which might be
helpful during the manual data input. Total Cost is equal to the total amount in the Ext.
Cost column of the receipt lines. Users are also supposed to review the total cost of the
receipt and confirm the amount in the Control Cost box.
You can disable the control boxes on data entry forms of the Inventory module by clearing
the Validate Document Totals on Entry check box on the Inventory Preferences form
(IN101000). You don't have to clear the check box in this course.
2. Click Save to save the ready receipt to the database.
3. Release the inventory receipt and review the batch of the general ledger transactions as
described below.
a. On the Receipts form (IN301000), click Release to release the inventory receipt.
After the operation is complete, the receipt gets the Released status. As the result of
the inventory transaction release the system updates the on-hand quantity and the cost
of inventory. Also, the system has generated the batch of general ledger transactions
because the Update GL check box is selected on the Inventory Preferences form
(IN101000). Otherwise, the system wouldn't have generated the GL transactions.
b. On the Financial Details tab, click the number of the generated journal transaction
batch in the Batch Nbr box.
For each line of the inventory receipt, the system has generated the general ledger
transaction that corresponds to the reason code of the line. When you release an
inventory receipt, the inventory account is debited, and the account that is specified in
the reason code is credited in the transaction.
The 130000 - Merchandise Inventory inventory account has been taken from the posting
class. The same account is used for all items in the receipt. The INRECEIPT reason code
specifies the 215000 - Inventory Accrual account to be credited in the transaction.
In the batch of journal transactions, the 130000 - Merchandise Inventory account has
been debited for the amount of each individual line of the receipt, while the 215000 -
Inventory Accrual account has been credited for the total amount of the receipt lines.
The system has generated detail entries to the 130000 - Merchandise Inventory account
because the Post Option is set to Detail for the account on the Chart of Accounts form
(GL202500). Detail setting forbids summary posting to the account. The summary
entry has been generated to the 215000 - Inventory Accrual account because the Post
Summary on Updating GL option is set on the Inventory Preferences form (IN101000)
and the summary posting is allowed for the account in the Post Option setting on the
Chart of Accounts form (GL202500).
Figure: The batch generated on release of the inventory receipt
4. Review the inventory items on hand. Open the Inventory Valuation report (IN615500;
Distribution > Inventory > Reports > Balances) and run the report with the following
parameters:
Report Format: Summary
The Inventory Valuation report (IN615500) shows the on-hand quantity and the total cost of
inventory items on hand, which are updated by every released inventory transaction.
On release of the inventory receipt, three LAPTOP12 units have been added to inventory and
now the on-hand quantity of the item is equal to 3, which is displayed in the Qty. On Hand
column of the report. The total cost of the laptops on hand is shown in the Total Cost column of
the report and equals $2700. For the LAPTOP12 item, the ending inventory has been updated as
shown in the table below.
LAPTOP12 N of Units Total Cost
Beginning Inventory 0 $0
The first purchase 5/1/2014 3 $2700
Ending Inventory 3 $2700
Figure: The ending inventory quantity and cost updated on release of the inventory receipt
Now process one more inventory receipt.
2. Receive More Goods to Inventory

On 5/10/2014, you have received more laptops to inventory. Process the inventory receipt and review
the cost of ending inventory as described below:
1. On the Receipts form (IN301000), create an inventory receipt with the following information:
Date: 5/10/2014
Description: More goods arrived
2. On the Transaction Details tab, upload the receipt lines from the provided Excel file
InventoryReceipt_2_05102014.xlsx.
Make sure that you have uploaded the receipt lines as shown in the table below.
Inventory ID Quantity UOM Unit Reason Code

Cost
LAPTOP12 2 PC 950.00 INRECEIPT
LAPTOP14 1 PC 1200.00 INRECEIPT
3. Specify the control values and release the inventory receipt:
Control Qty: 3.00
Control Cost: 3100.00
Hold: Cleared
4. On the Financial Details tab, find the batch number and make sure the batch of general ledger
transactions has been released and posted.
5. Review the inventory items on hand. Open the Inventory Valuation report (IN615500;
parameters:

For the LAPTOP12 item, the on-hand quantity and the total cost have been updated in inventory
as shown in the table below.
The second purchase 5/10/2014 2 $1900
Figure: The total cost of the LAPTOP12 item on hand in inventory
Related Links
Inventory Transactions
Receipts (IN301000)
Release IN Documents (IN501000)
Inventory Valuation (IN615500)
| Step 3.2: Processing an Inventory Adjustment | 64
Step 3.2: Processing an Inventory Adjustment

On the next day, 5/11/2014, the accountant was reviewing records and noticed that the amounts in the
second receipt had been entered incorrectly. The received quantities are correct, but the laptops have
been recorded on the books with the wrong cost. The wrong receipt and the correct receipt are shown
in the table below.
You need to make an inventory adjustment to correct the cost of inventory and the amount of accrued
purchases. Regardless of the adjustment transaction date, the adjustment applies to the ending
inventory at the moment of the adjustment release and doesn't cause recalculation of costs that could
have already been issued from inventory.
Inventory Wrong receipt 5/10/2014 Correct receipt 5/10/2014 Ext. Cost

Item Difference
Quantity Unit Cost Ext. Cost Quantity Unit Cost Ext. Cost
LAPTOP12 2 $950 $1900 2 $850 $1700 -$200
LAPTOP14 1 $1200 $1200 1 $1250 $1250 +$50
Process the inventory adjustment as described below.

1. On the Reason Codes form (CS211000), define the RECEIPTADJ reason code:
Reason Code: RECEIPTADJ
Description: Correction of the wrong inventory receipt
Usage: Adjustment
Account: 215000 - Inventory Accrual
The Adjustment usage means that the reason code can be used on the Adjustments form
(IN303000) or on the Physical Inventory Review form (IN305000). You will use this reason code
to process the GL transaction when you adjust the cost of inventory. This reason code specifies
the following general ledger transactions:
215000 - Inventory Accrual, Dr/Cr
Inventory account, Cr/Dr
2. On the Adjustments form (IN303000; Distribution > Inventory > Work Area > Enter), create an
inventory adjustment with the following information:
Date: 5/11/2014
Description: Adjustment due to wrong amounts in receipt #000002
3. On the Transaction Details tab, add the adjustment lines to correct the laptop cost in
inventory as listed in the table below.
To make a cost or quantity adjustment to inventory, you have to specify the following
information in the adjustment line: Inventory ID, Quantity (if you adjust the item's quantity),
UOM, Ext. Cost (if you adjust the item's cost in inventory), and Reason Code. You can specify
a negative quantity to subtract units from inventory, as well as a negative extended cost to
reduce the cost of inventory.
The example below demonstrates two alternative ways how you can specify adjustments. If you
need to adjust the total cost of the item in inventory without changing the quantity, you can
add one adjustment line with the cost difference in the Ext. Cost box, as it is shown for the
LAPTOP12 item. Alternatively, you can specify two linesone line to remove the wrong cost from
inventory, and another line to add the correct cost to inventory, as it is shown for LAPTOP14.
Inventory ID Quantity UOM Unit Cost Ext. Cost

LAPTOP12 0 PC 0.00 -200.00
LAPTOP14 -1 PC 1200.00 -1200.00
Inventory ID Quantity UOM Unit Cost Ext. Cost

LAPTOP14 1 PC 1250.00 1250.00
4. After you have added the adjustment lines, click Save to save the adjustment to the database.
The reference number has been assigned to the inventory adjustment according to the
numbering sequence that is specified by default in the Adjustment Numbering Sequence box
on the Inventory Preferences form (IN101000).
5. On the Transaction Details tab, set Reason Code to RECEIPTADJ in every line of the
adjustment. Make sure the adjustment lines look like it is shown on the screenshot below.
You have specified the RECEIPTADJ reason code to write off the cost difference to the 215000 -
Inventory Accrual liability account.
Figure: The cost adjustment to inventory
You select the RECEIPTADJ reason code manually in this instruction. If you leave the reason code
blank, on release of the inventory adjustment the system will insert the default reason code from
the Adjustment Reason Code box on the Inventory Preferences form (IN101000), which is
INADJ.
6. Prepare the inventory adjustment for release. Set Control Cost to -150.00, clear the Hold
check box and click Save.
Now you can release the inventory adjustment.
7. Click Release to release the inventory adjustment.
The total costs of the LAPTOP12 item and the LAPTOP14 item have been adjusted in inventory.
Also, the system has generated the batch of general ledger transactions because the Update GL
check box is selected on the Inventory Preferences form (IN101000).
8. On the Financial Details tab, click the number of the generated batch in the Batch Number
box.
The system has generated the batch according to sign of the extended cost and the reason code
of each adjustment line. The positive extended cost is debited to the inventory account, the
negative extended cost is credited to the inventory account. The system takes the 130000 -
Merchandise Inventory inventory account from the posting class. The offsetting entry is posted
to the account that is specified in the reason code, 215000 - Inventory Accrual.
For the LAPTOP12 item, the system has credited the 130000 - Merchandise Inventory account by
$200, which was negative in the inventory adjustment line. For the LAPTOP14 item, the system
has credited the inventory account by $1200 and debited the account by $1250, which was
positive in the inventory adjustment line. Therefore, the inventory account has been credited by
$150 in total (-$200-$1200+$1250=-$150). The offsetting debit entry of $150 has been posted
to the 215000 - Inventory Accrual account.
The batch of journal transactions is shown on the screenshot below.
Figure: The batch generated on release of the inventory adjustment
9. Review the cost of inventory. Open the Inventory Valuation report (IN615500; Distribution >
Inventory > Reports > Balances) and run the report with the following parameters:
The cost of inventory has been decreased for the LAPTOP12 item by $200 ($4600 - $200 =
$4400), and increased for the LAPTOP14 items by $50 ($3400 - $1200 + $1250 = $3450).
The quantity of items in inventory remains the same. Thus, the cost of the LAPTOP12 has been
updated in inventory as shown in the table below.
The inventory transactions update the ending inventory in the order as they are released in the
system regardless of the transaction date. Cost adjustment updates the ending inventory and
doesn't cause recalculation of the costs that could have already been issued from inventory.

The cost adjustment 5/11/2014 0 -$200
Figure: The total cost of the LAPTOP12 and LAPTOP14 items in inventory
Related Links
Inventory Adjustments (IN303000)

| Step 3.3: Processing an Inventory Issue | 68
Step 3.3: Processing an Inventory Issue

In this step, you will process an inventory issue for the following reasons:
1. To remove a broken laptop. Process the issue with the Issue transaction type that removes the
unit from inventory and decreases the cost of the item on hand. The issue will generate the
credit transaction to the inventory account and the debit transaction to the account specified by
the reason code.
2. To remove a laptop sold to a customer. Process the issue with the Invoice transaction type
that removes the unit from inventory and decreases the cost of the item on hand. The issue
will generate the credit transaction to the inventory account and the debit transaction to the
COGS account. This example demonstrates the processing of inventory issues similar to ones
generated from the Sales Orders module.
In addition to that, you will specify the sales price in the issue line, and along with the cost
transaction, the transaction to the sales account will be generated on release of the issue.
This additional transaction can be produced only from inventory issues entered directly on the
Issues form (IN302000) and not generated from other modules. This example demonstrates
the processing of inventory issues that can be imported into Acumatica ERP from a third-party
system that is used for sales order processing.
The detail instructions are given below.
1. Remove the Broken Laptop

On 5/11/2014, you were arranging goods at the storage, and had occasionally broken one of laptops.
Remove the laptop from inventory as described below:
1. On the Issues form (IN302000; Distribution > Inventory > Work Area > Enter), create an
inventory issue with the following information:
Date: 5/11/2014
Description: Laptop 12" broken during the arrangement of goods
2. On the Transaction Details tab, add a new line with the Issue transaction type and select the
laptop in it to remove the unit from inventory:
a. Click Add Item on the toolbar to select the needed item.

The Inventory Lookup dialog appears. With this dialog, you can quickly add stock items
to documents. The dialog is available on the inventory transaction entry forms in the
Inventory module, on the Sales Orders form (SO301000) in the Sales Orders module, and
on the Purchase Orders form (PO301000) in the Purchase Orders module.
b. Select the row with the LAPTOP12 inventory item as the screenshot below shows.
As soon as you select an item, the system suggests one unit in the Qty. Selected
column, you can change the quantity, if needed. You can add multiple items at once by
selecting them in the Inventory Lookup dialog.
Figure: Adding the LAPTOP12 item to the inventory issue from the Inventory Lookup dialog
c. Make sure Qty. Selected is 1.00 and click Add & Close to add the item to the inventory
issue and close the dialog.
The item has been added to the inventory issue as the screenshot below shows.
Figure: The LAPTOP12 item added to the inventory issue
3. Click Save to save the inventory issue to the database.

The reference number 000001 has been automatically assigned to the issue according to the
numbering sequence that is specified by default in the Issue Numbering Sequence box on the
Inventory Preferences form (IN101000).
4. On the Transaction Details tab, for the LAPTOP12 item set Reason Code to INLOSS.
To issue a unit from inventory, you have to specify the following information in the line of the
inventory issue: Tran. Type, Inventory ID, Quantity, UOM, and Reason Code.
The Issue transaction type, which you have set in the Tran. Type box, specifies: 1) creating the
inventory transaction to subtract the issued quantity from inventory and decrease the cost of
inventory for the extended cost of the line and 2) generating the general ledger transaction to
credit the inventory account for the extended cost. The Unit Price and Ext. Price fields are not
used for inventory issues of the Issue type.
During the data entry, the unit cost displayed in the Unit Cost column is an estimate. The Ext.
Cost of the line is also an estimate that equals the Unit Cost multiplied by Quantity.
Unit Cost shows the default unit cost that is retrieved from the cost statistics at the moment
of selecting the inventory item in the issue line. In your configuration, the default unit cost is
average from the item's cost statistics. The average unit cost from the item's cost statistics is
displayed on the Stock Items form (IN202500) on the Price/Cost Info tab in the Average
Cost box. Currently, the average cost is $880, which has been recalculated as $4400 / 5 units =
$880/unit on release of the last inventory transaction. Cost statistics is described further in this
course.
However, $880 is not necessarily the unit cost at which the units will be removed from inventory.
The system retrieves the actual unit cost and calculates the extended cost at which the units are
removed from inventory during the inventory issue release.
You have specified the INLOSS reason code to write off the loss difference to the 520000 -
Inventory Adjustments expense account.
5. Prepare the inventory issue for release. Set Control Qty to 1.00, clear the Hold check box and
save the inventory issue.
Now the issue is ready for release, as the screenshot below shows.
Figure: The inventory issue ready for release
6. On the Issues form (IN302000), release the inventory issue by clicking Release on the form
toolbar.
The inventory issue of the Issue type has decreased the on-hand quantity of the LAPTOP12 item
by one unit and decreased the total cost of inventory by $880.
The item has been issued at the unit cost according to the valuation method that applies to
the item. The LAPTOP12 item is valuated under the average costing method. At the moment of
release the unit cost was $4400 / 5 units = $880/unit. During the inventory issue release, the
system has retrieved the unit cost of the item and issued the unit from inventory at the cost of
$880/unit.
The system has also generated the batch of general ledger transactions because the Update GL
check box is selected on the Inventory Preferences form (IN101000).
7. On the Financial Details tab, click the number of the generated batch in the Batch Number
box.
The system has generated the batch according to the transaction type and the reason code
specified in the issue line. The system has credited the 130000 - Merchandise Inventory
inventory account that has been earlier debited by the receipts of the item. The offsetting entry
is posted to the account that is specified in the reason code, 520000 - Inventory Adjustments.
The batch of journal transactions is shown on the screenshot below.
Figure: The batch generated on release of the inventory issue of Issue type
8. Review the cost of ending inventory. Open the Inventory Valuation report (IN615500;
parameters:
In the report, you can see that the total cost of the LAPTOP12 item has been decreased by $880
and now equals $3520 ($4400 - $880 = $3520). The on-hand quantity has been decreased by
one unit and now equals 4 units. The on-hand quantity and the total cost have been updated in
inventory as shown in the table below.
The first issue 5/11/2014 1 $880

Figure: The total cost of the LAPTOP12 item in inventory
2. Remove the Laptop Sold

On 5/12/2014, you sell a laptop to a customer on credit, and you want to update the ending inventory
with the issued good and record the sales revenue in the system. You haven't configured the sales
order processing in the system yet, however, you can process an inventory issue of the Invoice
transaction type to record two transactions, COGS and sales. In the sales transaction, the receivable
amount will be posted to the AR clearing account. Then, you could manually process the invoice in the
Accounts Receivable module to move the amount from the AR clearing account to the AR account of the
customer. However, you will skip processing the invoice in this example. Later in this course, you will set
up the sales order processing that automates the processing of sales transactions through the Accounts
Receivable module.
1. On the Issues form (IN302000; Distribution > Inventory > Work Area > Enter), create an
inventory issue with the following information:
Date: 5/12/2014
Description: Laptop 12" sold on credit
2. On the Transaction Details tab, add a new line and select the laptop to remove the unit from
inventory and record the sales revenue, as the screenshot below shows. Let's say, you are
selling the laptop at the price of $1000/unit:
Tran. Type: Invoice
Quantity: 1.00
UOM: PC
Unit Price: 1000.00
The Invoice transaction type specifies the credit transaction to the inventory account and the
debit transaction to the COGS account. Additional sales transaction is created only from a
manually entered issue if the extended price is specified in the line.
To make the system produce the sales transaction, you have to specify Unit Price or Ext. Price
in the issue line. You can specify the Unit Price, and the system will calculate the Ext. Price as
the unit price multiplied by the quantity.
3. Prepare the issue for release and save the issue:
Control Qty: 1.00
Control Amount: 1000.00 (extended price total)
Hold: Cleared
Figure: Inventory issue of the Invoice transaction type with information for the sales transaction
4. Release the issue.

The inventory issue of the Invoice type has decreased the on-hand quantity of the LAPTOP12
item by one unit and decreased the total cost of the inventory item on hand by $880. The unit
cost of $880 is an average cost of the item, which has been retrieved at the moment of the issue
release ( $3520 / 4 = $880).
5. On the Financial Details tab, find the batch number and open the batch of general ledger
transactions for review.
The batch contains two transactions that have been generated according to the transaction type
of the issue line. The $880 extended cost of the issue line has been credited to the inventory
account and debited to the 530000 - Cost of Goods Sold account. The $1000 extended price of
the issue line has been credited to the 431000 - Sales - Laptops account and debited to the AR
clearing account.
Again, the inventory account is one that has been previously debited by the receipts. The COGS
account and sales account have been taken from the posting class of the LAPTOP12 item which
is defined on the Posting Classes form (IN206000). The AR clearing account is one that is
specified on the Inventory Preferences form (IN101000).
Figure: The batch generated on release of the inventory issue of Invoice type with an additional sales
transaction
6. Review the cost of inventory on hand. Open the Inventory Valuation report (IN615500;
parameters:
In the report, you can see that the total cost of the LAPTOP12 item has been decreased by $880
and now equals $2640 ($3520 - $880 = $2640). The on-hand quantity has been decreased by
one unit and now equals 3 units. The on-hand quantity and the total cost have been updated in
inventory as shown in the table below.
The second issue 5/12/2014 1 $880
Related Links
Issues (IN302000)
Inventory Transfers
You can transfer goods between locations within a warehouse, or between warehouses. For more
information about inventory transfers, see Inventory Transactions in the Acumatica ERP User Guide.
Lot and Serial Tracking
You can track the lot numbers and serial numbers of units in inventory. See Lot and Serial Number
Tracking in the Acumatica ERP User Guide for details.
Lesson Summary
In this lesson, you have learned how to receive goods to inventory, issue goods, and make cost
adjustments to inventory.
To quickly select items in inventory entries, you can use the Inventory Lookup dialog, which is
available on every data entry form in the Inventory module. To open the dialog, click Add Item on the
Transaction Details tab on the form.
You have to release an inventory entry with a stock item to make the system generate the inventory
transaction and update the inventory on hand. Inventory transactions update the inventory in the order
as the inventory entries are released regardless of the transaction date. The unit cost at which the
system issues a unit from inventory is determined at the moment of the inventory issue release and
depends on the valuation method that applies to the item. Inventory adjustments apply to the ending
inventory and doesn't cause recalculation of already issued costs.
To review the cost of inventory on hand, you should use the Inventory Valuation report (IN615500).
The report shows the ending inventory of items in the systemthat is, the quantity and the total cost of
items on hand. In the report, the costs are grouped by general ledger account to which the costs should
have been posted.
| Lesson 4: The Cost of Inventory | 77
Lesson 4: The Cost of Inventory

In this lesson, you will learn which methods you can use for inventory valuation and how you can
review the cost of inventory and the statistical cost information in the system.
Lesson Objectives
Review the cost of inventory on hand by using the Inventory Valuation summary report
(IN615500)
Review the cost flow of inventory items by using the Inventory Valuation detail report (IN615500)
Review the statistical information about the item's unit cost on the Stock Items form (IN202500)
| Inventory Valuation | 78
Inventory Valuation
The cost flow in and out of inventory is tracked only for stock items, so valuation methods apply to
stock items only. The cost is moved from inventory under the valuation method that is specified for a
stock item on the Stock Items form (IN202500). You can use the following methods in the system:
Average costing (the moving average that is updated on every receipt)
FIFO
Specific identification
Standard costing
The cost of inventory is tracked in the base currency only and displayed in the base currency in the
Inventory Valuation report (IN615500).
You can use the Inventory Valuation summary report (IN615500) to view the cost of items on hand. In
the Inventory Valuation detail report (IN615500), you can see the cost flow of a particular item.
Inventory valuation is based on items' cost layers. Cost layer is a record of a particular quantity of
the item units that have the same unit cost. Inventory transactions that you see on the Inventory
Transactions by Account form (IN403000) are recorded only for stock items for which the system
maintains cost layers. Cost layer contains the information about the inventory account on which it was
created, and when you issue units, the transaction is processed to the inventory account to which the
units have been earlier received. When you issue the last units from a cost layer, their cost is issued in
full and the cost layer is removed.
The next sections compare the ways the system handles the unit costs and cost layers in case of
average costing, FIFO, and other methods. The use of all but average costing method is outside of the
Average Cost Item
FIFO Item
Specific Identification Item
Standard Cost Item
Changing the Valuation Method for an Item
Inventory items are the smallest cost elements in the configuration that you use in this course, and the
Inventory Valuation reports (IN615500) present the costs by inventory items. However, you can configure a
more complex cost structure and split the costs by subitems. The use of subitems is outside of the scope of
this course, see Additional Information for further reference.
Average Cost Item

By that moment, you have processed inventory transactions with the LAPTOP12 item that are listed
in the table below. Average unit cost is warehouse-specific. The average unit cost is equal to the total
cost of the item in warehouse divided by the on-hand quantity. Inventory receipt increases the on-hand
quantity and the total cost of the item in inventory by the quantity and the extended cost specified in
the receipt. Inventory issue removes the item at the average unit cost that is retrieved from the system
at the moment of the inventory issue release. Inventory adjustment applies to the total cost and on-
hand quantity of the item in warehouse.
Average Cost Item Inventory On Hand
Inventory Transaction Quantity Total Cost Unit Cost

(Running Total) (Running Total)
Receipt #1, 3 units @$900/u 3 $2700.00 $900.00
Receipt #2, 2 units @$950/u 5 $4600.00 $920.00
Cost adjustment, -$200 total 5 $4400.00 $880.00
Issue, 1 unit 4 $3520.00 $880.00

Average Cost Item Inventory On Hand
Inventory Transaction Quantity Total Cost Unit Cost

(Running Total) (Running Total)
Issue, 1 unit 3 $2640.00 $880.00
Cost layer is created upon the first receipt to a warehouse; cost layers are specific per warehouse and
inventory account. The total cost is updated in the layer on every next receipt to that warehouse and
account. Adjustments apply to the cost layer of the inventory account that is retrieved from settings at
the moment of the inventory adjustment release. Issues apply to an existing cost layer.
FIFO Item
The table below shows how the same inventory transactions would have been processed for a FIFO
item. The unit cost is defined at the cost layer level. Every receipt creates a new cost layer in a
warehouse; cost layers are warehouse-specific. Adjustments apply to the specified cost layer, and
issues remove units from the oldest layer.
Under FIFO, the first received items are issued first, therefore the first unit would have been issued
from the cost layer of receipt #1 at the cost of $900/unit. To make an adjustment, you would have to
specify the cost layer identifier in the adjustment line, which is the receipt number in case of FIFO item.
If you have a number of lines with the same FIFO item in a receipt, the system creates one cost layer
per receipt with an average unit cost of the lines.
FIFO Item Inventory On Hand Affected Cost Layer
Inventory Quantity Total Cost Layer # Layer Qty Layer Cost Unit Cost
Transaction (Running (Running
Total) Total)
Receipt #1, 3 units 3 $2700.00 Receipt #1 3 $2700.00 $900

@$900/u
Receipt #2, 2 units 5 $4600.00 Receipt #2 2 $1900.00 $950

@$950/u
Cost adjustment, 5 $4400.00 Receipt #2 2 $1700.00 $850

-$200 total from
receipt #2
Issue, 1 unit 4 $3500.00 Receipt #1 2 $1800.00 $900
Issue, 1 unit 3 $2600.00 Receipt #1 1 $900 $900
Specific Identification Item

Under the specific identification method, the unit cost is defined at the cost layer level, which is
warehouse-specific. A cost layer is created for every unique lot number or serial number of the item in
a warehouse. Adjustments and issues apply to the specified cost layer. If you have a number of lines
with the same lot number in a receipt, the system creates one cost layer with an average unit cost of
the receipt lines.
Standard Cost Item

Standard unit cost is warehouse-specific. The standard unit cost is specified for an item and can
be changed for a particular warehouse, so that the standard cost of the item may differ between
warehouses. Inventory transactions use the constant unit cost, which can be changed by using the
standard cost update process.
Cost layer is created upon the first receipt to a warehouse; cost layers are specific per warehouse and
inventory account. The standard cost update process updates the unit cost in an existing cost layer.
Issues apply to an existing cost layer. Inventory adjustments can only be used to adjust the on-hand
quantity of a standard item in inventory. If you need to adjust the total cost of a standard item without
changing the on-hand quantity, you can do this indirectly by using the standard cost update process.
Total cost of a standard item always equals the on-hand quantity multiplied by the unit cost.

We strongly recommend that you design the inventory structure and select the appropriate valuation
methods for items before you begin using inventory items in transactions. However, you might need
to change the valuation method that applies to an item even after you have started processing
transactions with the item. For certain valuation methods, you can change the valuation method, for
example, from FIFO to average. (See Additional Information for further reference on which particular
methods you can change.)
If you want to change the valuation method for an item, at first, keeping the old valuation method
in the item settings, clear the item balance to a temporary asset clearing accountthat is, issue all
quantity and cost of the item by using a specific reason code. Then you can specify the new valuation
method for the item and process an inventory receipt back from the temporary account by using
another reason code. After that, in the next inventory transactions, the item cost will be processed
according to the new valuation method. Make sure the clearing account balance is zero and deactivate
the account.
Because a cost layer contains the information about the inventory account on which it was created,
you might need to remove the cost layers from the old inventory account if you want to change the
inventory account for an item. See Inventory Account for details.
| Step 4.1: Analyzing the Cost of Inventory | 81
Step 4.1: Analyzing the Cost of Inventory

In this step, you will perform the following actions:
1. Review the quantity and the total cost of items on hand by using the Inventory Valuation
summary report (IN615500).
2. Analyze how inventory transactions update the cost of inventory by using the Inventory
Valuation detail report (IN615500).
1. Review the Cost of Inventory On Hand

To review the quantity and the total cost of items on hand, open the Inventory Valuation report
(IN615500; Distribution > Inventory > Reports > Balances) and run the report with the following
parameters:
The Inventory Valuation report (IN615500) shows the on-hand quantity (also called "book quantity")
and the total cost of inventory items on hand, which are calculated by released inventory transactions.
The amounts are grouped by inventory account to which the costs should have been posted in the
corresponding general ledger transactions.
In the report, the on-hand quantities are presented in the base unit of measure of each item. The
items are listed for the MAIN warehouse, which is created in the system by default if you use the
configuration with one warehouse in the system. You can use the Inventory Valuation summary report
(IN615500) to reconcile the balance of each inventory account calculated by inventory transactions with
the balance of the account calculated by general ledger transactions for the last activity period. The
reconciliation process is demonstrated later in this course.
After you have processed the second inventory issue, the report should look like it is shown in the
screenshot below.
The account total is the total displayed at the end of the item list (highlighted on the screenshot).
The total quantity and cost in the header line of the item list is the total quantity and cost for each
account-subaccount pair used in the inventory transactions (subaccounts are outside of the scope of
this course).
Figure: Inventory Valuation Summary Report (IN615500)
2. Analyze How Inventory Transactions Update the Cost of Inventory

Now review how inventory transactions have been updating the quantity and total cost of the LAPTOP12
item on hand. Run the Inventory Valuation (IN615500) report with the following parameters:
Report Format: Detail

| Step 4.1: Analyzing the Cost of Inventory | 82
For the specified item, the report lists the inventory transactions in the order as they have been
released in the system, starting from the earliest transactions. In this report, you can see how the cost
of the inventory item has been actually updated in inventory according to the valuation method that
applies to the item. For Issue transactions, the Cost column shows the actual cost at which the units
have been removed from inventory during the transaction release.
The report for LAPTOP12 item is shown on the screenshot below.
Figure: Inventory Valuation Detail Report (IN615500)
Related Links
| Step 4.2: Reviewing the Cost Statistics of an Item | 83
Step 4.2: Reviewing the Cost Statistics of an Item

If you enter transactions manually from the Receipts form (IN301000) and Adjustments form
(IN303000) or import transactions into these forms, the system suggests the default unit cost from the
cost statistics, which is retrieved at the moment of data entry. In multiple-warehouse configurations,
for each warehouse you can choose which cost is retrieved as the default unit cost, average or last;
you can specify this setting on the Warehouses form (IN204000). In one-warehouse configurations,
this setting is not available, and the system always retrieves the average cost. By the same logic,
the system selects the default unit cost that is displayed as an estimated one when you enter a
transaction on the Issues form (IN302000). The Warehouses form (IN204000) requires either the
Multiple Warehouses or Multiple Warehouse Locations feature, which you don't use and don't have to
enable in this course.
For purchasing and accounts payable documents, where the vendor-specific information may be
available, you can use different ways to define the default unit cost for data entry, which are described
later in this course.
Review the statistical information about the item's unit cost for LAPTOP12:
1. On the Stock Items form (IN202500), select the LAPTOP12 item.
2. Select the Price/Cost Info tab and review the item's global cost statistics displayed in the Cost
Statistics section as the screenshot below shows.
Last Cost is the unit cost from the latest inventory receipt among all receipts that have been
processed to warehouses (in your configuration, to the only warehouse). If there is a number of
lines with the same item in the receiptthe last cost is averaged by the receipt lines.
Min. Cost and Max. Cost are the corresponding minimum and maximum unit costs among all
inventory receipts that have been processed to warehouses.
Average Cost here is calculated as the total cost of the item by all warehouses divided by the
total on-hand quantity. Average Cost is recalculated on release of every inventory transaction.
Figure: Item's cost statistics
In multiple-warehouse configurations, along with the global item's cost statistics, the system tracks
the cost statistics for each item-warehouse combination, which is displayed on the Price/Cost
Information tab of the Item Warehouse Details form (IN204500). If there is a statistical cost for a
| Step 4.2: Reviewing the Cost Statistics of an Item | 84
certain warehouse, the system retrieves that warehouse-specific cost as the default one on the data
entry forms of the Inventory module. Otherwise, the system retrieves the default unit cost from
the item's global cost statistics. The Item Warehouse Details form (IN204500) requires either the
Multiple Warehouses or Multiple Warehouse Locations feature, which you don't use and don't have
to enable in this course.
You may notice that you can edit Last Cost in the cost statistics. This is to allow you to import the
catalog of stock items with their last cost so that you can further use this cost to import the initial
inventory by processing an inventory receipt. Data migration is outside of the scope of this course.
Related Links
Standard Costing Method
You can use the standard costing method for inventory items. See Item Costs and Valuation Methods in
the Acumatica ERP User Guide for details.
FIFO Costing Method
You can use the FIFO costing method for inventory items. See Item Costs and Valuation Methods in the
Acumatica ERP User Guide for details.
Specific Identification Method
You can use the specific identification method to value inventory items to which the lot or serial
numbers are assigned. For more information, see Item Costs and Valuation Methods in the Acumatica
ERP User Guide for details.
For certain valuation methods, you can change the valuation method that applies to an item. See Item
Costs and Valuation Methods and Inventory IDs and Subitem Codes in the Acumatica ERP User Guide
for details.
Inventory Subitems
You can split item costs by subitems to prepare more detail inventory valuation reports. See Item Costs
and Valuation Methods and Inventory IDs and Subitem Codes in the Acumatica ERP User Guide for
details.
Lesson Summary
In this lesson, you have learned about the cost of inventory in the system and which methods you can
use for inventory valuation.
Stock items, which are tracked in inventory, can be valuated under average, FIFO, standard, and
specific identification valuation methods. The valuation method that is applied to an item is specified for
each item individually on the Stock Items form (IN202500). To view the cost of inventory on hand, you
can use the summary Inventory Valuation report (IN615500).
On the Price/Cost Info tab of the Stock Items form (IN202500), you can view the item's cost
statistics, which is updated on release of every inventory transaction. From this information, the system
suggests the default unit costs on the data entry forms of the Inventory module.
| Lesson 5: Item Availability | 87
Lesson 5: Item Availability

In this lesson, you will learn to review item availability in inventory. You will learn how the system
updates the on-hand quantity and calculates the available and available for shipping quantities of
inventory items.
Lesson Objectives
Configure the availability calculation settings that apply to inventory items
Analyze the available quantity that is displayed on data entry forms
Review the item quantities by using the Inventory Summary form (IN401000)
Review the inventory transactions and documents by using the Inventory Allocation Details form
(IN402000)
Modify the availability calculation settings and recalculate the item quantities by running the
process on the Validate Inventory form (IN505000)
| On-Hand and Available Inventory | 88
On-Hand and Available Inventory

When you are selecting a stock item in a transaction or entry, you can see the on-hand, available, and
available for shipping quantities of the item in inventory.
The system maintains these quantities according to the following rules:
On Hand quantity: This is the on-hand, or book quantity of items in inventory. This quantity is
not calculated, it is stored in the database and updated with every released inventory transaction.
Available for Shipping quantity: This is an estimated quantity that is calculated by fixed
formula. Available for shipping quantity can be lower than the on-hand quantity. The system
verifies the available for shipping quantity every time a new shipment is created. The available
for shipping quantity is equal to the on-hand quantity minus the quantity on issues that haven't
been released yet, minus the quantity allocated for shipping, minus the shipped quantity (see the
diagram below).
Available quantity: This is an estimated quantity for which you can configure the way it is
calculated. The available quantity may include anticipated transactions and therefore may be
lower or greater than the on-hand quantity. Anticipated transactions correspond to the documents
and transactions that have been entered in the system but not yet processed to the end. In the
availability calculation settings, you specify which anticipated transactions affect the available
quantity. Thus, the available quantity may include goods on purchase orders and exclude the
goods allocated for sales orders. You can use the available quantity as a leading indicator of
demand for automated inventory replenishment process. Or, for example, sales persons might
consider the available quantity rather than the on-hand quantity when adding items to sales
orders and overselling them to a controlled extent, which might be dictated by the company's
sales policy.
The quantities shown on the diagram below, for example, IN Issues, correspond to the allocation types
of the document and transaction lines that you can review on the Inventory Allocation Details form
(IN402000). More information is provided further in this lesson.
Figure: Item Quantity Calculation

| Step 5.1: Analyzing the Item Quantities | 89
Step 5.1: Analyzing the Item Quantities

In this step, you will learn to configure and use the available quantity of items in inventory. You
will review the available quantities that are displayed for users while they are entering inventory
transactions. The same available quantities are displayed during the document entry in the Sales Orders
and Purchase Orders modules. You will review the item quantities by using the Inventory Allocation
Details (IN402000) and Inventory Summary (IN401000) forms, and see how you can change the
availability calculation settings and recalculate the inventory quantities after that.
Perform the following actions:
1. Review the availability calculation settings that apply to the LAPTOP12 item. This item is
assigned to the STOCKITEM item class. Therefore, on the Item Classes form (IN201000), select
the STOCKITEM class and review the Availability Calculation settings.
The available quantity is the on-hand quantity of an item minus the total deductions plus
the total additions specified in the availability calculation settings. According to the settings
presented on the screenshot below, the available quantity is reduced by the quantities on
inventory issues that have been saved but not yet released in the system as well as by the
quantities on sales orders and shipments, which are described later in this course. The settings
specify zero additions at the moment.
Figure: The availability calculation settings that apply to the items assigned to the STOCKITEM class
2. On the Inventory Summary form (IN401000; Distribution > Inventory > Work Area > Explore),
select the LAPTOP12 item and make sure that the available quantity is 3 units.
3. On the Issues form (IN302000), create a new issue with the On Hold status and select a laptop
in the issue line:
Date: 5/15/2014

Description: One laptop issue
On the Transaction Details tab:
Tran. Type: Issue
Do not change the Quantity of the line, which is zero. At the bottom of the table, notice
that the available quantity of the LAPTOP12 item is 3 units.
4. Enter 1.00 as the Quantity of the LAPTOP12 line, and save but do not release the issue.
Notice that the available quantity of the LAPTOP12 item is still 3 units and not changed, as the
screenshot below shows. The Issues form (IN302000) shows the quantity in the item of the
current line that is available for issuing and can be entered in the Quantity column of this line.
Figure: The available quantity of the item with respect to the only issue line
5. Click Inventory Summary on the toolbar of the Transaction Details tab, the Inventory
Summary form (IN401000) opens for the item of the current line.
This form shows the quantity available at the warehouse. After you saved the issue, the available
quantity has been reduced by the quantity of the issue and equals 2 units.
For released documents, the available quantity that is shown at the bottom of the Issues form
(IN302000) matches the available quantity in the Inventory Summary form (IN401000).
6. Go back to the inventory issue on the Issues form (IN302000). On the Transaction Details tab,
double-click the table to add one more line with the LAPTOP12 item to the issue:
Tran. Type: Issue
Quantity: 2.00
7. Save your changes to the issue.
8. Click Inventory Summary on the toolbar of the Transaction Details tab to review the item
quantities on the Inventory Summary form (IN401000; Distribution > Inventory > Work Area >
Explore).
The available quantity, which has been retrieved from the database at the moment, is zero,
because all three units of the LAPTOP12 are currently selected on inventory issues (on one
issue). This quantity is updated in the database every time when users modify quantities on
inventory transactions and documents in the system and save the changes. From this quantity,
the system calculates the available quantity that is displayed on the data entry forms for lines of
inventory transactions and documents.
Figure: The summary of the item quantities
9. Click the LAPTOP12 link in the table to open the item on the Inventory Allocation Details form
(IN402000; Distribution > Inventory > Work Area > Explore) for review of the inventory
transactions and documents from which the available quantity is calculated.
The Inventory Allocation Details form (IN402000) displays the item quantities recalculated at
the moment of your opening the form in accordance with the most recent availability calculation
settings that apply to the selected inventory item. Along with the available quantity of the item,
the form shows other quantities counted by allocation types of the document and transaction
lines.
The table on the Inventory Allocation Details form (IN402000) shows the list of inventory
transactions and documents that haven't been processed to the end in the system and may be
deducted or added to the on-hand quantity of the item to get the available quantity.
The table shows two lines of the issue that hasn't been released in the system yet (see the
screenshot below). The total quantity of the issue lines is included in the total deduction. The
total deduction equals 3 units, which makes the available quantity zero (3 on hand - 3 total
deduction (3 on issues) = 0 available).
Figure: The inventory transactions and documents from which the available quantity is calculated
10. Go back to the inventory issue on the Issues form (IN302000). On the Transaction Details tab,
click the first line of the issue, and review the available quantity of the item.
After you save the issue, the system retrieves the quantity of the LAPTOP12 item available at the
warehouse from the database. The stored quantity is now 0 units.
If you click the first line, 1 unit is displayed as available for this line. Because the stored available
quantity has already been reduced by the line quantity, the system adds the line quantity back
to the stored quantity to present the available quantity with respect to the selected line.
If you click the second line, the available quantity will be 0 + 2 units = 2 units. The opposite
logic applies to lines that increase the stored available quantity.
Figure: The available quantity of the item with respect to the first line of the issue
11. On the Receipts form (IN301000), create a new receipt with the On Hold status as the
screenshot below shows:
Date: 5/15/2014
Description: 5 laptops received
Quantity: 5.00
Unit Cost: 1000.00
Figure: The inventory receipt of five laptops
12. Save the receipt, do not release the receipt, and open the LAPTOP12 item on the Inventory
Allocation Details form (IN402000).
To open the Inventory Allocation Details form (IN402000) for the LAPTOP12 item, you can click the
link in the table on the Transaction Details tab, and on the Stock Items form (IN202500) that
appears, select Inquiries > Allocation Details on the toolbar as the screenshot below shows.
Figure: Opening Inventory Allocation Details from the Stock Items form
According to the availability calculation settings that apply to the LAPTOP12 item, the total
addition doesn't include the quantity on the inventory receipt. Suppose that you want to count
the quantity on inventory receipts for the available quantity.
Figure: The available quantity doesn't include the quantity on inventory receipts
13. On the Item Classes form (IN201000), select the STOCKITEM item class and, on the General
Settings tab, select the Include Qty. on Receipts check box. Save the changes.
This check box adds the lines of the IN Receipts allocation type to the total addition that affects
the available quantity.
After you have modified the availability calculation settings of an item class, or changed the
availability of units in certain locations of a warehouse, you have to recalculate the inventory
quantities.
Figure: Adding the quantity on inventory receipts to the available quantity for items assigned to the
STOCKITEM class
For now, the available quantity of the LAPTOP12 item remains 0 and doesn't include the quantity
on inventory receipts yet, as you can see on the Inventory Summary form (IN401000).
14. On the Validate Inventory form (IN505000; Distribution > Inventory > Processes > Closing),
click Process All as the following screenshot shows to make the system recalculate the available
quantities of items in the database.
Figure: Recalculation of the available quantity of items in the database
15. After the process is complete, open the Inventory Summary form (IN401000) for the LAPTOP12
item.
The available quantity has been recalculated according to the updated availability calculation
settings. The available quantity now includes 5 units that are on the inventory receipt that you
have entered just before.
Figure: The available quantity of the LAPTOP12 item in the database
16. Click the LAPTOP12 item link in the table to open the Inventory Allocation Details form
(IN402000) for the item.
The total addition now includes the total quantity on inventory receipts, which is 5. The available
quantity equals the on-hand quantity minus the total deduction plus the total addition, which
equals 3 units - 3 units + 5 units = 5 units. The lines of inventory transactions from which
the total deduction and total addition quantities are calculated are listed on the form (see the
screenshot below).
Figure: The available quantity includes the quantity on inventory receipts
17. Double-click an issue line in the table to open the issue on the Issues form (IN302000).
For the first line of the issue, the available quantity that you can enter for this line is 6 units,
which is the available quantity retrieved from the database plus the line quantity, 5 units + 1
unit = 6 units.
Figure: The available quantity with respect to the first line of the issue
You have analyzed how the available quantity is calculated and presented in the system. Do not remove
or release the sample inventory issues and receipts that you have created, you will need them in further
examples.
Related Links
Availability Calculation
Inventory Summary (IN401000)
Inventory Allocation Details (IN402000)
Validate Inventory (IN505000)
| Step 5.2: Processing More Inventory Transactions | 101
Step 5.2: Processing More Inventory Transactions

In this short step, you are supposed to complete a self-guided exercise to reinforce the practice skills:
1. Create and process an inventory issue of ten KEYBOARD units with the 5/15/2014 date and
05-2014 post period. Process the issue with the Invoice transaction type to record the issued
cost to the COGS account.
2. Create and process an inventory receipt of seven KEYBOARD units with the 5/15/2014 date and
05-2014 post period. Receive the new units at the cost of $20/unit.
3. By using the inventory valuation report, verify that after you have processed the transactions,
the on-hand quantity of KEYBOARD equals 7 units to the total cost of $140.
This quantity and cost of the KEYBOARD item are used in the examples of the next lessons of
this course.
Quantity Not Available
If you use warehouse locations in the system, you can mark certain locations to exclude their quantity
from available quantity. For more information, see Using the Location Table in the Warehouses and
Warehouse Locations article in the Acumatica ERP User Guide.
Lesson Summary
In this lesson, you have learned about the item quantities in the system.
The on-hand quantity of items in inventory and the total cost is updated with every released inventory
transaction.
The system calculates the available quantity of an item based on the availability calculation settings
specified in the item class. Available quantity can include anticipated transactions and therefore
can be lower or greater than the on-hand quantity. You can use the Inventory Allocation Details
form (IN402000) to view the quantities that may affect the available quantity and view the lines of
transactions and documents not yet processed to the end in the system.
| Lesson 6: Physical Inventory | 104
Lesson 6: Physical Inventory

In this lesson, you will learn how you can use the system in physical count processes on the example of
physical inventory.
Lesson Objectives
Configure the physical inventory type for counting entire inventory
Prepare the count tags to which the unit count can be written down during the process
Prepare the count sheets to which the numbers can be transferred from the count tags
Start the counting process in the system and freeze the processing of inventory transactions
Resume the processing of inventory transactions after the counting is complete
Enter the physical quantities into the system
Process the quantity variances and generate inventory adjustments

| Physical Count Process | 105
Physical Count Process

Physical inventory is the process of counting entire inventory to verify inventory accuracy. After the
physical quantities of goods at the storage are obtained, the book quantities are compared to them and
the necessary inventory adjustments are made to equate the book quantities to physical quantities.
On every iteration of physical count, you perform the following steps as illustrated on the diagram
below. Each of these steps is further described in detail:
1. At the warehouse, organize goods to prepare for counting and complete data entry for
warehouse activities (1 and 2 on the diagram).
2. Prepare accurate book quantities in the system (3).
3. Create the count review document of the needed physical inventory type (4) on the Physical
Inventory Review form (IN305000) and pause the processing of inventory transactions in the
system (6).
The system will not release inventory transactions starting from the moment after you have
created a count review document and the document has the Counting in Progress status.
4. At the same moment, freeze warehouse activities (5).
5. At the warehouse, count the goods and register the physical quantities (7).
For example, the physical quantities can be recorded on the count sheets that you can print out
from the system, or prepared in an Excel file.
6. Resume warehouse activities (8) and resume the processing of inventory transactions in the
system (9).
After the counting is complete, the processing of inventory transactions can be resumed in the
system because the book quantities to which the physical quantities will be compared are fixed
in the count review document not affected with next processed transactions.
7. Populate the physical quantities in the count review document (10).
Users can enter physical quantities by using the Physical Inventory Count form (IN305010). The
quantities can also be entered manually or uploaded from Excel to the Physical Inventory Review
form (IN305000). You will see an example further.
8. Process the count review document to finalize the result and make the system generate the
inventory adjustment, if necessary (11).
9. Review the generated inventory adjustment and make sure the adjustment is released and the
GL transactions are posted (12).
In large inventories, where physical inventory is performed relatively rarely, you might want to do cycle
counts to maintain inventory accuracy over time. For cycle counts, you don't have to freeze warehouse
activities until the counting is complete. With basic functionality of physical counts, you can configure
only the physical inventory type to perform full inventory count. You can use the Advanced Physical
Count feature of the system to be able to process the count review for not only entire inventory, but
also for selected items. You can group items by ABC category or inventory turnover ratio and configure
the frequency of counting these groups. For more information, see the Additional Information section of
this lesson.
| Physical Count Process | 106
Figure: Physical count process

| Step 6.1: Configuring the Physical Inventory Type | 107
Step 6.1: Configuring the Physical Inventory Type

To be able to prepare the count review document, you have to configure the physical inventory type
and configure the numbering sequence for count tags if you are planning to use numerated tags in the
counting process.
Physical inventory type defines the way the system selects inventory items for counting, and the order
of count lines in the count review document. For each iteration of physical count, you have to prepare
the count review document and you can additionally print out the count sheets and count tags.
Count sheet is a printable form of the count review document. Count sheet consists of count lines.
A count line defines a distinguishable set of units to be individually counted at the warehouse and
recorded to the count sheet. In the example of this course, the units can be distinguished only by
inventory ID. Therefore, for full inventory count, the count lines correspond to unique inventory IDs,
and the count sheet will contain as many lines as there are unique inventory IDs with non-zero quantity
of units on hand. The most detail count lines that can be produced in the system are those for each
unique combination of location - inventory ID - lot/serial number of units if you use warehouse locations
and lot/serial tracking functionality. The count lines are individually numerated in every count review
document starting from line 1.
A count line corresponds to a count tag. The count tag contains the information of the count line,
including the book quantity and inventory ID of the set of units to be counted and recorded to the count
tag. The count tags can be unnumbered or assigned sequential numbers independent from count line
numbers. Count tags can be individually tracked as a part of the counting process. If you configure a
numbering sequence of count tags, the sequence applies across all count tags that you generate for any
physical counts.
Perform the following steps to define the physical inventory type and configure the numbering of count
tags:
1. Define the FULL physical inventory type.
a. On the Physical Inventory Types form (IN208900; Distribution > Inventory >
Configuration > Setup), define the following physical inventory type:
Type ID: FULL
Description: Full physical inventory
Generation Method: Full Physical Inventory
Under the Full Physical Inventory method, the system generates the count lines for
every distinguishable set of units on hand. In the example of this course, the units
are only distinguished by inventory ID, therefore the count lines will correspond to
inventory IDs as one count line per ID.
b. On the Assignment Order tab, specify the Line and Tag Number Assignment Order
settings:
1: By Inventory Description
2: -
3: (leave empty)
4: (leave empty)
These settings specify the sort order of count lines and, correspondingly, the sort order
of count tags that will be generated based on the physical inventory type. You can order
the count tags depending on how the goods are organized at the warehouse and how
you are going to distribute the count tags among the workers who will perform counting.
For example, in a large warehouse, two-person count teams can be divided by locations
that they are assigned to count. In this case, you can sort the count tags by location to
provide the count teams with count tags within certain numeric ranges that correspond
to locations. Within a location, the count tags can be additionally sorted by inventory ID
or inventory description and lot/serial number of units for convenience. In the example of
this course, you have decided to sort the count tags by inventory description. If you don't
specify any values on the Line and Tag Number Assignment Order tab, the count
lines will be generated in the order as records are retrieved from the database.
| Step 6.1: Configuring the Physical Inventory Type | 108
c. In the Blank Lines to Append box, specify 2. This is the number of extra lines that will
be printed on the count sheet to record the items that might be discovered during the
counting process.
d. Save the changes. The settings of the FULL physical inventory type should look as shown
in the screenshot below.
Figure: Physical inventory type
2. Configure the numbering sequence of count tags.

a. On the Inventory Preferences form (IN101000; Distribution > Inventory > Configuration
> Setup), specify the following settings and save the changes:
Use Tags: Selected
Last Tag Number: 1000
By selecting the Use Tags check box, you enable numeration of count tags in the
system. If the check box is cleared, the system generates unnumbered count tags. In
the Last Tag Number box, we recommend that you specify a relatively large number
that will be easily distinguishable at a glance from the book quantity that is also printed
on the tag. People can easily mix up numbers while doing the counting and working with
the count tags and count sheets. This measure helps to prevent possible confusions of
the tag number with the book quantity that is also printed on the count tag or with the
line number that is printed on the count sheet. If you start the tag numbers from, for
example, 1, it is more likely that a worker will confuse tag number 1 with book quantity 1
rather than confusing tag number 1001 with the same book quantity.
Now the physical inventory type and the numbering sequence for count tags are ready.
Related Links
Overview of Physical Inventory Options
Physical Inventory Types (IN208900)
Inventory Preferences (IN101000)
| Step 6.2: Preparing for Physical Count | 109
Step 6.2: Preparing for Physical Count

The accounting department of MyCompany is preparing to close accounts for the first half of the 2014
year. On 6/30/2014, the company conducts physical inventory to prepare the inventory accounts for
closing.
Perform the instructions below to prepare the company's inventory for physical count.
1. Organize goods at the warehouse for counting and complete data entry for warehouse activities.
Enter and release all inventory transactions that have been physically performed at the
warehouse and already affected the physical quantity.
The system produces the book quantity for physical counts as the diagram below shows. You
have to organize goods at the warehouse and complete data entry to be able to count accurate
physical quantities that match the book quantities.
Figure: Book quantity for physical count
If, by some reason, you cannot complete the following transactions, you have to exclude these
items from physical count:
1. Items that have been received to the warehouse, but the receipts cannot be released in
the system at the moment.
2. Items on unreleased inventory issues and not issued shipments, which haven't been
removed from the warehouse yet.
You have to exclude those items because they are not reflected in the book quantity that is
printed in the count review document for comparison with the physical quantity. For example,
you can place those items to a certain location in the warehouse and skip counting this location.
You have to make sure those items won't be mistakenly counted, otherwise there could be the
wrong difference between the book quantity and physical quantity in the count review document.
2. Prepare accurate book quantities in the system. Review the inventory transactions that have
been entered but not yet released in the system. (You would have to review shipments as well,
but the shipment processing is not configured in the system yet.)
On the Close Financial Periods form (IN509000; Distribution > Inventory > Processes > Closing),
select the 06-2014 period in the list (that is, the period of the most recent inventory activity)
and click Unreleased Documents to view the list of inventory transactions that have the On
Hold or Balanced status. The Unreleased IN Documents report (IN656000) shows an inventory
issue and receipt that are on hold in the system (you have created them in the previous lesson).
Suppose that you have the following information:
The goods on the inventory receipt are on the way to the warehouse but haven't reached
it yet. Leave the inventory receipt as is in the system to process later when the goods are
received. Don't remove or release this transaction for now.
The goods on the inventory issue remain at the warehouse. The transaction was canceled
and will not be performed at the warehouse. Remove the inventory issue from the system
so that the Unreleased IN Documents report (IN656000) shows only the inventory receipt
on hold.
Figure: Unreleased inventory transactions in the system

If the inventory issue was actual, you would have to exclude the corresponding goods from
physical count at the warehouse according to requirement #2 in the list above.
3. After the goods at the warehouse are ready for counting and all appropriate inventory
transactions are processed, create the count review document to be able to start the counting
process.
a. Open the Prepare Physical Count form (IN504000; Distribution > Inventory > Processes
> Physical Count).
For every iteration of physical count that is performed at the warehouse, you have to
create a count review document that is used for processing the count result. On the
Prepare Physical Count form (IN504000), you can review the count lines that will be
included in the count review document and create the document.
b. Set the business date to 6/30/2014, the date on which you create the count review
document and freeze warehouse activities.
This date is inserted as the freeze date into the count review document for information.
c. Select the following parameters on the form:
Type ID: FULL
After you select the type, the form shows you a preview of the count lines with tag
numbers that will be generated for the physical count iteration that you are going to run
(see the screenshot below). Before you start the counting process, you can review the
count lines to make sure the needed items are selected for counting and the order of
count lines is as expected. The book quantity of each count line is actual at the moment
and produced by the formula above.
The FULL physical inventory type defines the counting of entire inventory, and the list
of count lines contains a line for each set of distinguishable unitsthat is, a line per
inventory ID in your configuration. Because the count lines are ordered by inventory
description, the computer keyboard (KEYBOARD) and computer mouse (MOUSE) items
are listed before the headset (HEADSET) item. The numbers of count lines start from 1
for every iteration of physical count.
The count lines correspond to tag numbers that are numerated in the individual
sequence starting from 1001. The last tag number that you have specified in the module
preferences has been incremented by 1 to produce the first tag number, 1000 + 1 =
1001. The list also contains two blank lines according to the Blank Lines to Append
setting that you have specified in the FULL physical inventory type for adding two extra
tags that might be needed during the counting process.
Figure: Preview of count lines with tag numbers
d. After you have verified the count lines, click Generate PI to prepare the count review
document and start the counting process in the system. Since that moment, transactional
activities should be frozen at the warehouse and the processing of next inventory
transactions is paused in the system until the physical count is complete.
After you click Generate PI, the system performs the following actions:
Generates the count review document that consists of the count lines. The book
quantity of each count line is produced at the moment you clicked Generate PI.
The count review document gets the Counting in Progress status and automatically
opens on the Physical Inventory Review form (IN305000; Distribution > Inventory
> Work Area > Enter). The count review document is assigned the reference
number according to the sequence specified in the PI Numbering Sequence box
on the Inventory Preferences form (IN101000).
If you notice that a count review document is wrong, you can click Cancel PI on the
Physical Inventory Review form (IN305000), make the necessary changes, and create
the count review again.
Generates the count sheets that can be printed by using the Physical Count Sheets
report (IN620500; Distribution > Inventory > Reports > Physical Count).
Generates the count tags that can be printed by using the Physical Count Tags
report (IN621000; Distribution > Inventory > Reports > Physical Count). The
tags will be numbered if the Use Tags check box is selected on the Inventory
Preferences form (IN101000) at the moment.
Doesn't allow releasing inventory transactions for the warehouse being counted
at the moment. Under the Full Physical Inventory method, the system doesn't
release any inventory transactions for the warehouse. For other physical count
methods, the system doesn't release inventory transactions with only items that
are being counted at the warehouse at the moment. The system freezes inventory
transactions while the count review document has the Counting in Progress status.
Count review document consists of count lines that are supposed to be populated with physical
quantities.
Figure: Count review document
Count sheets, which is simply a printable form of the count review document (see the screenshot
below).
Figure: Count sheet
Count tags correspond to count lines. The printed papers are supposed to be cut into individual
tags and attached to the counted units according to the information printed on the tag.
Figure: Count tags
You can create the count review document directly on the Physical Inventory Review form (IN305000)
by clicking Add New Record (+) on the form toolbar and adding the new entry without the preview on the
Prepare Physical Count form (IN504000) first.
Now you have to count goods at the warehouse and record the physical quantities to the count review
document in the system.
Related Links
Prepare Physical Count (IN504000)
Physical Inventory Review (IN305000)
| Step 6.3: Counting and Data Entry | 114
Step 6.3: Counting and Data Entry

The counting and data entry process can be performed as follows:
1. A warehouse worker is given a numeric range of count tags.
2. The worker counts each set of units at the warehouse, writes down the physical quantity on
the corresponding tag, and attaches the tag to the counted units. Extra tags are used to count
unregistered units if any are found at the warehouse.
3. Another worker verifies tags and transfers the numbers from the count tags into the count
sheets.
Count sheets and count tags can be skipped and the information can be entered directly on the
Physical Inventory Count form (IN305010) or Physical Inventory Review form (IN305000). Or,
the count result can be prepared in an Excel file instead of count sheets.
4. After the counting is complete and the count result is recorded, warehouse activities are
resumed and the release of inventory transactions is resumed in the system.
5. The data entry person transfers the information from the count sheets into the system for
further processing of the result.
Information from the count sheets can be entered on the Physical Inventory Count form
(IN305010) or Physical Inventory Review form (IN305000). The count result can be uploaded
from an Excel file to the Physical Inventory Review form (IN305000).
The Physical Inventory Count form (IN305010) is intended for data entry by multiple users who
are simultaneously counting goods and recording the physical quantities to the system. For these
users, you can configure the access rights to only this form where they enter physical quantities.
On the Physical Inventory Count form (IN305010), you can also hide the book quantities so
that inventory workers cannot just copy the book quantities to physical quantities. During the
process, the physical quantities that users enter and save on the Physical Inventory Count
form (IN305010) can be observed on the Physical Inventory Review form (IN305000). While
the Physical Inventory Count form (IN305010) is in use, you shouldn't update any physical
quantities by using the Physical Inventory Review form (IN305000), because the concurrent
update causes an error on this form.
The Physical Inventory Review form (IN305000) is intended for controlling the physical inventory
process, for review of the entered quantities and finalizing the physical count result. Also, if
only one person enters all physical quantities into the system, this person can use the Physical
Inventory Review form (IN305000) for data entry instead of the Physical Inventory Count form
(IN305010).
MyCompany follows the simplest process. The warehouse is small, and all goods are counted by one
person. The person prepares an Excel file with physical quantities, and gives you the file to upload to
the Physical Inventory Review form (IN305000). The Physical Inventory Count form (IN305010) is not
used in this process.
Complete the instructions below to perform the part of the process that is executed in the system.
1. Suppose that you have received the file with physical quantities. Find the
Physical_Count_Result.xlsx provided for the course.
2. Because the physical count has been finished, on the Physical Inventory Review form
(IN305000), click Finish Counting to resume processing inventory transactions in the system.
The physical count review document gets the Data Entering status. Now inventory transactions
can be released in the system and the warehouse activities can be resumed.
You can resume the processing of inventory transactions now because you have obtained the
physical quantities that you have to compare with the book quantities by the count review
document. Inventory transactions that are processed after that moment will not affect the book
quantities in the count review document.
3. On the Physical Inventory Review form (IN305000), click Load Records from File on the table
toolbar of the Physical Inventory Details tab and select the provided Excel file for upload:
a. On Common Settings, leave all parameters as is by default and click OK. The uploaded
quantities are added up to the existing quantities, if any.
| Step 6.3: Counting and Data Entry | 115
b. On Columns, leave the column mapping as suggested and click OK. You have to map
Inventory ID and Physical Quantity columns to be able to upload the quantities.
During upload, the system sums up quantities from the Excel file by inventory ID. The Excel file
contains 7 rows for the KEYBOARD item, which have been summed up into one line in the count
review document with 7 units. The system groups quantities from the Excel file into the count
lines according to the parameters by which the goods are counted, which may include Inventory
ID and warehouse location, if the corresponding functionality is used in the system.
The physical quantities should be uploaded as shown on the screenshot below.
The system automatically adds new lines to the count review document if there are lines in the
Excel file with inventory IDs that were missing in the original count review document.
If you populate physical quantities manually and run out of extra lines in the count review
document, you can always add more lines to the table by using the Add button on the table toolbar.
The tag numbers are automatically assigned to the new lines.
If you want to reupload quantities from Excel, you have to clear up the physical quantities to zero,
save the count review document, and then upload the Excel file again. (You can export the existing
lines from the Physical Inventory Review form (IN305000) to Excel, change the sign of the exported
physical quantities to negative, and upload the quantities back to the form to reverse the line
quantities to zero.)
4. You have entered all count lines that should be processed. Click Set Not Entered to Skipped
on the table toolbar to exclude the blank lines from processing and click Save.
You have to enter or skip each count line in the count review document to be able to process the
document. Count review document cannot be processed until there are count lines with the Not
Entered status.
To speed up data entry, you can at first enter or upload all non-zero physical quantities, then click
Set Not Entered to Zero to set zero quantities in the count lines for items that haven't been found
at the warehouse, then click Set Not Entered to Skipped to make the blank tags skipped. After
that, you have the count review document ready for processing.
Make sure your count review document looks as the screenshot below shows. You have uploaded
all quantities and the count review document is now ready for processing. The Variance
Quantity column shows the difference between the book quantity and the physical quantity in
the count lines. There is only one difference for the LEATHCASE item where the book quantity
mismatches the physical count.
Figure: The count review document ready for processing
Now you have to process the result of physical count.

Related Links
| Step 6.4: Processing the Count Result | 116
Step 6.4: Processing the Count Result

After you complete the data entry, you have to review and process the count review document to adjust
the quantity and cost of inventory if necessary. Perform the following instructions:
1. On the Physical Inventory Review form (IN305000), review the variance quantity and the
extended variance cost in the count line for the leather case item.
According to the count result, one unit of LEATHCASE should be written off inventory to make
the book quantities equal the physical quantities of goods at the warehouse. The unit cost that is
displayed in the Unit Cost column will be used in the inventory adjustment generated from the
count review. This is the default unit cost (average) from the item's cost statistics retrieved at
the moment of the count review document creation. You can click Update Actual Cost on the
table toolbar to refresh the unit costs in the document.
The default reason code for all count lines is taken from the Phys. Inventory Reason Code
that is specified on the Inventory Preferences form (IN101000).
The default reason code for inventory adjustments generated from physical count review
documents can be overridden in the posting classes to which the inventory items are assigned. (You
don't have to do this in this course).
2. Make sure the business date is 6/30/2014 and click Complete PI to generate the inventory
adjustment for the missing unit.
With the transaction date taken from the business date (6/30/2014) and the post period set
to the financial period to which the transaction date belongs (06-2014), the system creates
the inventory adjustment from the count review document and releases the transaction. The
financial period to which the adjustment is processed must be active in the system and the
posting of GL transactions must be allowed for this period.
3. After the process is complete, the count review document gets the Completed status and the
inventory adjustment is generated and released in the system. On the Adjustment Info tab,
click the reference number to review the transaction.
The system generates the inventory transaction to adjust the variance quantities registered in
the count review document. For each count line with a variance quantity, the system generates
the corresponding adjustment line with the reason code taken from the count line (see the
screenshot below). Thus, the variance quantity (1 unit) of the LEATHCASE item has been written
off the inventory in the amount of the extended variance cost, $90.
Figure: Inventory adjustment generated from the count review document
4. Make sure the GL transactions are generated from the adjustment and posted to the accounts.
Upon release of the inventory transaction, the system has also created and posted the GL
transaction to the inventory account and the account that is specified with the INADJ code. The
GL transaction looks as follows:
| Step 6.4: Processing the Count Result | 117
520000 - Inventory Adjustments account, Dr $90

130000 - Merchandise Inventory account, Cr $90
You have completed the physical inventory process and adjusted the book quantity of items in the
system according to the count result.
Related Links
Inventory Adjustments (IN303000)
Cycle Counts
You can use the system to perform cycle counting for particular items, for items selected by ABC
categories or selected by inventory turnover ratio (movement classes). For more information, see
Overview of Physical Inventory Options in the Acumatica ERP User Guide.
Lesson Summary
In this lesson, you have learned to prepare the system for physical count, prepare accurate book
quantities, start the counting process in the system, print the supportive documents, and process the
count result.
The book quantity for physical count doesn't include the item quantities on the IN Issues and SO
Shipped lines, which are the lines of unreleased issues and not yet issued shipments. Before you
prepare the count lines and start the counting process, you have to review the unreleased inventory
transactions by using the Unreleased Inventory Documents report (IN656000) to determine the
transactions that will not be included in the book quantities.
You can import the count result from an Excel file to the Physical Inventory Review form (IN305000)
and then process the count review document to adjust inventory so that the book quantities are equal
to the physical quantities of items that have been found at the warehouse.
| Lesson 7: Closing Procedures | 120
Lesson 7: Closing Procedures

In this lesson, you will learn to review processed and unprocessed inventory transactions in the module.
Also, you will learn to reconcile the balance of the inventory account in the Inventory module with
the account balance in the General Ledger module to verify the account balance and the processed
transactions.
Lesson Objectives
Review unprocessed inventory transactions
Reconcile the cost of inventory with the inventory account balance in General Ledger
Close a financial period in Inventory

| Financial Period Closing in Inventory | 121
Financial Period Closing in Inventory

On a regular basis, MyCompany prepares financial reports to authorities and to the company
management. Before the reports can be prepared for a financial period, the company has to verify the
account balances and processed all necessary transactions to the period, and then close the financial
period for further transaction processing. Financial periods are closed in each module individually: in
Inventory, Accounts Receivable, Accounts Payable, Fixed Assets, Cash Management, and General Ledger
in the end.
Approaching to half-year financial period closing in Inventory, MyCompany performs the following
procedures:
The company conducts physical inventory, and the responsible manager makes the necessary
inventory adjustments.
The manager verifies and processes the necessary inventory transactions to the period.
The accountant reconciles the inventory account balance in the Inventory and General Ledger
modules for the period.
After that, the accountant closes the financial period in Inventory.
After the financial period is closed in all listed modules, the accountant prepares financial reports.
Closing a financial period in a module is a technical procedure that helps to prevent posting of new
transactions from this module to the closed period, which is unwanted or might be even forbidden after
all figures have been verified and disclosed in the reports.
You have already seen the example of physical inventory process in the previous lesson. In this lesson,
you will learn how the last two processes from the list above can be performed in the system.
| Step 7.1: Reviewing Unprocessed Inventory Transactions | 122
Step 7.1: Reviewing Unprocessed Inventory Transactions

To prepare for period closing, you can review the inventory transactions that have been entered in the
system but not yet processed to the end. Review the unprocessed inventory transactions for periods
from 03-2014 to 06-2014 as follows:
1. On the Close Financial Periods form (IN509000; Distribution > Inventory > Processes > Closing),
select periods from 03-2014 to 06-2014, which haven't been closed yet, and click Unreleased
Documents on the form toolbar.
The Unreleased IN Documents report (IN656000) shows inventory transactions that have the On
Hold or Balanced status in the system and haven't been processed yet. To prepare the selected
periods for closing, you have to review each unprocessed transaction in the report and either
release or remove it, or change the post period in the transaction so that the report is empty
for the periods that you are going to close. You cannot close a financial period in the Inventory
module until there are unprocessed transactions in this period in the module.
2. There is one inventory receipt on hold that you have entered in Step 5.1: Analyzing the Item
Quantities. Suppose the goods were received to the warehouse on 6/30/2014 after the physical
count was complete. In the inventory receipt, leave the transaction date as is: 5/15/2014 would
be the date on which the transaction was created; change the post period of the transaction to
06-2014, to which the transaction will be processed. Release the inventory receipt.
Figure: Unprocessed inventory transactions in the system
3. Review the Unreleased IN Documents report (IN656000) again to make sure the report is empty,
and you have no more transactions for review.
To review unprocessed inventory transactions (balanced), you can use the Inventory Edit Summary
(IN610500) and Inventory Edit Details (IN611000) reports located under Distribution > Inventory >
Reports > Audit, and the Unreleased IN Documents report (IN656000) that you can run from the Close
Financial Periods form (IN509000).
To review processed inventory transactions (released), you can use the Inventory Register report
(IN614000; Distribution > Inventory > Reports > Audit).
Related Links
Close Financial Periods (IN509000)
Inventory Edit Summary (IN610500)
Inventory Edit Details (IN611000)
Inventory Register (IN614000)
| Step 7.2: Reconciling the Cost of Inventory with the GL Account Balance | 123
Step 7.2: Reconciling the Cost of Inventory with the GL

Account Balance
You can reconcile the inventory account balance by comparing the account balance calculated by
inventory transactions with the account balance calculated by general ledger transactions. If a
mismatch is discovered, each transaction has to be carefully reviewed in the Inventory and General
Ledger module, and the corrective actions have to made to eliminate the mismatch. Reconciliation is a
recommended practice before period closing to verify the account balance and the transactions in the
inventory account.
Because you have processed inventory transactions only for 05-2014 and 06-2014 periods since the
beginning of the course, you have to review the inventory account balance for only these periods.
The 06-2014 period is the last activity period in Inventory. You have no inventory transactions
processed to a financial period later than 06-2014. For the last activity period, the inventory account
balance equals the cost of the inventory on hand, which you can view by using the Inventory Valuation
summary report (IN615500). To review the inventory account balance for preceding periods, which can
be called "historical" in the Inventory module in contrast to the last activity period, you have to use
other reports that are described below.
1. Reconcile the inventory account balance for a historical period by using the Historical Inventory
Valuation summary report (IN617000).
2. Reconcile the inventory account balance for the last activity period by using the Inventory
Valuation summary report (IN615500).
Upon completion of the examples, read the articles:
What If the Balances Disagree
When the Validate Inventory Process is Helpful
1. Reconcile the Inventory Account Balance by Using the Historical Inventory Valuation
Summary Report
For historical periods, you can use the Historical Inventory Valuation summary report (IN617000) and
the Inventory Transactions by Account form (IN403000) to review the inventory account balance in the
Inventory module.
Complete the following steps to reconcile the inventory account balance for 05-2014 in Inventory and
General Ledger:
1. Review the account balance calculated by inventory transactions by running the Historical
Inventory Valuation summary report (IN617000; Distribution > Inventory > Reports > Balances)
with the following parameters:
Format: Summary
Start Period: 05-2014
End Period: 05-2014
The summary report shows transaction summaries by inventory item, grouped by account and
subaccount to which the summarized transactions have been processed in the Inventory module.
For each item, the summaries by period are presented for each period within the specified range.
The first row of the summary shows the cost of the item for the account, subaccount and period;
while the second row shows the quantity of the item (see the screenshot below).
Account/Subaccount Begin and Account/Subaccount End shows the beginning and
ending balances on the subaccount for the selected period range. Because you are not using
subaccounts in this course, the Account/Subaccount End line at the last page of the report
shows the ending balance of the inventory account. You are using only one inventory account,
and the ending balance of 130000 - Merchandise Inventory by inventory transactions is $9500,
as the report shows.
Figure: The inventory account balance by inventory transactions for 05-2014
2. Review the inventory transactions for the 05-2014 period by using the Inventory Transactions by
Account form (IN403000; Distribution > Inventory > Work Area > Explore). Select the following
parameters on the form:
Inventory Account: 130000 - Merchandise Inventory
Period: 05-2014
By Financial Period: Selected
With these parameters, the form shows inventory transactions processed to the selected
inventory account and financial period. Each record is an inventory transaction that corresponds
to a line in the released inventory entry. The Beginning Balance and Ending Balance columns
show running totals calculated by the listed transactions. If you specify additional filtering
parameters on the form, the running totals are recalculated. Beginning Balance in the first row
starts from the beginning balance of the inventory account for the selected period.
By default, the transaction lines are ordered by the transaction date (the Date column), then by
the transaction type (the Tran. Type column), reference number (the Reference Nbr. column),
and the line number in the transaction.
Fin. Period shows the financial period that is specified in the Post Period of the inventory
transaction. Tran. Period shows the financial period to which the transaction date belongs,
which is not necessarily equal to the post period. The corresponding GL transaction is posted to
the Post Period of the inventory transaction.
Period that you specify in the form parameters filters transactions either by Post Period
or Tran. Period of the transaction. If the By Financial Period check box is selected, the
transactions are filtered by Post Period, otherwiseby Tran. Period. With the Start Date
and End Date parameters on the form, you can additionally filter the transactions within the
specified financial period.
In the last row, the Ending Balance column shows the ending balance of the account for
05-2014. Since you have retrieved to the form all inventory transactions processed to the
inventory account for 05-2014, the last row shows the ending balance of the account, which is
$9500.
3. Run the Trial Balance Summary report (GL632000; Finance > General Ledger > Reports >
Balance) for 05-2014:
Ledger ID: ACTUAL
Financial Period: 05-2014
Find the ending balance of the 130000 - Merchandise Inventory account, which is $9500. The
balance of the inventory account agrees in the Inventory and General Ledger module, therefore
the account is reconciled.
Figure: The inventory account balance by general ledger transactions for 05-2014
2. Reconcile the Inventory Account Balance by Using the Inventory Valuation Summary
Report
For the last activity period, you can use the Historical Inventory Valuation summary report (IN617000),
the Inventory Transactions by Account form (IN403000), and the Inventory Valuation summary report
(IN615500) to review the inventory account balance in the Inventory module.
Complete the following steps to reconcile the inventory account balance for 06-2014 in Inventory and
General Ledger:
1. Review the account balance calculated by inventory transactions by running the Inventory
Valuation summary report (IN615500; Distribution > Inventory > Reports > Balances) with the
following parameters:
Format: Summary
The report shows the ending balance of the inventory account for the last activity period in
Inventory. According to the report, the ending balance of the 130000 - Merchandise Inventory
account is $14,410.

2. Review the inventory transactions for the 06-2014 period by using the Inventory Transactions by
Account form (IN403000; Distribution > Inventory > Work Area > Explore). Select the following
parameters on the form:
Period: 06-2014
By Financial Period: Selected
You can review the transactions on this form, and see that the 130000 inventory account
balance is $14,410 for 06-2014.
3. Run the Trial Balance Summary report (GL632000; Finance > General Ledger > Reports >
Balance) for 06-2014:
Ledger ID: ACTUAL
Financial Period: 06-2014
Figure: The inventory account balance by general ledger transactions for 06-2014
You have reconciled the balance of the inventory account for 05-2014 and 06-2014 in the Inventory and
General Ledger modules. Now you can close these financial periods in Inventory.
What If the Balances Disagree

If the balances don't agree, you have to review every transaction in the Inventory and General Ledger
modules to find the mismatching entries.
In the Inventory module, you can review the transactions one by one by using the Inventory
Transactions by Account form (IN403000). In the General Ledger module, you can review the
transactions one by one by using the Account Details form (GL404000) for the same period and
inventory account, respectively.
If there is an inventory transaction on the Inventory Transactions by Account form (IN403000), which is
missing in the GL account on the Account Details form (GL404000), 1) review the inventory transaction
and make sure the GL transaction has been generated for it; the transactions could be not generated if
the Update GL check box was cleared when the inventory transaction was released; 2) Review the Post
Transactions form (GL502000) to see if there are any Unposted batches of journal transactions, process
the needed transactions to eliminate the discrepancy.
If there is a GL transaction on the Account Details form (GL404000), which is missing on the Inventory
Transactions by Account form (IN403000), open the batch of journal transactions and find the source
document for it. Depending on the reason why the GL entry has been directly processed to the
inventory account without the processing from the Inventory module, you can either correct the GL
transaction or process the missing inventory transaction in the Inventory module and reverse the
generated batch to equate the balance of the inventory account in the modules.
Because you have set the Post Option to Detail for the 130000 inventory account on the Chart of
Accounts form (GL202500), detail journal entries are always posted to the inventory account regardless
of the Inventory module settings, and the GL entries in the inventory account on the Account Details form
(GL404000) can be one to one matched to the transaction lines on the Inventory Transactions by Account
form (IN403000). Otherwise, if the summary posting to the inventory account is configured for GL, a
number of inventory transaction lines will correspond to one summarized GL entry. If you use summary
posting to inventory account in GL, we recommend that you specify unique sequence numbers for different
inventory transaction types, so that you can group the inventory transaction lines by transaction type and
reference number and match them one to one to the summarized GL entries in the inventory account, if
needed.
When the Validate Inventory Process is Helpful

You already know that the Validate Inventory process must be run if you update the availability
calculation settings that apply to inventory items after you have changed the settings. This process can
also be used to recalculate the inventory account balance for periods. Note that this process doesn't
affect the on hand quantity of items in inventory, because this quantity is updated with every released
inventory transaction and tracked separately from the inventory account balance.
Thus, the process that you can run on the Validate Inventory form (IN505000) performs the following
operations:
1. Recalculates the available quantity and the subtotals by allocation type that are stored in the
database and that you can view on the Inventory Summary form (IN401000). This operation is
always performed when you run the process on the form.
2. Clears all transaction history for the inventory account in the Inventory module, which you
can view in the Historical Inventory Valuation report (IN617000), rebuilds the history again
and recalculates the balance of the inventory account in the module by the released inventory
transactions. To perform this operation, you have to select the Rebuild Item History check box
on the form and specify the start financial period. The system rebuilds the transaction history for
each financial period starting from the specified one up to the last activity period in the module.
In addition to the listed operations, on the Validate Inventory form (IN505000), you can run the process of
recalculation of quantities that are on the SO Back Ordered allocation type at the moment. To perform this
operation, you have to select the Replan Back Orders check box on the form and run the process. This
is an optional process that might be used in the processing of sales orders, which is described later in this
course.
You don't have to run the process on the Validate Inventory form (IN505000) at the moment.
Related Links
Historical Inventory Valuation (IN617000)
Inventory Transactions by Account (IN403000)
Trial Balance Summary (GL632000)
Account Details (GL404000)
Validate Inventory (IN505000)
| Step 7.3: Closing a Financial Period | 130
Step 7.3: Closing a Financial Period

Now all needed inventory and general ledger transactions are processed to the periods from 03-2014 to
06-2014 (actually to 05-2014 and 06-2014) and these periods can be closed in Inventory.
On 6/30/2014, the company has conducted physical inventory. The accountant is going to prepare
financial reports for the first half of the financial year and wants to close the financial periods from
03-2014 to 06-2014 in Inventory (the previous periods are already closed in the system). Closing a
financial period in the Inventory module is a technical procedure that helps to prevent posting of new
transactions from the module to the closed period.
Close 03-2014 to 06-2014 in Inventory:
1. On the Close Financial Periods form (IN509000; Distribution > Inventory > Processes > Closing),
select the periods from 03-2014 to 06-2014 (you can click 06-2014 and the preceding ones will
be selected automatically).
The selected periods are shown on the screenshot below.
2. Click Close Periods on the form toolbar to close the periods in Inventory.
The system verifies that there are no unprocessed inventory transactions entered for these
periods, and marks the periods as closed in the Inventory module.
Upon completion of the process, the closed periods are removed from the list on this form. After
you close the last financial period of a year, the periods for the next financial year appear on the
form (if they are defined in the system).
Figure: Financial periods selected to be closed in the Inventory module
The closed periods cannot be selected in Post Period on inventory transactions data entry forms.
However, a closed period can be typed manually in a transaction and the inventory transaction can still
be processed to the period because the Allow Posting to Closed Periods check box is selected on the
General Ledger Preferences form (GL102000). The Allow Posting to Closed Periods setting applies
to the transactions that are produced by all modules that output transactions to the General Ledger
module.
In practice, you can choose the Allow Posting to Closed Periods setting that best fits the period closing
policy of the company. If you select the Allow Posting to Closed Periods check box, the accountant
has an opportunity to process corrections to the closed periods, if necessary. To forbid the processing of
transactions to a closed period, the accountant has to deactivate the period in the system, which forbids
the processing of transactions to the period for all modules at once. If you clear the check box on the
General Ledger Preferences form (GL102000), the accountant has no opportunity to process a correction
to a closed period. However, the periods are closed for each module individually and the processing of
transactions becomes forbidden individually for each module. You don't have to change this setting in this
course.
Related Links
| Step 7.3: Closing a Financial Period | 131
Period-End Closing Procedures

Close Financial Periods (IN509000)
General Ledger Preferences (GL102000)
Financial Year and Financial Periods
You can find more information setting up the financial year and defining financial periods in the system
in the Financial Year and Financial Periods article in the Acumatica ERP User Guide.
Lesson Summary
In this lesson, you have learned how you can review unprocessed inventory transactions and reconcile
the inventory account balance in the Inventory and General Ledger module. These activities could be
a part of a regular preparation procedure for financial period closing in the Inventory module and the
system. You have also learned how to close the financial period in the Inventory module.
To review unprocessed inventory transactions, you can use the Unreleased Inventory Documents
report (IN656000) that you can run from the Close Financial Periods form (IN509000) in the Inventory
module.
To reconcile the inventory account balance, you can use the Historical Inventory Valuation summary
report (IN617000). To review the transactions that have been processed to an inventory account in the
Inventory module, you can use the Inventory Transactions by Account form (IN403000).
| Lesson 8: Multiple Units of Measure | 134
Lesson 8: Multiple Units of Measure

MyCompany purchases items with larger units of measure than ones in which the company sells them
to customers. In this lesson, you will learn to define multiple units of measure (UOMs) that can be used
for the same inventory item in documents and transactions.
The functionality that is described in this lesson is provided by the additional Multiple Units of Measure
feature that you will enable in this lesson.
Lesson Objectives
Select the base unit of measure for an inventory item
Define new units of measure in the system
Define the conversion between units that can apply to an inventory item
Process inventory transactions in different units of measure for the same inventory item
Review the transaction quantities on the Inventory Transactions by Account (IN403000) and
Inventory Transaction History forms (IN405000)
| Units of Measure for Inventory Items | 135
Units of Measure for Inventory Items

So far you could process transactions only in the base unit of measure of inventory items. After you
enable the Multiple Units of Measure feature, you will be able to process transactions in other than base
units of measure. You can define unit conversions between multiple units that can apply to the same
inventory item and specify different purchase units and sales units for inventory items.
In this topic, you will learn to select the base unit of measure (UOM) for inventory items and use
different units of measure for stock items and non-stock items. The detail information is provided in
sections below.
Quantity Precision
Selecting the Base Unit for an Item
UOMs of Stock Items
UOMs of Non-Stock Items
Prices in Different UOMs
Inventory Transactions in Different UOMs
Quantity Precision
In this course, you are using the default quantity precision of two decimal places. The quantity precision
is specified in the Quantity Decimal Places setting on the Branches form (CS102000). This setting
applies to the item quantities on the data entry forms and in reports. The quantity precision can
be increased, if needed, at the very beginning step of the system configuration. The setting can be
changed by editing any branch, and once saved, it applies to quantities in the entire system for all
branches.
Selecting the Base Unit for an Item

In one of the first lessons, you have defined the PC (piece) unit of measure as the base unit for
supplementary devices. You have selected the base unit according to the requirement that the base unit
of an item has to be the smallest unit among all possible purchase and sales units that can apply to the
item to minimize rounding inaccuracy. We recommend that you follow this requirement in production
systems and configure the smallest units of the items as their base units.
UOMs of Stock Items

Inventory receipt entries and issue entries are processed in the unit of measure that is specified on
the corresponding data entry form, Receipts (IN301000) or Issues (IN301000). During the inventory
transaction release, the system converts the received or issued quantity into the quantity in the base
unit of measure and records the transaction to the inventory account in the base unit of measure.
The on-hand and available quantities of items in inventory are tracked in the base unit of measure.
In all inventory reports and inquiry forms, the item quantity is reflected in the base unit of measure,
in particular, in the Inventory Valuation report (IN615500), on the Inventory Transactions by Account
form (IN403000) and on the Inventory Transaction History form (IN405000). Physical count review
documents are also prepared in base units.
For information purposes, the transaction quantity in the base unit of measure is also copied to the
batch of general ledger transactions.
The base unit of the item is specified in the Base Unit setting on the Stock Items form (IN202500).
The base unit cannot be changed after the first inventory transaction has been processed with the item.
After you enable the Multiple Units of Measure feature, you can specify different purchase units and
sales units of stock items. For stock items, Purchase Unit specifies the default unit of measure that is
suggested for the item on the Receipts form (IN301000) and on the Purchase Orders form (PO301000).
Sales Unit specifies the default unit of measure that is suggested for the item on the Issues form
(IN302000) and on the Sales Orders form (SO301000).
UOMs of Non-Stock Items

For non-stock items, the base unit is used as the default one on data entry forms where you select the
item. The base unit of a non-stock item is specified in the Base Unit setting on the Non-Stock Items
form (IN202000). You can change the base unit of a non-stock item at anytime.
For information purposes, to the batch of general ledger transactions generated from a document with
a non-stock item, the system copies the quantity and the unit of measure from the document as is,
without conversion to the base unit of measure.
After you enable the Multiple Units of Measure feature, you can specify different purchase units and
sales units of non-stock items. For non-stock items, Purchase Unit specifies the default unit of
measure that is suggested for the item on the Bills and Adjustments form (IN301000) and on the
Purchase Orders form (PO301000). Sales Unit specifies the default unit of measure that is suggested
for the item on the Invoices and Memos form (AR301000) and on the Sales Orders form (SO301000).
Prices in Different UOMs

You can upload vendor price lists and maintain sales prices for customers in different UOMs. The prices
from vendor price lists automatically populate the prices in purchase orders and AP bills, while the
prices from customer price lists populate the prices in sales orders, and AR invoices on entry.
If there are prices for the same inventory item in different UOMs, the UOM-specific price is suggested
in the document where you select the item. If there is only the price in the base UOM, the system
calculates the price for the convertible UOMs based on the conversion that is specified in the item. For
example, if an item's sales price is $10 in the base PC unit, the calculated price of one LOT6 unit of
that item would be $10 * 6 = $60. The system calculates prices for different UOMs only from the price
defined in the base UOM of the item. You will see an example with vendor prices later in this course.
The system searches for the UOM-specific price at every level of price hierarchy that is described in the
F200 Financials: Intermediate training course.
Inventory Transactions in Different UOMs

Suppose you have defined the conversion of one lot into item pieces as 1 LOT6 = 6 PC. Suppose that
you are receiving 2 lots of the item to inventory at the total cost of $200. On release of the inventory
receipt, the system records to inventory the received quantity in the base unit of measure:
1. The system calculates the transaction quantity in the base unit of measure, 2 lots * 6 conversion
factor = 12.00. The product is rounded according to the Quantity Decimal Places setting on
the Branches form (CS102000). By default, the quantity precision equals two decimal places.
2. The quantity of 12 units is added to the on hand quantity of the item and reflected in the
Inventory Valuation report (IN615500).
3. The total cost of the transaction is recorded to the inventory account, $200. This cost is reflected
in the Inventory Valuation report (IN615500) and posted to the GL accounts.
The total cost of 12 pieces on hand equals $200. Suppose that the item is valuated under the average
costing method, and you are issuing one lot of the item from inventory. On release of the inventory
issue, the system calculates the issued cost by the total cost of inventory and the issued quantity in the
base unit of measure:
1. The system calculates the transaction quantity in the base unit of measure, 1 lot * 6 conversion
factor = 6.00. The product is rounded according to the Quantity Decimal Places setting on the
Branches form (CS102000).
2. The system calculates the total cost of the transaction by proportion as 6 / 12 * $200 =
$100.00, which is rounded according to the Decimal Precision setting on the Branches form
(CS102000). The issued cost is subtracted from inventory as $200 - $100.00 = $100.00, and
the remaining cost is reflected in the Inventory Valuation report (IN615500). The Decimal
Precision setting on the Branches form (CS102000) specifies the precision of base currency
amounts, and it applies to the total cost of the inventory transaction as to the actual amount
that is posted to the GL accounts as well.
| Step 8.1: Defining the New Units of Measure | 138
Step 8.1: Defining the New Units of Measure

Suppose that you are going to purchase supplementary devices MOUSE, HEADSET, and KEYBOARD with
lots of pieces (PC) of different size and you need to define the units of measure to be able to count the
items with the corresponding lots:
LOT6 = 6 PC
LOT10 = 10 PC
To add new UOMs to the system, you have to:
1. Define the new units on the Units of Measure form (CS203100).
2. Define the global conversions of the units on the Units of Measure form (CS203100).
You have to define the global conversions to be able to select the new units in the Purchase
Unit or Sales Unit boxes in the item settings on the Stock Items (IN202500) and Non-Stock
Items form (IN202000).
3. Explicitly define the conversions from each new unit into the base unit of the inventory item for
which you are going to use the new UOMs.
Global conversions do not directly apply to inventory items. For each item, you have to specify
an item-specific conversion of every extra unit into the base unit, however, you can easily
copy the global conversions to multiple inventory items through item classes. When you
create an item class on the Item Classes form (IN201000), the applicable global conversions
are automatically copied to the item class settings. From the item class, the conversions are
further copied to inventory items that you assign to the item class. You can also copy a global
conversion directly to inventory items, which you will do later in this lesson.
When you create item classes and inventory items, you can specify new units of measure and
conversions "on the fly" without having to define them first in the global list on the Units of Measure
form (CS203100). This allows you to import the item data without having to define a global list
of units of measure and conversions in the system. However, once defined in the global list, the
conversions between units of measure are populated in new item classes and inventory items,
which may help you to simplify import procedures for inventory data.
You have to define the conversion from the purchase units and sales units into the base units of items.
You can define the conversion from one unit of measure into another by adding one of the following
alternative definitions. For example, to define the conversion from LOT10 and PC, you can add either of
the following definitions:
"To convert from LOT10 to PC, the LOT10 quantity must be multiplied by 10"
"To convert from LOT10 to PC, the LOT10 quantity must be divided by 0.1"
The variant with fractional ratio is not recommended in case if the fraction is infinite, for example, "To
convert from LOT6 to PC, the LOT6 quantity must be divided by 0.166667", because it provides lower
accuracy of conversions than the following definition: "To convert from LOT6 to PC, the LOT6 quantity
must be multiplied by 6".
Conversions do not apply symmetrically. If you define the conversion in one direction, from LOT6 to
PC, the system does not infer the conversion in the other direction, from PC to LOT6, you have to define
it explicitly. If you had an inventory item with base unit LOT6, you would have to explicitly define the
conversion from PC to LOT6 to be able to use the PC unit for that item.
Conversions do not apply transitively. If you defined two conversions, from DAY to HOUR and from HOUR
to MINUTE, the system does not infer the conversion from DAY to MINUTE, you have to define it explicitly.
If you had an inventory item with base unit MINUTE, you would have to explicitly define the conversion
from DAY to MINUTE to be able to use the DAY unit for that item.
Complete the instructions below to enable the Multiple Units of Measure feature, define the new UOMs
in the system, and specify the conversions from the new units into the PC unit.
1. On the Enable/Disable Features form (CS100000), enable the Multiple Units of Measure feature,
which is located under the Distribution > Standard Distribution group of features as shown
on the screenshot below.
Now for each inventory item, you can define the conversions from purchase units and sale units
into the base units. After that, you will be able to process documents with other than base units
of measure of the items.
Figure: The Multiple Units of Measure feature selected for enablement
2. On the Units of Measure form (CS203100), define the new LOT6 and LOT10 units of measure as
follows:
a. Define the LOT6 unit of measure:
From Unit: LOT6
To Unit: LOT6
Multiply/Divide: Multiply
b. Define the LOT10 unit of measure:
From Unit: LOT10
To Unit: LOT10
3. On the Units of Measure form (CS203100), define the global conversions from LOT6 and from
LOT10 to PC as follows:
a. Define the conversion between LOT6 and PC:

You have decided to define the conversion from LOT6 to PC as "to convert from LOT6 to
PC, the LOT6 quantity must be multiplied by 6". Specify the conversion as follows:
From Unit: LOT6
To Unit: PC
b. Define the conversion between LOT10 and PC and save the changes:
From Unit: LOT10
To Unit: PC
You have defined the new units LOT6 and LOT10 and the global conversion from these units to PC (see
the screenshot below). These conversions will be automatically copied to the new item classes in which
you select PC as the base unit on the Item Classes form (IN201000).
Figure: New units of measure with the global conversion defined in the system
Now you have to copy the conversion rules to the settings of particular inventory items.
Related Links
Units of Measure (CS203100)
Overview of the Acumatica ERP Features (Multiple Units of Measure)
Enable/Disable Features (CS100000)
| Step 8.2: Defining the UOM Conversions for Inventory Items | 142
Step 8.2: Defining the UOM Conversions for Inventory Items

To be able to use the new units for existing items, you have to define the item-specific conversions in
the item settings on the Stock Items (IN202500) or Non-Stock Items form (IN202000).
Define the item-specific conversions for the HEADSET, KEYBOARD, and MOUSE items as follows:
1. Define the conversion from LOT10 and LOT6 to PC for the HEADSET inventory item:
a. On the Stock Items form (IN202500), select the HEADSET item.
b. On the General Settings tab, set Purchase Unit to LOT6.
The conversion from LOT6 to PC has been automatically copied from the global list to the
table of UOM conversions for the item.
c. Click Save to save the changes.
d. Set Purchase Unit to LOT10 and click Save.
The conversion from LOT10 to PC has been automatically copied from the global list to
the table of UOM conversions for the item.
e. Make sure the list of the item-specific conversions looks as the following screenshot
shows and click Save to save the changes.
Figure: Item-specific conversions of units for the HEADSET item
2. In a similar way, add the conversions from the LOT6 and LOT10 units to the settings of the
KEYBOARD inventory item. Leave LOT10 as the purchase unit.
3. In a similar way, add the conversions from the LOT6 and LOT10 units to the settings of the
MOUSE inventory item. Set LOT10 as the purchase unit.
Now the inventory items are ready for processing inventory transactions in the LOT10 and LOT6 units
along with the transactions in base unit PC.
The order in which you define the configuration entities in this course differs from the configuration order
recommended for a production system. For training purposes, you define the units of measure just before
you need them in the examples of this course. If you configure a production system, you have to define
the UOMs and the conversions on the Units of Measure form (CS203100) from the very beginning, before
you create item classes. Then, the defined conversions are automatically copied to the item classes, from
where the information is copied to the inventory items assigned to the item classes. In the example of
this course, because you have defined the units of measure not from the very beginning, you have to add
the conversions to each inventory item individually. For the recommended order of configuration steps
| Step 8.2: Defining the UOM Conversions for Inventory Items | 143
for a production system, see the references to the Acumatica ERP Implementation Guide in the Additional
Information section of this lesson.
Related Links
| Step 8.3: Processing Inventory Transactions in Other Than Base Units | 144
Step 8.3: Processing Inventory Transactions in Other Than

Base Units
Process the inventory transactions in LOT10 and LOT6 units for the item with the PC base unit and
review the transaction quantities that are reflected on the inquiry forms. Complete the following
instructions:
1. Process an inventory receipt of the MOUSE item in the LOT10 unit of measure.
2. Process an inventory issue of the MOUSE item in the LOT6 unit of measure.
3. Review the transaction quantities that are reflected on the Inventory Transactions by Account
(IN403000) and Inventory Transaction History forms (IN405000).
1. Process an Inventory Receipt

On 7/1/2014, you have received one LOT10 unit of the MOUSE item purchased for inventory. Process
the inventory receipt and review the inventory transaction as follows:
1. On the Receipts form (IN301000), create the inventory receipt with the following information:
Date: 7/1/2014
Description: One LOT10 computer mouse
Transaction Details tab, Inventory ID: MOUSE
Transaction Details tab, Quantity: 1.00
Transaction Details tab, UOM: LOT10
Transaction Details tab, Unit Cost: 95.00
The system suggests the purchase unit of the item as the default one for data entry on this
form. LOT10 unit is specified as the purchase unit of the MOUSE item on the General Settings
tab of the Stock Items form (IN202500).
2. Release the receipt.

Inventory transaction is processed in the specified units of measure, which may differ from the
base unit. The base unit of the MOUSE item is PC. Because you have configured the conversion
from LOT10 to PC for the item, you can process inventory transactions with the item in LOT10
units (see the screenshot below).
On release of the inventory receipt, the system has increased the cost of the MOUSE item in
inventory by $95, which is the extended cost of the transaction. The system has also increased
the on-hand quantity of MOUSE by the transaction quantity in the base unit of measure of the
item. One LOT10 equals 10 PC units according to the conversion specified for the MOUSE item as
1 LOT10 = 10 PC. The on-hand quantity of MOUSE has been increased by 10 units.
Figure: Inventory receipt in other than the base unit of the item
3. After the receipt is released, review the batch of general ledger transactions.
For information purposes, the transaction quantity is also recorded to the batch of general ledger
transactions in the base unit of measure of the item. The quantity of 10 PC units has been
recorded to the batch (see the screenshot below).
Figure: The quantity in the base unit of measure in GL transactions
4. Run the Inventory Valuation summary report (IN615500) to review the total cost of the MOUSE
item on hand.
At the moment, you should have 20 PC of the MOUSE item to the total cost of $195.
In this example, you do not have to process the AP bill for the purchase.
2. Process an Inventory Issue

On 7/2/2014, you have sold 6 computer mouse units to a customer. You have issued the goods from
the warehouse, and now you have to process the transaction to the cost of goods sold account in the
system. You have decided to process the transaction as the issue of one LOT6 unit from inventory.
Complete the following instructions:
1. On the Issues form (IN302000), create the inventory issue with the following information:
Date: 7/2/2014
Description: Six computer mouse pieces sold
Transaction Details tab, Tran. Type: Invoice
Transaction Details tab, Inventory ID: MOUSE
Transaction Details tab, Quantity: 1.00
Transaction Details tab, UOM: LOT6
The system suggests the sales unit of the item as the default one for data entry on this form. PC
unit is specified as the sales unit of the MOUSE item on the General Settings tab of the Stock
Items form (IN202500). In this example, you change the unit in the transaction to see how the
system processes the issue transaction in other than base unit of the item.
2. Release the issue.

Because you have configured the conversion from LOT6 to PC for the item, you can process
inventory transactions with the item in LOT6 units. During the inventory issue release, the
system converts the specified quantity to the base unit and calculates the extended cost of the
transaction to be issued from inventory (see the screenshot below). According to the conversion
specified for the item, one LOT6 unit equals 6 pieces of the item to the extended cost of $58.50.
For the MOUSE item that is valuated under the average costing method, the extended cost has
been calculated as 6 issued pieces * $195 (total cost) / 20 pieces (on hand) = $58.50.
Figure: Inventory issue in other than the base unit of the item
3. Review the batch of general ledger transactions.

For information purposes, the transaction quantity is also recorded to the batch in the base unit
of measure. Thus, the $58.50 cost of 6 PC units has been credited to the inventory account, as
the screenshot below shows.
Figure: The quantity in the base unit of measure in GL transactions
In this example, you do not have to process the AR invoice for the sale.
3. Review the Transaction Quantities on Inquiry Forms

Review the processed transactions on the Inventory Transactions by Account (IN403000) and Inventory
Transaction History forms (IN405000) as follows:
1. Open the Inventory Transactions by Account form (IN403000), and select the following
parameters:
Period: 07-2014
The form shows that the receipt transaction has debited the inventory account by $95, while the
invoice transaction has credited the account by $58.50. In the inventory account, the transaction
quantity is recorded and displayed in the Qty column in the base unit of measure of the item
(see the screenshot below).
Unit cost is calculated for each transaction in the table as the transaction amount (Debit or
Credit) divided by the transaction quantity (Qty). The unit cost is displayed with the precision
specified in the Price/Cost Decimal Places setting on the Branches form (CS102000). By
default, the precision is 4 places after the decimal point.
Figure: The quantity in the base unit of measure on the Inventory Transactions by Account form
2. Open the Inventory Transaction History form (IN405000; Distribution > Inventory > Work Area
> Explore) and select the following parameters:
Inventory ID: MOUSE
Start Date: 7/1/2014
In the transaction history by inventory item, the transactions are recorded in the base unit
of measure. The Inventory Transaction History form (IN405000) shows the list of inventory
transactions with the item for the selected period of time. With empty End Date, the form
shows inventory transactions with the transaction date that belongs to the period of time starting
from Start Date up to the most recent transaction created in the system. With both empty
Start Date and End Date, the system retrieves the history of all transactions with the item.
All quantities are presented in the base unit of measure on this form. Ending Qty displays the
running total of the item quantity in inventory calculated by the inventory transactions retrieved
to this form. With the clear End Date parameter, the ending quantity in the last row of the table
equals the item quantity on hand. 14 PC of the MOUSE item remain in inventory after you have
processed the issue (see the screenshot below).
Unit cost is calculated for each transaction in the table as the transaction amount divided by the
transaction quantity (Qty. In or Qty. Out). The unit cost is displayed with the precision specified
in the Price/Cost Decimal Places setting on the Branches form (CS102000).
Figure: The quantity in the base unit of measure on the Inventory Transaction History form
Related Links
Receipts (IN301000)
Issues (IN302000)
Inventory Transactions by Account (IN403000)
Inventory Transaction History (IN405000)
The Order of Configuration Steps for a Production System
You have to define the units of measure and the conversion rules before you create the item classes.
For more information on the recommended order of configuration steps, see Implementing Inventory in
the Acumatica ERP Implementation Guide.
Lesson Summary
You have learned to define multiple units of measure for inventory items and learned to process
inventory transactions in other than base unit of a stock item.
If the Multiple Units of Measure feature is not enabled, you can process transactions only in the base
unit of measure of inventory items. With the Multiple Units of Measure feature, you can process
transactions in other than base units. To be able to use different units of measure for an inventory
item, you have to define the item-specific conversion of each extra unit into the item's base unit on the
corresponding Stock Items (IN202000) or Non-Stock Items form (IN202500). In the inventory reports
and inquiry forms, the quantities are presented in the base unit of measure.
For fast and accurate data entry, after you configure the units of measure, you can upload the vendor
price lists and maintain the sales prices in the respective UOMs so that the prices are automatically
populated in the documents. You will see an example further in this course.
| Part 2: Purchase Orders | 151
Part 2: Purchase Orders

In this part of the course, you will learn the basics of configuring and using the Purchase Orders module
for the following operations:
Processing a regular purchase order
Processing a purchase return
Processing a purchase receipt with a non-stock item
Processing a partial receipt
Processing a purchase receipt and AP bill separately
Review the purchasing documents and transactions
| Company Story: Purchasing | 152
Company Story: Purchasing

MyCompany purchases goods from the AcmeCo vendor, and pays for computer services to the
ServiceCo vendor on an hourly basis.
In the 07-2014 period, the company starts processing purchase orders in the system. In this period,
the company receives the first goods by the orders and processed the AP bills that should be paid to
vendors for the received goods. The company also uses purchase orders to order the service work from
the ServiceCo vendor.
| Lesson 9: Introduction to Purchase Orders | 153
Lesson 9: Introduction to Purchase Orders

The Purchase Orders module provides the purchase order management and the processing of
transactions that occur during the purchasing processes in the company. In this module, users work
with purchase orders and purchase receipts by the orders. In this lesson, you will configure the
Purchase Orders module to make the module ready for use.
Lesson Objectives
In this lesson, you will learn to provide the initial configuration for the Purchase Orders module,
including the following:
Configure a vendor account to skip the printing and emailing steps during the processing of
purchase orders
Configure the reason code for processing purchase returns
Specify the initial settings on the Purchase Orders Preferences form (PO101000)
| Step 9.1: Creating a Vendor | 154
Step 9.1: Creating a Vendor

In this step, you will create the vendor account in the system for the AcmeCo vendor company from
which MyCompany purchases goods for merchandise inventory. You will make purchase orders to this
vendor later in this course. Complete the following instructions:
1. On the Vendors form (AP303000), create a new account with the following information:
Vendor ID: (assigned automatically on saving)
Vendor Name: AcmeCo
General Info tab, Vendor Class: DEFAULT
2. On the Purchase Settings tab, clear the Print Orders and Send Orders by Email check
boxes and save the vendor account on the form.
You specify these settings to simplify the processing steps in the training course. With these
settings, the purchase orders that you will create to the AcmeCo vendor will not require printing
and sending the document by email before the documents can be processed further.
Figure: Making the printing and emailing of purchase orders to the vendor optional
Now the vendor account is ready for use in the system.

Related Links
Vendors (AP303000)
| Step 9.2: Uploading the Vendor's Price List | 155
Step 9.2: Uploading the Vendor's Price List

By uploading vendor prices to the system, you can simplify and speed up data entry in purchase orders
to the vendor. In this step, you will upload the list of prices offered by the AcmeCo vendor for goods
that can be purchased from that company.
Suppose that the AcmeCo vendor provides the price list in an Excel file. The latest price list contains the
prices that apply starting from 7/1/2014. Upload the price list as follows:
1. On the Vendor Price Worksheets form (AP202010; Finance > Account Payable > Work Area >
Enter), create a worksheet with the following information:
Effective Date: 7/1/2014
Description: AcmeCo price list as of 7/1/2014
2. On the table toolbar, click Load Record from File and select the Vendor Price Worksheet
7_2014.xlsx file provided for the course.
3. On the Common Settings and Columns steps of the wizard, leave all parameters as suggested
by default and upload the prices from the source file to the table.
4. After the upload is complete, make sure the worksheet looks as shown on the screenshot below.
You have uploaded the prices for goods offered by the AcmeCo vendor. For the HEADSET and
MOUSE items, the list contains a number of prices that differ by unit of measure. The vendor
offers a lower price if you purchase these items in greater units: one LOT10 unit of HEASET costs
$200, which is 20/PC, while the price of one PC unit is $22/unit according to the price list.
Figure: Vendor's price list in different UOMs
5. Clear the Hold check box in the worksheet and click Release to make the prices effective in the
system.
6. Open the Vendor Prices form (AP202000; Finance > Accounts > Payable > Work Area >
Manage).
The effective prices have appeared on this form.
Now, if you create a purchase order to AcmeCo with the 7/1/2014 or later document date and
select, for example, the MOUSE inventory item in the order line, the system will automatically
suggest the price of $100 per LOT10 unit of the item or $11 per PC unit in the order line. If
you select the LOT6 unit of the MOUSE item in the order line, the system suggests the price
calculated by the price in the base unit of measure of the item, which is PC. The price of one
| Step 9.2: Uploading the Vendor's Price List | 156
LOT6 unit of MOUSE will be calculated based on the unit conversion from LOT6 to PC defined for
the item as 1 LOT6 = 6 PC. The price of one LOT6 will be $66 calcualted as $11 * 6 = $66.
Figure: Effective vendor prices in the system
One worksheet may include prices from different vendors, prices for stock items and non-stock
items, as well as promotional and volume-dependent prices. For more information and examples,
see the F200 Financials: Intermediate training course.
The AcmeCo vendor's prices are ready to populate in the purchase orders created to the vendor.
Related Links
Vendor Price Lists
Vendor Price Worksheets (AP202010)
Vendor Prices (AP202000)
| Step 9.3: Configuring the Purchase Orders Module | 157
Step 9.3: Configuring the Purchase Orders Module

You have to configure the module to be able to create and process purchase orders.
In this step, you will specify the initial configuration of the Purchase Orders module to make the module
ready for use. Complete the following instructions:
define the PORETURN reason code to be able to process purchase returns to vendors from the
Purchase Orders module:
Reason Code: PORETURN
Description: Purchase return
Usage: Issue
Account: 596000 - Purchase Returns
You will use the PORETURN reason code to process GL transactions that are generated when
you return stock items to a vendor. The default reason code for purchase returns is required
for configuration of the Purchase Orders module. In the reason code for purchase returns,
we recommend that you specify a dedicated expense account, as shown in this example. The
PORETURN reason code specifies the following general ledger transaction:
596000 - Purchase Returns, Dr
Inventory account, Cr
The processing of purchase returns is described later in this course.
2. On the Purchase Orders Preferences form (PO101000; Distribution > Purchase Orders >
Configuration > Setup), specify the following settings and save the changes:
Freight Expense Account: 580000 (Delivery Services Expense)
This account is required for configuration of the Purchase Orders module, however you
won't use this account for transactions in this part of the course.
PO Return Reason Code: PORETURN
This setting specifies the default reason code for purchase returns. When you create a
purchase return, the system takes the default reason code for the lines from this setting.
The processing of purchase returns is described further.
Release IN Documents Automatically: Selected
If this check box is selected, the system immediately releases inventory transactions that
are generated from purchase receipts and returns except for the inventory adjustments
that can be generated from purchase receipts to allocate landed costs to inventory. The
processing of landed costs is outside of the scope of this course, see Additional Information
for further reference.
Vendor Price Update: None
This mode specifies that the last vendor price won't be tracked in the system, and you
will use only vendor price lists maintained on the Vendor Prices form (AP202000). Unlike
the price lists, the last vendor prices are ones maintained on the Vendor Inventory form
(PO201000; Distribution > Purchase Orders > Work Area > Manage).
In this course, you will use vendor price lists to populate the default prices in purchase
orders, which is alternative to the usage of last vendor prices as default prices. We
recommend that you use the price lists rather than last vendor prices because:
1. You can maintain actual price lists that might differ from the last vendor prices.
2. You can upload flexible price lists that support promotional prices and volume
prices.
3. You have more information for price analysis in the history of effective prices that
can be retained in the system over time.
| Step 9.3: Configuring the Purchase Orders Module | 158
For more information about vendor price lists, see Vendor Price Lists in the Related
Links section below. You can also find more examples with vendor price lists in the F200
Financials: Intermediate training course.
Now the Purchase Orders module is ready for processing purchase orders.
3. On the Accounts Payable Preferences form (AP101000), specify the following settings and save
the changes:
Hold Documents on Entry: Cleared
Validate Document Totals on Entry: Cleared
Require Vendor Reference: Cleared
Raise an Error on Duplicate Vendor Reference Number: Cleared
You have made the vendor reference number optional for input and simplified the data entry of
AP documents for this course.
Related Links
Vendor Price Lists
Reason Codes (CS211000)
Purchase Orders Preferences (PO101000)
Sending Emails to Vendors
You can configure the ability to send documents to vendors by email. For more information, see
Predefined Mailings for Customers and Vendors in the Acumatica ERP User Guide.
Vendor Prices
You can upload vendor price lists to the system to be able to easily populate prices in purchase orders
and AP bills. You can upload vendor prices for stock items and non-stock items, prices in different units
of measure and currency, promotional and volume-dependent prices. For more information, see Vendor
Price Lists in the Acumatica ERP User Guide; for examples, see the F200 Financials: Intermediate
training course.
Alternative Inventory IDs
You can upload vendors' inventory IDs as alternative identifiers of inventory items in the system, and
use these IDs to look up items for data entry and print these IDs in the purchase orders to vendors. For
more information, see Item Cross-References in the Acumatica ERP User Guide.
Purchase Requisitions
You can use the Purchase Requisitions module to process requests for goods and services, which
should pass the automated budget control and should be approved before the purchase order can
be generated. You can also use the module to support the bidding process. For more information on
processing purchase requests, see Overview (Purchase Requisitions) in the Acumatica ERP User Guide.
Landed Costs
You can process freight, insurance, and other costs associated with purchased goods as landed costs
in the system, so that you can proportionally allocate them on inventory and on the cost of goods sold.
For more information, see Landed Cost Tracking in the Acumatica ERP User Guide.
Lesson Summary
To provide a minimum configuration of the module, you have configure the reason code for processing
inventory transactions generated from purchase returns and specify the configuration on the Purchase
Orders Preference form (PO101000). We recommend that you use a dedicated expense account in that
reason code.
In the vendor account on the Vendors form (AP303000), you can make the printing and emailing of
purchase orders to the vendor optional so that the system skips the Pending Printing and Pending Email
statuses for the orders.
By selecting the Release IN Documents Automatically check box on the Purchase Orders
Preferences form (PO101000), you can make the system immediately release the inventory
transactions once they are generated from the purchase receipts and purchase returns released in the
Purchase Orders module. The processing of these transactions is described further in this course.
| Lesson 10: Purchase Order Process | 161
Lesson 10: Purchase Order Process

In this lesson, you will learn to process regular purchase orders that are orders of Normal type. You will
learn to create a purchase order, process a receipt by the order, and enter the accounts payable bill that
should be paid to the vendor for the received goods.
Lesson Objectives
Create a normal purchase order
Print a purchase order
Enter a purchase receipt
Release a purchase receipt
Enter and release the accounts payable bill for the receipt
Review the linked documents

| Purchase Order Process | 162
Purchase Order Process

You can use the following types of purchase orders:
Normal: A regular purchase order for goods and services, by which you are processing receipts
to inventory and AP bills. With standard functionality of the Distribution suite that you use in this
course, you can create and process only Normal purchase orders.
Standard: A template for creating normal purchase orders. The use of Standard purchase orders
is outside of the scope of this course.
Blanket. A blanket order by which you create normal purchase orders. The processing of Blanket
purchase orders is outside of the scope of this course.
Drop-ship. A drop-shipped order to a vendor, by which the goods are shipped from the vendor
directly to the customer without recording to your inventory. The processing of drop-shipped
orders is outside of the scope of this course.
The processing of normal purchase orders is described below.
Purchase Order Statuses
Purchase Order Lines
Purchase Order Processing
Purchase Order Statuses

During processing, a normal purchase order can have the following statuses:
On Hold: The purchase order is being edited. The open quantity of order lines is classified to the
PO Prepared allocation type on the Inventory Allocation Details form (IN402000).
Pending Approval (applicable only if the approval of purchase orders is configured): The purchase
order requires approval before the order can be open. The open quantity of order lines is classified
to the PO Prepared allocation type on the Inventory Allocation Details form (IN402000).
Pending Printing (applicable only if printing of purchase orders is required before the order can be
open): The purchase order requires printing before the order can be open. The open quantity of
order lines is classified to the PO Prepared allocation type on the Inventory Allocation Details form
(IN402000).
Pending Email (applicable only if emailing of purchase orders is required before the order can be
open): The purchase order requires sending by email before the order can be open. The open
quantity of order lines is classified to the PO Prepared allocation type on the Inventory Allocation
Details form (IN402000).
Open: The purchase order is pending a purchase receipt. Purchase receipts can be processed
by the order. The open quantity of order lines is classified to PO Order allocation type on the
Inventory Allocation Details form (IN402000).
Closed: The purchase order is complete. No more purchase receipts can be processed by the
order.
Canceled: The purchase order has been canceled. No purchase receipts can be processed by the
order.
Rejected: (applicable only if the approval of purchase orders is configured in the system). The
purchase order has been rejected by an employee who handles the approval.
Depending on the business process, you might want to correct purchase orders after they have been
completed. To do so, you can put the closed purchase order on hold again and start the order processing
from the beginning. This ability to put the closed purchase order on hold can be disabled in the system if it
is not needed.
Purchase Order Lines

Each line of a purchase order is processed individually. The open quantity of the order line, which is
classified by allocation types on the Inventory Allocation Details form (IN402000), is calculated as
Order Qty minus Qty. On Receipts of the line. Also, the open amount of the order line is calculated
as Amount minus Received Amt. of the line. A completed order line is indicated by the Completed
check box selected in the line. The system automatically selects the check box on release of a purchase
receipt that completes the order line. The purchase order gets the Closed status after all lines of the
order are completed.
To a normal purchase order, you can add lines of the following types, which are processed differently
depending on the line type:
Goods for IN: This type is defined automatically when you select a stock item. Goods for IN
line is processed through a purchase receipt only and cannot be added to a bill directly from
the purchase order. You have to specify a non-zero order quantity in this line. The order line is
completed when the quantity has been received in full. Billing is complete for the line once the
total receipt quantity of the line is selected in AP bills and the bills are released; the purchase
price variance is tracked for Goods for IN lines. You will see an example of processing Goods for
IN lines further.
Non-Stock: This type is defined automatically when you select a non-stock item that requires a
receipt. Non-Stock line is processed through a purchase receipt only and cannot be added to a bill
directly from the purchase order. You have to specify a non-zero order quantity in this line. The
order line is completed when the quantity or amount has been received in full according to the
condition specified in the Complete PO Line setting of the item on the Non-Stock Items form
(IN202000). Billing is complete for the line once the total receipt quantity of the line is selected in
AP bills and the bills are released; the purchase price variance is tracked for Non-Stock lines. You
will see an example of processing Non-Stock lines further.
Service: This type is defined automatically when you select a non-stock item that doesn't require
a receipt. Service line is not processed through a purchase receipt, it is added to a bill directly
from the purchase order. Order quantity is not required for this line. The order line is completed
when the quantity or amount has been billed in full according to the condition specified in the
Complete PO Line setting of the item on the Non-Stock Items form (IN202000). There is no
purchase price variance for Service lines because the transaction to the purchase accrual account
is not processed for these lines. You will see an example of processing Service lines further.
Freight: Use this line type to add a freight cost to process directly to an expense account without
allocation to inventory. To add such an expense, you have to leave Inventory ID empty and
select the Freight line type. The default expense account that is inserted into the line is taken
from the Freight Expense Account parameter on the Purchase Orders Preferences form
(PO101000). Freight line is copied to the purchase receipt and then copied from the purchase
receipt to the AP bill. Order quantity is not required for this line.
To be able to allocate freight costs on inventory, you have to process these costs as landed costs.
Landed cost processing is outside of the scope of this course.
Description: Use this line type to add a text line to the document for information purposes. To
add a text line, you have to leave Inventory ID empty and select the Description line type. Then
you can specify the text in Line Description, and the line will be printed in the purchase order.
Description lines are printed in purchase orders only and aren't copied to any other documents.
Purchase Order Processing

The diagram below shows the processing steps for an order with one Goods for IN line.
At first, you create the purchase order with the On Hold status on the Purchase Orders form
(PO301000), as step 1 on the diagram shows. After the data entry is complete, you clear the Hold
check box and the purchase order gets the Pending Approval status (2 on the diagram) and becomes
assigned to the people who handles the document approval according to the approval workflow
configured in the system. If the approval workflow is not configured for purchase orders, the Pending
Approval status is skipped for orders and they are moved to the next status. Approval workflow is
outside of the scope of this course. For more information on purchase order approvals, see references in
Additional Information.
After the purchase order has been approved (3 on the diagram), the order gets the Pending Printing
status if that status is applicable. Purchase orders with the Pending Printing status can be printed in
bulk by processing the orders on the Print/Email Purchase Orders form (PO503000). You can also print
individual orders with any statuses by using the Purchase Orders form (PO301000) or the Purchase
Order report (PO641000; Distribution > Purchase Orders > Reports > Forms). If printing is not required
for a purchase order, the Pending Printing status is skipped and the order is moved to the next status.
After the purchase order has been printed, the order is assigned the Pending Email status if that status
is applicable. Purchase orders with the Pending Email status can be emailed in bulk by processing the
orders on the Print/Email Purchase Orders form (PO503000). You can also email individual orders with
any statuses by using the Purchase Orders form (PO301000). If sending by email is not required for a
purchase order, the Pending Email status is skipped and the order is moved to the next status. Sending
documents by email is outside of the scope of this course.
After the sending by email, the order gets the Open status, and now you can process purchase receipts
by the order (4).
Upon receiving the goods to the warehouse (5), a receiving clerk verifies goods and enters the purchase
receipt (6) by using the Purchase Receipts form (PO302000). Each line of a purchase receipt is linked
to the line of the purchase order by which the goods are received. The Receipt Qty of the purchase
receipt line is added to the Qty. on Receipts of the order line, and the Amount of the purchase
receipt line is added to the Received Amt. of the order line. Purchase receipts can also be entered for
a certain order by selecting the Enter PO Receipt action on the Purchase Orders form (PO301000). In
this case, the information from the purchase order is copied to the purchase receipt, which simplifies
data entry.
After the data entry is complete, you release the purchase receipt (7). You can mass-release purchase
receipts by using the Release Purchase Receipts form (PO501000). The purchase receipt gets the
Released status, and the system generates the inventory receipt, which you can view on the Receipts
form (IN301000) in the Inventory module. The inventory receipt is saved with the Balanced status
or immediately released if the Release IN Documents Automatically check box is selected on
the Purchase Orders Preferences form (PO101000). If the received quantity in the purchase receipt
completes the purchase order line, the Completed check box gets selected in the purchase order. The
purchase order is assigned the Closed status once all lines are completed. On release of the inventory
receipt (8), the system adds the goods to the inventory on hand and generates the GL transactions to
the inventory account.
After the purchase receipt is released, you can process the accounts payable bill for the received goods.
You can enter the bill (9) by using the Bills and Adjustments form (AP301000) or make the system
generate the bill on release of the purchase receipt. You have to release the bill (10) to make the
system generate the GL transactions to the accounts payable account. Once created on release of
the purchase receipt, the bill is immediately released if the Release AP Documents Automatically
check box is selected on the Purchase Orders Preferences form (PO101000). After the bill is released,
the purchase order process is complete. The payable amount is recorded to the vendor balance in the
system, and the GL transactions are posted.
Later in this course, you will process sample orders with different line types, Goods for IN, Non-
Stock, and Service, and see the process flow and the GL transactions generated in each case. For
the summary of general ledger transactions that are processed for different purchase order lines, see
Figure: The processing steps for a normal purchase order with a Goods for IN line
| Step 10.1: Creating a Purchase Order | 166
Step 10.1: Creating a Purchase Order

Create a purchase order of keyboards to the AcmeCo vendor as described below.
1. On the Purchase Orders form (PO301000), create a purchase order to AcmeCo:
Type: Normal
Vendor: AcmeCo (V000000005)
Date: 7/1/2014
Description: Purchase of computer keyboards
The order date is not validated with respect to a financial period. Unlike the transaction date in
the financial documents and inventory transactions that you have been processing so far, you
can specify any date to which you need to create the order.
2. Add a new line with the following information to the order:
UOM: LOT10
Order Qty: 5.00
When you add stock and non-stock items to purchase orders, you don't have to select Line
Type manually. After you specify Inventory ID in a line, the system automatically determines
the line type based on the item's settings. Thus, after you have selected the KEYBOARD stock
item in the purchase order line, the system has determined the corresponding line type Goods
for IN, which is used for processing goods purchased to inventory.
The unit cost of $150 has been suggested by the AcmeCo vendor price list, which specifies the
$150 price per LOT10 unit of the KEYBOARD item. The extended cost of the line is calculated as
$150 * 5 = $750.
Qty. On Receipts and Received Amt. of the line show the quantity and the cost of goods
that have been processed through purchase receipts linked to this order. Because you haven't
processed any receipts by the order yet, the quantity and the amount is zero at the moment.
The open quantity of the order line, which is classified by allocation types on the Inventory
Allocation Details form (IN402000), is calculated as Order Qty minus Qty. On Receipts.
Currently, the open quantity of the line equals 5 LOT10 units, or 50 PC units in the base unit of
measure according to the conversion that you have defined for the item.
Amount of the line equals Ext. Cost after the discount that might be applied to the line. The
use of discounts is outside of the scope of this course. For more information on discounts,
see references in Additional Information. Line Total that is displayed in the purchase order
summary information equals the total in the Amount column on the Document Details
tab. Order Total equals the Line Total plus Tax Total in the purchase order summary. (Tax
processing is outside of the scope of this course. For more information, see references in
Additional Information.)
3. Save the order and make sure the order looks as shown on the screenshot below.
The order has been assigned the reference number by the POORDER sequence specified in
the Regular Order Numbering Sequence box on the Purchase Orders Preferences form
(PO101000). You are using the default sequence in this course.
Figure: Normal purchase order with a Goods for IN line
If the user login is linked to an employee account in the system, the employee ID is inserted as the
Owner of the purchase order. In the data preconfigured for this course, the admin account is linked
to the ADMIN employee in the system, therefore the ADMIN employee reference is inserted into the
purchase orders that you create under the admin user account. Owner is a person responsible for
the document in the system. You can configure user access rights so that employees have access
to only their own documents. On the Print/Email Purchase Orders form (PO503000), the documents
for processing can be filtered by owner or by the workgroup to which the owner belongs. Based on
certain employees or workgroups, you can configure an assignment map to assign an owner of a
document and approval maps for approval workflow of purchase orders. Workgroups are configured
on the Company Tree form (EP204060). The configuration and use of organizational structure and
workflows is outside of the scope of this course. For more information, see references in Additional
Information.
4. On the Inventory Allocation Details form (IN402000), select KEYBOARD and notice that the
quantity Purchase Prepared is equal to 50 PC, as the screenshot below shows. All quantities
are presented in the base units of measure on this form.
For purchase orders on hold, the open quantity of the order lines is classified to the PO Prepared
allocation type, which is included in the Purchase Prepared subtotal displayed in the table. The
cleared check box next to the subtotal means that the Purchase Prepared quantity doesn't
affect the available quantity of the KEYBOARD item according to the settings of the item class to
which the item is assigned.
Figure: The quantity on the purchase order on hold is classified to PO Prepared
5. Double-click the order line in the table to go back to the Purchase Orders form (PO301000).
Related Links
Purchase Order Processing Options

Purchase Orders (PO301000)
| Step 10.2: Printing a Purchase Order | 169
Step 10.2: Printing a Purchase Order

To simplify the processing steps of purchase orders in this course, you have configured the AcmeCo
vendor account so that printing and emailing purchase orders is not required for that vendor. The
purchase orders that you will create to the AcmeCo vendor will get the Open status immediately after
you clear the Hold check box for the order and the Pending Approval, Pending Printing, and Pending
Email statuses will be skipped.
The Pending Approval status is skipped because the approval workflow is not configured for purchase
orders (approval workflows are outside of the scope of the training course).
The Pending Printing status is skipped because you have cleared the Print Orders check box for the
vendor on the Vendors form (AP303000), and every new purchase order gets the Don't Print check
box selected by default on the Other Information tab. If the Don't Print check box is selected for
a purchase order, the Pending Printing status is skipped for the order, and the order is excluded from
mass-printing that can be scheduled on the Print/Email Purchase Orders form (PO503000). Regardless
of the Pending Printing status, you can print individual purchase orders with any statuses by using
the Purchase Orders form (PO301000) or Purchase Order report (PO641000; Distribution > Purchase
Orders > Reports > Forms).
In a similar way, the Pending Email status is skipped because you have cleared the Send Orders by
Email check box for the vendor on the Vendors form (AP303000), and every new purchase order gets
the Don't Email check box on the Other Information tab. If the Don't Email check box is selected
for a purchase order, the Pending Email status is skipped for the order, and the order is excluded from
mass-email that can be scheduled on the Print/Email Purchase Orders form (PO503000). Regardless
of this setting, you can email purchase orders with the Pending Email and Open statuses by selecting
Actions > Email Purchase Order on the Purchase Orders form (PO301000). Configuring emails and
sending documents by email are outside of the scope of this course.
Print the order as described below:
1. On the Purchase Orders form (PO301000), select the order that you have just created.
The order retains the On Hold status, which is assigned to new purchase orders by default.
2. Select Reports > Print Purchase Order on the form toolbar.
The printed form of the purchase order appears (see the screenshot below). On the printed
form, PO Total equals the Line Total of the order, and Total (USD) equals the Order Total on
the Purchase Orders form (PO301000).
Figure: The printed form of the purchase order
3. On the Purchase Orders form (PO301000), clear the Hold check box for the order and save the
changes.
The order is assigned the Open status and becomes pending a receipt (see the screenshot
below).
Figure: Purchase order open and pending a receipt
The lines of open purchase orders cannot be edited. If you need to modify the order, you can put
the order on hold, edit the lines, and off hold the order. The processing starts from the beginning,
and the updated order has to be approved, printed, and emailed before it can be opened again.
4. On the Inventory Allocation Details form (IN402000), select the KEYBOARD item to analyze the
allocation type of the purchase order line once the order gets the Open status.
The open quantity of the purchase order line is classified to the PO Order allocation type and
summed up in the Purchase Orders subtotal. The open quantity of the purchase order line is
calculated as Order Qty minus Qty. On Receipts of the order line, which equals 50 PC - 0 PC =
50 PC units at the moment (see the screenshot below).
Figure: The quantity on the open purchase order is classified to the PO Order allocation type
Now you can process purchase receipts by the order.

Related Links
Purchase Order Processing Options
Purchase Order (PO641000)
| Step 10.3: Creating a Purchase Receipt | 172
Step 10.3: Creating a Purchase Receipt

Suppose that you have received the ordered goods few days later, on 7/3/2014. Create the purchase
receipt as descrbed below:
1. On the Purchase Receipts form (PO302000), specify the following information to enter a new
purchase receipt:
Type: Receipt
Vendor: AcmeCo
Date: 7/3/2014
The date of the purchase receipt must belong to an existing financial period, and the post period
of the purchase receipt must be an active financial period to which the transactions can be
posted in the system.
2. On the Document Details tab, click Add PO on the table toolbar.
The Add Purchase Order dialog appears (as the screenshot below shows). For the selected
vendor, the dialog shows the list of open purchase orders of the selected type.
3. Select the order in the list and click Add & Close to copy the order lines to the purchase receipt
and to close the dialog.
All open lines from the selected order have been copied to the purchase receipt (in this example,
the only line).
Figure: Selecting the purchase order by which the goods are received
Alternatively to selecting a purchase order by using the Add PO button as described above, you
could enter the purchase receipt for the open order by selecting Actions > Enter PO Receipt on
the toolbar of the Purchase Orders form (PO301000). The vendor information and the lines from the
purchase order would have been copied to the purchase receipt that would open on the Purchase
Receipts form (PO302000). To a purchase receipt on the Purchase Receipts form (PO302000), you
can also add particular lines of open purchase orders by using the Add PO Line button on the table
toolbar. You can enter one purchase receipt with lines from multiple purchase orders of the same
vendor at once.
4. Save the purchase receipt and review the information in the purchase receipt line.
The open quantity of the order line is inserted into the Receipt Qty of the purchase receipt line.
You can specify whether the open quantity of the order line or zero quantity should be inserted
by default into the purchase receipt line by selecting the needed option in the Default Receipt
Quantity setting on the Purchase Orders Preferences form (PO101000).
Suppose that you have received the order in full at the unit cost that matches the order, and you
don't have to change anything in the purchase receipt. Because the Receipt Qty quantity equals
the Ordered Qty, the line gets the Complete PO Line check box selected (see the screenshot
below). This flag makes the purchase order line completed on release of the purchase receipt.
The Open Qty shows the difference between the Ordered Qty copied from the order line and
the Receipt Qty. You are receiving the order in full, and Open Qty is zero (5 LOT10 units - 5
LOT10 units = 0).
For the receipt of goods you will process the GL transaction to the inventory account and the
purchase accrual account. The purchase accrual account that will be used for the transaction
is specified in the Accrual Account box of the purchase receipt line. The 213000 - Accrued
Purchases - Inventory account, which is inserted into the Accrual Account box, has been
retrieved from the posting class. The account has been retrieved at the moment of the purchase
receipt line entry.
On saving, the purchase receipt has been assigned the reference number by the PORECEIPT
sequence specified in the Receipt Numbering Sequence box on the Purchase Orders
Preferences form (PO101000). You are using the default sequence in this course.
Figure: The complete purchase receipt by the order
If you process a purchase receipt by the order, you cannot specify Receipt Qty greater or lower
than accepted for receipt according to the conditions of the order line. However, you can process
purchase receipts that are not linked to any purchase order. In this case, you can specify any
quantity in the Receipt Qty box that you receive. For more information on receipt acceptance
conditions, see Additional Information.
5. In the purchase receipt line, click the link to open the purchase order on the Purchase Orders
form (PO301000).
The quantity of the purchase receipt has been added to the Qty. On Receipts of the order line,
which now equals 5 LOT10 units.
6. Review the Receipts tab.
On the Receipts tab, you can see the list of all purchase receipts entered for the order. You have
entered one purchase receipt by the order, which is displayed in the table (see the screenshot
below).
Figure: The list of purchase receipt entered by the order
7. On the Inventory Summary form (IN401000), select the KEYBOARD item to analyze the
allocation type of the quantity on the purchase receipt on hold.
The quantity on the purchase receipt on hold is classified to the PO Receipt allocation type and
included in the PO Receipts subtotal (see the screenshot below). The receipt quantity on hold
has been subtracted from Purchase Orders, which now equals zero.
Figure: The quantity on the purchase receipt on hold is included in PO Receipts
Related Links
Purchase Receipt Processing Options
Purchase Receipts (PO302000)
Inventory Summary (IN401000)
| Step 10.4: Releasing a Purchase Receipt | 175
Step 10.4: Releasing a Purchase Receipt

Release the purchase receipt and process the inventory transaction as described below:
1. On the Purchase Receipts form (PO302000), select the purchase receipt, clear the Hold check
box, and save the changes.
The purchase receipt gets the Balanced status and becomes ready for release. The quantity on
the balanced purchase receipt is also classified to the PO Receipt allocation type and included in
the PO Receipts subtotal, which you can see on the Inventory Summary form (IN401000).
2. Release the purchase receipt by clicking Release on the form toolbar.
On release of every purchase receipt, the system performs the following operations:
Generates the inventory receipt from the purchase receipt. The inventory transaction is
recorded in the same unit of measure as the purchase receipt has. If the Release IN
Documents Automatically check box is selected on the Purchase Order Preferences form
(PO101000), the system immediately releases the inventory receipt.
Updates the status of the purchase order line. If the Complete PO Line check box is
selected in the purchase receipt line, the system sets the Completed check box in the
purchase order line. After all lines have the Completed check box selected, the purchase
order gets the Closed status.
Creates the AP bill if the Create Bill check box was selected for the purchase receipt on
the Purchase Receipts form (PO302000).
3. As soon as the process is complete, select Inquiries > View IN Document to view the
inventory receipt generated from the purchase receipt (see the screenshot below).
The inventory receipt has been immediately released because the Release IN Documents
Automatically check box is selected on the Purchase Order Preferences form (PO101000).
Otherwise, the inventory receipt would have been generated with the Balanced status. The
inventory receipt must be released to update the on-hand quantity and cost of inventory with
the received goods.
Figure: Inventory receipt generated on release of the purchase receipt
4. On the Inventory Allocation Details form (IN402000), select the KEYBOARD item.
On release of the inventory receipt, the receipt quantity has been added to inventory on hand.
All purchasing documents and inventory transactions with the item have been processed to the
end, and the table is empty. There are no lines to be classified by allocation types.
| Step 10.4: Releasing a Purchase Receipt | 176
5. In the Inventory Valuation detail report (IN615500) for the KEYBOARD item, you can see that
50 PC units have been received to inventory, and the on-hand quantity of KEYBOARD item now
equals 57 PC units, as the screenshot below shows.
Figure: Inventory on hand updated with the receipt
6. In the report, click the reference number of the inventory receipt to navigate to the Receipts
form (IN301000).
7. On the Financial Details tab, click the batch number and review the batch of GL transactions
that have been posted on release of the inventory receipt.
On release of the inventory receipt, the system has recorded the transaction to the inventory
account in the Inventory module, and posted the general ledger transaction in the General
Ledger module. In the general ledger transaction, the receipt amount is debited to the inventory
account and credited to the purchase accrual account that was specified in the purchase receipt
line:
130000 - Merchandise Inventory Dr, $750
213000 - Accrued Purchases - Inventory Cr, $750
Now you can process the account payable bill for the receipt.
Related Links
Purchase Receipt Processing Options
| Step 10.5: Processing the AP Bill for the Receipt | 177
Step 10.5: Processing the AP Bill for the Receipt

After you have released the purchase receipt, you can process the accounts payable bill and select
the purchase receipt lines in the bill. Suppose that you have received the bill along with the goods on
7/3/2014. Complete the following instructions to enter and process the bill in the system:
1. On the Bills and Adjustments form (AP301000), specify the following information to enter a new
bill:
Type: Bill
Vendor: AcmeCo
Date: 7/3/2014
Description: Order of keyboards
2. On the Document Details tab, click Add PO Receipt on the table toolbar.
The Add PO Receipt dialog appears (as the screenshot below shows). For the selected vendor,
the dialog shows the list of released purchase receipts with unbilled lines.
3. Select the purchase receipt in the table and click Add and Close to copy the lines of the
purchase receipt to the bill and to close the dialog.
All unbilled lines of the purchase receipt have been copied to the bill (in this example, only one
line).
Figure: Selecting the purchase receipt in the bill
Alternative to selecting a purchase receipt by using the Add PO Receipt button as described
above, you could:
Enter the bill by selecting Actions > Enter AP Bill on the toolbar of the Purchase Receipts
form (PO302000).
Add particular lines of released purchase receipts by using the Add PO Receipt Line button
on the table toolbar of the Bills and Adjustments form (AP301000). To a single AP bill, you
can add lines from multiple purchase receipts.
Select the Create Bill check box during the data entry on the Purchase Receipts form
(PO302000) to make the system create the AP bill automatically on release of the purchase
receipt (you will see an example later in this course).
4. Review the information in the document line.

| Step 10.5: Processing the AP Bill for the Receipt | 178
Line quantity, unit of measure, line amount, and the purchase accrual account are copied from
the purchase receipt line to the bill, and the links to the purchase order and purchase receipt are
inserted into the line (see the screenshot below).
You can process partial bills. You are able to select a receipt line of Goods for IN or Non-Stock
type in a bill until the line quantity is fully billedthat is, the total receipt quantity of the line is
selected in AP bills and the bills are released. You cannot select a receipt line twice in the same
bill (split the receipt line in the bill). A receipt line can be selected in only one unreleased bill at a
time; after the bill is released, you can select the line again if it is not yet billed in full.
There might be a difference between the accrued cost in the purchase receipt and the actual cost
in the bill. You can configure the processing of purchase price variances to the needed account,
which is outside of the scope of this course. See Additional Information for further references.
5. Save the bill.

The bill is created with the Balanced status according to the settings that you have specified on
the Accounts Payable Preferences form (AP101000) and ready for release.
Figure: The bill to be paid for the purchase receipt
6. Make sure the bill's balance is $750 and release the document.
7. After the process is complete, review the batch of GL transactions that have been generated.
The system produces the transactions to the accounts payable account of the vendor and the
purchase accrual account that was specified in the document line:
213000 - Accrued Purchases - Inventory Dr, $750
200000 - Accounts Payable Cr, $750
The purchase order process is complete. The received goods have been recorded to inventory on hand
in the Inventory module, the payable amount has been recorded to the vendor balance in the Accounts
Payable module, and the corresponding GL transactions were posted to the accounts in the General
Ledger module.
Related Links
Bill Processing
Bills and Adjustments (AP301000)
| Step 10.6: Reviewing the Linked Documents | 179
Step 10.6: Reviewing the Linked Documents

After you have processed the documents, review the links between the purchase receipts and AP bills
and between the purchase orders and purchase receipts as follows:
1. Open the purchase receipt on the Purchase Receipts form (PO302000).
2. To view the list of accounts payable bills that have been processed for the receipt, select
Reports > View Purchase Receipts Billing History on the form toolbar.
The Purchase Receipt Billing Details report (PO632000; Distribution > Purchase Orders >
Reports > Audit) shows the lines of accounts payable bills that are linked to the receipt.
A number of AP bills can be processed for a single purchase receipt. For each line of the receipt,
the report shows the list of accounts payable bills with the amounts billed for the receipt line.
The report includes all created AP documents, including the bills with the On Hold and Balanced
statuses. As the screenshot below shows, for the receipt of five LOT10 units of the KEYBOARD
item, one bill has been processed on 7/3/2014; the bill is currently open in the system.
The report shows only receipt lines that have been selected in any bill. Thus, for the only receipt
line the Billed Qty calculated by the listed AP bills equals the Receipt Qty and all AP bills are
released, which means that this receipt line is billed in full and no longer available for selection in
new AP bills.
The Receipt Total footer shows the purchase receipt total by the listed lines, while the Total
footer shows the vendor total by the listed receipts. (Later in this course, you will see how to run
the report for a certain vendor.)
Figure: List of AP bills linked to the purchase receipt line
3. Open the purchase order on the Purchase Orders form (PO301000).

In the purchase order, you can see that the Completed check box is selected for the line. The
Completed check box for the purchase order line means that the order line has been completed
and the goods have been received in full. Because all lines of the purchase order are completed,
the order has the Closed status.
4. On the Receipts tab, review the list of purchase receipts.
The table on the Receipts tab shows the list of purchase receipts that have been created
and linked to the purchase order, including the purchase receipts with the On Hold status and
purchase returns.
Figure: Purchase receipts processed for the purchase order

| Step 10.6: Reviewing the Linked Documents | 180
5. To view the list of purchase receipts grouped by order line, select Reports > View Purchase
Order Receipts History on the form toolbar.
There could be multiple purchase receipts processed for one purchase order. For each line of the
purchase order, the Purchase Receipt History report (PO643000) displays the list of purchase
receipt lines that have been linked to the order line, including the purchase receipts with the On
Hold status and purchase returns.
Figure: Purchase receipts by purchase order line
More reports and inquiries are described later in this course.

Related Links
Purchase Receipt Billing Details (PO632000)
Purchase Receipt History (PO643000)
Purchase Order Approval
You can configure the approval steps that must take place during the purchase order process. For more
information, see Purchase Order Approvals in the Acumatica ERP User Guide.
Sending Purchase Orders by Email
You can configure the system for sending purchase orders to vendors by email. An email account must
be configured in the system for sending outgoing emails. For more information, see Email (Overview) in
the Acumatica ERP User Guide.
Receipt Acceptance Conditions
You can configure min and max quantity variances for acceptable purchase receipts and specify the
action that is performed if a purchase receipt falls outside the acceptable range. For more information,
see the Min. Receipt (%) and Max. Receipt (%) parameters in Purchase Order Processing Options in
the Acumatica ERP User Guide.
Discounts in Purchase Orders
You can maintain the list of discounts that are offered by vendors. For more information, see Types of
Vendor Discounts in the Acumatica ERP User Guide.
Purchase Price Variance
There might be a difference between the accrued cost in the purchase receipt and the actual price
in the bill that you receive from the vendor. This difference is called the purchase price variance in
the system. The system tracks the purchase price variance, and you can configure the processing
of variance amounts to the needed account. For more information, see Allocation of Purchase Price
Variance in the Acumatica ERP User Guide.
Taxes
You can configure the processing of tax amounts in the system for tax accounting and reporting. For
more information, see Taxes in the Acumatica ERP User Guide.
Multi-Currency Operations
You can process purchase orders, purchase receipts, AP bills, and payments to vendors in other than
base currency in the system. For more information, see Currency Management in the Acumatica ERP
User Guide.
Lesson Summary
You can configure approval workflow for purchase orders. Once an order is approved, it can be printed
and sent to the vendor. With standard functionality of the Distribution suite, you can create and process
normal purchase orders for goods and services as described in this course.
In this lesson, you learned to process a normal purchase order with a receipt of items to inventory.
Each line of a purchase order is processed individually and may follow a different process. If you select
a stock item in a purchase order line, the system automatically defines the Goods for IN line type;
you don't have to select the line type manually. Line type determines the process flow for the order
line. Goods for IN lines are processed through a purchase receipt and cannot be added directly from
purchase orders to AP bills. At first, you have to process a receipt of goods to inventory and then you
will be able to process the AP bill for the receipt.
The Purchase Orders module generates inventory transactions when the goods are received to
inventory, and may generate accounts payable documents. The system updates inventory on hand
when the inventory receipt is released in the Inventory module, and updates the vendor balance when
the bill for the received goods is released in the Accounts Payable module. These modules generate
the corresponding general ledger transactions; the Purchase Orders module doesn't generate the GL
transactions directly.
| Lesson 11: Partial Receipts, Order Amendments, and Purchase Returns | 183
Lesson 11: Partial Receipts, Order Amendments, and Purchase

Returns
In this lesson, you will continue to process purchase orders. You will learn to make amendments to
orders and process purchase returns.
Lesson Objectives
Enter a partial receipt by a purchase order
Modify an original order and process a receipt by the changed order
Process one AP bill for two purchase receipts
Review open purchase orders and unbilled purchase receipts
Process a purchase return

| Step 11.1: Processing a Partial Receipt | 184
Step 11.1: Processing a Partial Receipt

Suppose you negotiated with the AcmeCo vendor to accept partial receipts with a back order of the
remainder if the goods cannot be received in full at the moment.
Create a purchase order and process a partial receipt:
1. Create a new purchase order on the Purchase Orders form (PO301000):
Type: Normal
Date: 7/3/2014
Description: Purchase of supplementary devices
2. Upload the lines from the provided Excel file: PurchaseOrder_07032014.xlsx. During upload,
leave Common Settings and Columns as suggested by default.
After the upload is complete, the order lines should look as shown on the screenshot below. You
are going to order computer mouse, leather cases, and 16 headsets: one unit of LOT6 and one
unit of LOT10. You have uploaded only inventory IDs and quantities from the Excel file; the unit
costs have been automatically suggested by the vendor's price list.
3. Clear the Hold check box and save the order with the Open status.
Now you can process purchase receipts by the order.
Figure: Purchase order for supplementary devices
4. Suppose that on 7/5/2014, you have received the first portion of goods and back ordered the
remainder. Create a partial receipt on the Purchase Receipts form (PO302000):
Type: Receipt
Date: 7/5/2014
Create Bill: Cleared
5. On the Document Details tab, click Add PO Line to select the purchase order lines by which
the goods have been received.
6. In the dialog that appears, select the lines that have been received, which are listed below, and
click Add & Close.
HEADSET (LOT6)
MOUSE
LEATHCASE
7. After the lines have been added to the Document Details tab, specify the received quantities of
the items in the Receipt Qty column:
HEADSET, 1 unit LOT6
MOUSE, 3 units LOT10
LEATHCASE, 3 units PC
8. Make sure the purchase receipt looks as the following screenshot shows, clear the Hold check
box and release the receipt.
For the first line with one LOT6 unit of the HEADSET item, the Receipt Qty equals the Open
Qty, which means that the order line has been received in full. The Open Qty is retrieved for
the order line at the moment of the purchase receipt line entry, and refreshed in the receipt on
any change of the receipt quantity by the order in the system. If Receipt Qty equals Open Qty,
the receipt line automatically gets the Complete PO Line check box, as the screenshot below
shows. The other lines aren't received in full yet, therefore the check boxes are not selected for
them.
Figure: Partial purchase receipt by the order
9. After the process is complete, review the generated inventory receipt and make sure the
inventory transaction is released (to view the inventory receipt, you can use Inquiries > View
IN Document). The inventory receipt is shown on the screenshot below.
Figure: Inventory receipt generated from the purchase receipt
10. Go back to the purchase order. To navigate to the purchase order from the purchase receipt, you
can click the link in the PO Order Nbr column on the Document Details tab of the Purchase
Receipts form (PO302000).
Figure: Link to the purchase order from a purchase receipt line
11. On the Purchase Orders form (PO301000), review the list of purchase receipts created for the
order in the system by selecting Reports > View Purchase Order Receipts History.
The report shows purchase receipts with any statuses. For each Goods for IN and Non-Stock
line of the order, the report shows the list of purchase receipt lines with the received quantities.
Thus, for the order line with the MOUSE item, one purchase receipt of 3 units of 5 ordered ones
has been released in the system (see the screenshot below).
For Service lines of the order, the report shows AP bills created for these order lines.
The Doc. Nbr. column shows the reference number of the document of the specified Doc. Type,
which could be a purchase receipt, return, AP bill, or debit adjustment.
Figure: Purchase receipts by the order
Now proceed to the next example.

Related Links
Receipts (IN301000)
| Step 11.2: Correcting the Original Order | 187
Step 11.2: Correcting the Original Order

In this step, you will continue to work with the purchase order by which you have already received a
part of the goods and processed the receipt. The order remains open in the system.
Suppose that you negotiated to purchase more goods from AcmeCo and agreed to make changes in
the original purchase order (alternatively, you could have agreed on a new purchase order). Review the
open quantities on the purchase order that you submitted to the AcmeCo vendor and make changes to
the order:
1. Review the open quantity on the purchase order.
2. Modify the order according to the new agreement with the AcmeCo vendor.
3. Process the purchase receipt for the remainder of goods by the order.
4. Process a single bill for the purchase order, which has been received in two portions with the
corresponding purchase receipts processed in the system.
5. Make sure there are no open purchase orders and all purchase receipts have been billed in full.
6. Review the inventory transactions generated from the purchase receipts to make sure the
received quantities are recorded to inventory on hand.
1. Review the Open Quantities on the Purchase Order

Run the Purchase Order Details by Vendor report (PO611000; Distribution > Purchase Orders > Reports
> Audit) with the following parameters:
End Date: Current date
Include Unreleased Receipts: Selected
The report shows open quantities of inventory items on all purchase orders in the system. The open
quantities are calculated at the moment of running the report. If the Include Unreleased Receipts
check box is cleared, the quantities on not yet released purchase receipts do not reduce the open
quantities of the orders that are printed in the report.
You have open orders to the AcmeCo vendor. The report shows that you have ordered 5 leather cases;
two of them haven't been received from the vendor yet and constitute the Open Qty of the order line
Line Total is the amount of the order line, which is displayed in the Amount column on the
Document Details tab of the Purchase Orders form (PO301000). Open Amount in the report
equals the Line Total amount minus the received amount of the order line, which is displayed in the
Received Amt column on the Document Details tab of the Purchase Orders form (PO301000).
Thus, for the LEATHCASE item, the open amount equals $180 calculated as follows: $450 amount of the
order line minus the $270 received amount of the line, which you can view on the Purchase Orders form
(PO301000).
Figure: Open quantity and amount on purchase orders

Do not close the report.
2. Modify the Order

Suppose that you have negotiated to purchase 10 leather cases instead of 5 at the same price of $90/
unit and you need to modify the purchase order:
1. In the Purchase Order Details by Vendor report (PO611000), click the purchase order link to
open the order on the Purchase Orders form (PO301000).
If all purchase receipts that have been created from the order are released, you can put the
order on hold and make changes to the order lines.
2. Select the Hold check box for the order, and for the LEATHCASE line, set Order Qty to 10.
3. Clear the Hold check box back and save the order.
After you off hold the order, the process starts from the beginning, and the updated order has to
be approved, printed, and emailed (if these steps are required) before it can be open again.
4. Review the open quantities on purchase orders by running the Purchase Order Details by
Vendor report (PO611000; Distribution > Purchase Orders > Reports > Audit) with the following
parameters (or you can click Refresh button in the report if it's already open):
Start Date:7/1/2014
Now the report shows the open quantity of LEATHCASE item of 7 units, calculated as 10 ordered
- 3 received = 7 open (see the screenshot below). The open amount of the line equals $630
calculated as the $900 amount of the line minus the $270 received amount of the line.
Figure: Updated open quantity and amount on the purchase order
3. Process the Receipt for the Remainder of Goods by the Order

On 7/7/2014, you have received the remaining goods by the purchase order and you have also received
the AP bill for the entire order. Complete the following instructions to process the receipt and the AP bill
in the system:
1. On the Purchase Orders form (PO301000), select the open order and select Actions > Enter PO
Receipt on the form toolbar.
The purchase receipt has been created and the lines with the open quantities from the order
have been automatically copied to the receipt (see the screenshot below).
2. On the Purchase Receipts form (PO302000), specify the following information in the receipt:
Date: 7/7/2014

Create Bill: Selected
3. Review the quantities and make sure the purchase receipt looks as shown on the screenshot
below.
Figure: The second purchase receipt by the order
4. Release the purchase receipt.

On release of the purchase receipt, the system generates the inventory receipt, and, because
you have selected the Create Bill check box, the system also creates the AP bill with lines
copied from the purchase receipt.
If you create the AP bill from a purchase receipt, you have to specify Vendor Ref. that is then
inserted into the bill, if the vendor reference is required for AP bills according to the Require
Vendor Reference setting on the Accounts Payable Preferences form (AP101000), otherwise
the bill won't be saved because not all required information is specified. The vendor reference
number must also be unique in AP bills if the Raise an Error on Duplicate Vendor Reference
Number check box is selected on the Accounts Payable Preferences form (AP101000).
The default value for the Create Bill check box on the Purchase Receipts form (PO302000) is
taken from the Create Bill on Receipt Release setting on the Purchase Orders Preferences
form (PO101000). The Create Bill on Receipt Release check box is cleared at the moment,
and you don't have to select it in this course.
5. Click the link to the purchase order in one of the purchase receipt lines to open the order on the
Purchase Orders form (PO301000).
The order is closed now because all lines of the order have been received in full and got the
Completed check box selected in the line (see the screenshot below; unnecessary columns are
hidden).
Figure: Purchase order received in full
6. Review the list of purchase receipts that you have processed by the order by running the report
from the Reports > View Purchase Order Receipts History menu.
The report lists purchase receipt lines by order line. You can see that, for example, the
LEATHCASE item has been received in two portions of 3 and 7 units with the 000002 and 000003
purchase receipts processed in the system (see the screenshot below).
Figure: Purchase receipt lines by the order line
Do not close the report.
4. Process a Single Bill for Two Receipts

Add one more receipt to the already created bill and release the document:
1. In the Purchase Receipt History report (PO643000), click the link to the second receipt (000003)
to open the document on the Purchase Receipts form (PO302000).
2. On the toolbar of the Purchase Receipts form (PO302000), select Inquiries > View AP
Document to view the bill generated from the purchase receipt.
The bill was earlier created by the system on release of the purchase receipt because you
selected the Create Bill check box on the Purchase Receipts form (PO302000).
If you create the bill from a purchase receipt in that way, you can navigate to the bill by
using the Inquiries > View AP Document menu. If you release a purchase receipt without
creating the bill and then enter the document on the Bills and Adjustments form (AP301000),
the Inquiries > View AP Document menu is not available on the Purchase Receipts form
(PO302000). Regardless from the way you create AP bills, you can always see all AP documents
created for a purchase receipt by using the Reports > View Purchase Receipts Billing
History on the toolbar of the Purchase Receipts form (PO302000).
The bill opens on the Bills and Adjustments form (AP301000) as the screenshot below shows.
The document contains lines from the purchase receipt from which the bill was generated; these
are the lines of one of the purchase receipts that you have processed by the order. The bill
has been created and saved with the Balanced status because the Release AP Documents
Automatically check box is cleared on the Purchase Orders Preferences form (PO101000).
Figure: Bill generated from the 000003 purchase receipt
3. Because you need to process a single bill for the entire order, add the lines of the other receipt
to the bill:
a. On the Bills and Adjustments form (AP301000), on the Document Details tab, click Add
PO Receipt.
b. Select the purchase receipt in the $696 unbilled balance and click Add and Close in the
dialog.
The system appends the unbilled lines to the list on the Document Details tab, as the
screenshot below shows.
Figure: The second purchase receipt added to the bill
4. Make sure the bill looks as shown on the screenshot above and release the bill.
5. On the Financial Details tab, find the batch number and make sure the GL transactions have
been generated and posted to the accounts.
6. On the Document Details tab, click the link to the purchase receipt that you added to the bill to
open the document on the Purchase Receipts form (PO302000).
7. On the Purchase Receipts form (PO302000), to review the bill that has been created for the
purchase receipt, select Reports > View Purchase Receipts Billing History on the form
toolbar.
The report shows the purchase receipt lines with the bill lines linked to them (see the screenshot
below).
Figure: AP bill processed for the purchase receipt
5. Review the Orders and Purchase Receipts

Make sure there are no open purchase orders and all purchase receipts have been billed in full:
1. Run the Purchase Order Details by Vendor report (PO611000) with the following parameters:
All purchase orders are closed, and the report must be empty.
2. Make sure there are no unbilled purchase receipts by running the Purchase Receipt Accrual
Summary report (PO630500) without any parameters specified.
The report shows unbilled quantities of purchase receipts grouped by accrual account specified in
the purchase receipt line. Unbilled quantity means that this quantity is not yet selected in any AP
bill.
The report must be empty.
6. Review the Inventory Transactions

The inventory transactions that have been generated from the purchase receipts are released, and the
goods are recorded to inventory on hand. Check the on-hand quantity, for example, of the MOUSE item.
On the Inventory Transaction History form (IN405000; Distribution > Inventory > Work Area >
Explore), select the following parameters to inquiry data:
Inventory ID: MOUSE
Include Unreleased: Cleared
The form shows inventory transactions that have been released with the item in the period from the
start date up to the most recently processed transaction. If you make both start and end dates empty,
the form will list all ever released inventory transactions for the item, which might take some time if
there are many transactions. Quantities are presented in the base unit of measure.
The form lists two inventory transactions with references to the purchase receipts. These transactions
have been generated from the Purchase Orders module, while the transactions without any reference
numbers to the originating documents were processed directly in the Inventory module. Reference
Nbr column shows the reference number of the inventory transaction, while the PO Receipt Nbr
column shows the reference number of the purchase receipt from which the inventory transaction was
generated.
With the receipt on 7/5/2014, you have received three LOT10 units, which was recorded as 30 PC units
added to inventory on hand. The second receipt added 20 more units, which results in 64 PC of the
MOUSE item on hand. Because End Date is not specified and the query includes the most recently
processed transactions, the Ending Qty column for the last transaction in the table shows the on-hand
quantity of MOUSE on hand, which is 64 pieces at the moment.
Figure: Inventory on hand after the receipts are processed
Related Links

Purchase Order Details by Vendor (PO611000)
Purchase Receipt Accrual Summary (PO630500)
| Step 11.3: Processing a Purchase Return | 195
Step 11.3: Processing a Purchase Return

In this step, you will process a return of goods to a vendor, which is called a "purchase return" in the
system.
To process a purchase return of stock items, you have to process two transactions:
Inventory issue. The unit cost at which the units are subtracted from inventory is retrieved at
the moment of the inventory issue release. Therefore, when you process a purchase return, the
units are issued at the unit cost according to the valuation method that applies to the item. For
example, one LOT6 unit of HEADSET is issued at the average unit cost at the moment, which
equals $120:
Inventory account Cr, $120
596000 - Purchase Returns Dr, $120
Debit adjustment. You have to process the debit adjustment with the account that has been
debited in the transaction above. For example, the headsets were returned by the bill where the
unit price of a LOT6 unit was $126:
596000 - Purchase Returns Cr, $126
Accounts Payable Dr, $126
According to this process, the cost variance, if any, is accumulated on the 596000 - Purchase Returns
expense account. Later, this difference can be reviewed and closed during a regular process of the
accounting period closing.
A return of non-stock items is not processed from the Purchase Orders module and can only be processed
as a transaction in the General Ledger module directly.
Suppose that on 7/8/2014, you negotiated a return of one LOT6 unit of headsets to the vendor, which
you received earlier by one of already closed orders. You haven't paid the bill for the order yet, and the
vendor will send you a credit memo. Perform the following instructions to process the return and adjust
the bill:
1. On the Purchase Receipts form (PO302000), create a purchase return with the following
information:
Type: Return
Vendor: AcmeCo
Date: 7/8/2014
2. On the Document Details tab, click Add PO Line and select the HEADSET LOT6 line in the
dialog as the screenshot below shows. Click Add & Close.
For purchase returns, the Add Purchase Order Line and Add Purchase Order dialogs show
lines of all open and closed orders that have a non-zero quantity in Qty on Receipts box (have
been ever fully or partially received).
Figure: Purchase order line selected to process a return
3. Make sure the line has been copied from the order to the purchase return as the screenshot
below shows. (The unnecessary columns are hidden.)
Receipt Qty is the quantity that will be returned. It has been copied from Qty on Receipts
of the order line; you can return quantity no greater than the Qty on Receipts quantity of the
order line. Unit Cost and Amount are also copied from the order line.
You can process purchase returns that are not linked to any purchase order. In this case, you can
specify any quantity in the Receipt Qty box that you return.
The PORETURN reason code has been automatically inserted into the line. This reason code
is taken from the PO Return Reason Code box on the Purchase Orders Preferences form
(PO101000). You have defined the PORETURN reason code and specified it in the module
configuration in one of the previous lessons. The reason code specifies the 596000 - Purchase
Returns account to be debited in the issue transaction.
You can change the reason code in the Reason Code box of the purchase return line, if needed.
(You don't have to do this in this course.)
4. In the line, clear the Open PO Line check box to leave the purchase order with the Closed
status after you release the return, and save the return.
Otherwise, the system would clear the Completed check box in the order line on the Purchase
Orders form (PO301000) and the order would become open on release of the purchase return.
Figure: Purchase return of the HEADSET item
5. On the Inventory Allocation Details form (IN402000), select the HEADSET item.
The lines of purchase returns are classified as PO Receipt allocation type. The quantity on
purchase returns doesn't affect the PO Receipts subtotal.
6. Double-click the line of the purchase return in the table to open the document on the Purchase
Receipts form (PO302000) and release the purchase return.
When you release a purchase return that is linked to a purchase order line, the return quantity
and amount are subtracted from the Qty On Receipts and Received Amt of the order line on
7. The system generates the inventory issue when you release a purchase return. To view the
inventory transaction, select Inquiries > View IN Document.
Review the inventory issue, make sure it has been released and the GL transactions have been
generated and posted to the accounts. Inventory issue uses the unit cost that is retrieved at
the moment of the inventory issue release according to the valuation method that applies to
the item. The unit cost at which the item is issued from inventory might differ from the unit
cost on the purchase receipt. In the example with the HEADSET item, the system has calculated
the extended cost of the issue as follows: 6 issued units * $426 total cost / 21 units on hand =
$121.71 rounded to two decimal places according to the decimal precision setting in the system.
8. In the purchase return line, click the purchase order link to open the order on the Purchase
Orders form (PO301000) and make sure the purchase order retains the Closed status.
9. Run the Purchase Receipt Accrual Details report (PO631000; Distribution > Purchase Orders >
Reports > Audit) for the 596000 - Purchase Returns account.
The report shows the amount of the unbilled purchase return in the account (-$126), which
differs from the GL transaction amount ($121.71), which you can view on the Account Details
form (GL404000; Finance > General Ledger > Work Area > Explore).
Now you have to process the debit adjustment.
Figure: Unbilled amount of the purchase return

Figure: The amount of the GL transaction
10. Open the purchase return on the Purchase Receipts form (PO302000) and select Actions >
Enter AP Bill.
The Bills and Adjustments form (AP301000) opens for creating a debit adjustment with data
populated from the purchase return. The return amount of $126 and the 596000 - Purchase
Returns account have been copied from the purchase return line (see the screenshot below).
In the debit adjustment, you have to leave the unit cost that matches the vendor's credit memo.
11. Specify the description Return of one LOT6 headset and release the debit adjustment.
Figure: The debit adjustment for the purchase return
12. To apply the adjustment to the bill, select Actions > Pay Bill/Apply Adjustment.
13. On the Check and Payments form (AP302000), specify application date 7/8/2014 and application
period 07-2014 and select the bill in the amount of $1726 on the Documents to Apply tab. You
have to select the bill that has been received for the headset that you return.
14. Release the application and review the vendor documents by selecting Inquiries > Vendor
Details.
You have two open bills from the AcmeCo vendor. In one of the bills, the original amount of
$1726 has been decreased by $126. You can see the closed debit adjustment if you select the
Show All Documents check box on the form, as the screenshot below shows.
Figure: The bill's balance reduced in the amount of the debit adjustment
If you run the Purchase Receipt Accrual Details report (PO631000) for account 596000 -
Purchase Returns, the report will show no more unbilled purchase returns in the account, and
will be empty.
15. On the Account Details form (GL404000), select the 07-2014 starting period and account
596000 - Purchase Returns. The account accumulated the cost difference of $4.29 between the
inventory issue and the debit adjustment that have been processed for the purchase return.
The form shows two transactions that have been processed within the selected period. The GL
transaction that has been generated from the inventory issue has debited the account in the
amount of $121.71, while the AP debit adjustment transaction has credited the account in the
amount of $126 according the item price in the purchase return. The difference of $4.29 is
reflected as the turnover in the account (see the screenshot below).
If the returned cost and debit adjustment amounts were equal, the turnover in the account
would be zero after the purchase return and debit adjustment transactions were processed.
Because the return items are issued from inventory at the unit cost according to the valuation
method that applies to an item, the issued cost might not be equal the amount of the debit
adjustment negotiated with the vendor. The difference is accumulated in the expense account to
which you record the returned costs.
This difference can be regularly reviewed and closed during the financial year closing. You can
use a dedicated expense account for this variance to simplify the audit of the accumulated
amount.
Figure: The cost difference accumulated in the expense account
Related Links
Return Processing
Purchase Receipt Accrual Details (PO631000)
Cash on Delivery Transactions
You can process purchase orders with a payment on delivery as described in Support for COD
Transactions in the Acumatica ERP User Guide.
Lesson Summary
You can process partial receipts and make changes to a purchase order even after it has been partially
received. To change the information in the order line, you have to select the Hold check box for the
order on the Purchase Orders form (PO301000) and save the order with the On Hold status. You can
modify the order while it is on hold. The processing of the modified order starts over so that the order
has to approved, printed, and emailed to the vendor again before it gets open in the system.
When you process a purchase return, the system generates the inventory issue transaction and the cost
of the returned goods is subtracted from inventory according to the valuation methods that apply to the
items. Reason code of the purchase return specifies the GL account to which the cost of the returned
goods is debited. We recommend that you use a dedicated expense account for purchase returns.
| Lesson 12: Purchase Orders With Non-Stock | 202
Lesson 12: Purchase Orders With Non-Stock

In this lesson, you will process purchase orders for services and non-inventory goods, which are
configured as non-stock items in the system. You will learn the processing of purchase orders with non-
stock items with and without a purchase receipt.
Lesson Objectives
Configure non-stock items for use in purchase orders
Process a purchase order for accrued expenses
Process a purchase order for direct expenses
Process a partial bill for a purchase order
Process a mixed purchase order of inventory and non-stock goods
Close the order by a partial receipt and cancel the remainder

| Services and Non-Stock | 203
Services and Non-Stock

Purchase order process can be used for approval of any purchases of services, stock, and non-stock
before the AP bills for the purchases are processed.
More information is provided in sections below:
Service Lines of Purchase Orders
Non-Stock Lines of Purchase Orders
Service Lines of Purchase Orders

You can process purchase orders with expenses that are copied from the orders directly to AP bills.
If you clear the Require Receipt check box for an item on the Non-Stock Items form (IN202000)
and select the item in a purchase order on the Purchase Orders form (PO301000), the line type is
automatically determined as Service in the purchase order, which means the line is not processed
through a purchase receipt and copied directly from the purchase order to the AP bill.
For Service lines, you can specify whether the order line is completed when the full amount or quantity
is billed. This condition is specified in the Complete PO Line box for the item on the Non-Stock Items
form (IN202000).
Posting class is optional for an item that doesn't require a receipt. If the posting class is not specified,
the expense account is retrieved to the purchase order line from the item settings on the Non-Stock
Items form (IN202000). If the posting class is specified, the expense account is retrieved according to
the Use COGS/Expense Account from setting of the posting class to which the item is assigned. On
release of the AP bill, the system produces the following GL transaction:
Expense account, Dr
Accounts payable account, Cr
Non-Stock Lines of Purchase Orders

If you want to process a mixed order of stock and non-stock, you can select the Require Receipt
check box for the non-stock items on the Non-Stock Items form (IN202000) and process the order so
that all order lines are copied from the order to the purchase receipt and further from the purchase
receipt to the AP bill. If the Require Receipt check box is selected for an item, the line type is
automatically determined as Non-Stock in the purchase order, which means the line is processed
through a purchase receipt.
For Non-Stock lines, you can specify whether the order line is completed when the full quantity
or amount is received and processed through a purchase receipt. This condition is specified in the
Complete PO Line box for the item on the Non-Stock Items form (IN202000). Regardless of the
Complete PO Line setting, the purchase receipt is billed in full when the full quantity of the purchase
receipt line is selected in AP bills, and the bills are released. A purchase price variance might take place
for non-stock items that are processed through a purchase receipt.
Posting class is required for an item that is processed through a purchase receipt. The received amount
is recorded to the purchase accrual account that is specified in the purchase receipt line. This account
is retrieved from settings according to the Use PO Accrual Account from setting of the posting class
to which the item is assigned. The expense account that is also inserted into the purchase order line
is retrieved from settings according to the Use COGS/Expense Account from setting of the posting
class. On release of the inventory receipt generated from the purchase receipt, the system produces the
following GL transaction:
Expense account, Dr
PO Accrual account, Cr
Later when you process the AP bill for the receipt, the receipt amount is moved to the AP account of the
vendor:
| Services and Non-Stock | 204
PO Accrual account, Dr
Accounts payable account, Cr

| Step 12.1: Processing an Expense Accrual with a Non-Stock Line | 205
Step 12.1: Processing an Expense Accrual with a Non-Stock

Line
You can process expense accruals by processing a purchase order with a non-stock item through a
purchase receipt.
On July 1, you order 80 hours of service work from the ServiceCo company; you will not receive the
bill from the vendor until August. So, you are going to process an accrual transaction in July and later
process the bill for the actual hours of service to be paid.
Complete the instructions below to process the accrual transaction for service work. This example also
demonstrates how you can close an order upon the processing of a partial receipt and canceling the
remainder by the order.
1. Configure the vendor account to simplify the processing steps for purchase orders.
2. Configure the non-stock item to process service work expense accruals.
3. Create a purchase order for service work.
4. Enter the purchase receipt to accrue the service expense for July.
5. Enter the AP bill received from the vendor to be paid for actual work performed in July.
1. Configure the Vendor Account

Configure the ServiceCo vendor account as follows:
1. On the Vendors form (AP303000), select the ServiceCo vendor.
boxes and save the changes.
In this course, you simplify the processing of purchase orders by making the printing and sending
orders by email not required for vendor accounts. In a production system, these steps may be required
as well as the preliminary approval may be. For example, you can configure an approval workflow
so that a chief accountant has to approve expenses (purchase orders) before the accrual and actual
transactions are recorded (that is, the purchase receipt and the AP bill are processed). Approval
workflows are outside of the scope of this course, see Additional Information for further references.
2. Configure the Non-Stock Item to Process Accruals

Configure the DIAGNOSTIC non-stock item for processing purchase receipts with the item:
1. On the Non-Stock Items form (IN202000), select the DIAGNOSTIC item and make sure the
Require Receipt check box is selected on the General Settings tab (see the screenshot
below).
For simplicity of the process, you will use the single item to accrue the service work expenses
and process bills.
Figure: Non-stock item configured for processing through a purchase receipt
2. The ServiceCo company takes $30/hour for any computer services. On the Price/Cost
Information tab, set Pending Cost to 30.00, Pending Cost Date to 7/1/2014, and select
Actions > Update Cost on the form toolbar.
Current Cost has been set to $30. This unit cost will be suggested for the DIAGNOSTIC item in
purchase orders, purchase receipts, and AP bills unless a vendor-specific price is defined for the
item on the Vendor Prices form (AP202000).
3. Create the Purchase Order

Process the purchase order with 80 hours of service work planned for July 2014:
1. On the Purchase Orders form (PO301000), create a purchase order to ServiceCo and select the
DIAGNOSTIC item in the order line:
Type: Normal
Vendor: ServiceCo
Date: 7/1/2014
Description: Service work order for July 2014
Document Details tab, Inventory ID: DIAGNOSTIC
Document Details tab, UOM: HOUR
Document Details tab, Order Qty: 80.00
The line is automatically assigned the Non-Stock type, which means that you have selected a
non-stock item that requires a receipt. You don't have to change the line type.
For Non-Stock lines, the Account box displays the expense account, which is then copied to the
Account box of the purchase receipt line. The 550000 - Computer Services Expense account has
been retrieved from the posting class to which the item is assigned.
2. Save the order with the Open status and make sure it looks as the screenshot below shows.
Figure: Purchase order with a non-stock line to accrue expenses
4. Enter the Purchase Receipt

Suppose that by the end of July, you found that the vendor provided 72 hours of service over the
month. On 7/31/2014, process the receipt to accrue the amount to be paid for actual hours of work
performed in July:
1. On the Purchase Orders form (PO301000), select the order and create the purchase receipt from
the order by selecting Actions > Enter PO Receipt on the form toolbar.
2. On the Purchase Receipts form (PO302000), in the new purchase receipt that opens, specify the
following information and save changes:
Date: 7/31/2014
3. In the purchase receipt line:
a. In the Receipt Qty box, specify the actual work hours, 72.
b. Select the Complete PO Line check box to close the purchase order on release of the
purchase receipt.
Accrual Account has been retrieved from the posting class to which the item is assigned.
4. Make sure the purchase receipt looks as shown on the screenshot below and release the receipt.
Figure: Purchase receipt to accrue the expense
5. Select Inquiries > View IN Document to review the receipt entry (see the screenshot below).
The receipt entry has been generated in the Inventory module for further processing of the
general ledger transaction from the entry. Receipt entries with non-stock items never update
inventory. You won't see non-stock items in the Inventory Valuation report (IN615500) or
transactions in the accrued expense account on the Inventory Transactions by Account form
(IN403000).
Figure: Receipt entry with a non-stock item
6. Review the GL transaction that has been generated and posted on release of the receipt entry.
The batch contains the transaction to the expense account (Account of the purchase receipt
line) and expense accrual account (Accrual Account of the purchase receipt line):
550000 - Computer Services Expense Dr, $2160
230000 - Accrued Expenses Cr, $2160
7. Review the Purchase Receipt Accrual Details report (PO631000) for the 230000 - Accrued
Expense account.
The report shows the $2160 amount of the unbilled purchase receipt that you have just
processed.
Figure: Unbilled purchase receipt for expense accrual
8. On the Account Details form (GL404000) for period 07-2014, review the balance of the 230000 -
Accrued Expenses account.
There is one entry in the 230000 - Accrued Expenses account in the amount of $2160 (see the
screenshot below).
Figure: Expense accrual transaction in the GL account
5. Process the AP Bill

On August 5, you have received the bill from ServiceCo. The bill in the amount of $2160 specifies 72
hours of service work to be paid for July 2014. Process the bill as follows:
1. On the Bills and Adjustments form (AP301000), create the bill with the following information:
Type: Bill
Vendor: ServiceCo
Date: 8/5/2014
Description: Service work bill July 2014
2. Add the purchase receipt to the bill by using the Add PO Receipt dialog (on the Document
Details tab, click Add PO Receipt and select the receipt).
3. Make sure Quantity equals the quantity in the vendor's bill, 72 hours.
There might be a difference between the accrued cost in the purchase receipt and the actual cost
in the bill. You can configure the processing of purchase price variances to the needed account,
which is outside of the scope of this course. See Additional Information for further references.
4. Release the bill, and review the batch of GL transactions.

The amount of the bill has been recorded to the AP account:
200000 - Accounts Payable Cr, $2160
230000 - Accrued Expenses Dr, $2160
The full amount of the purchase receipt has been billed. Thus, if you run the Purchase Receipt
Accrual Details report (PO631000) for the 230000 - Accrued Expenses account, the report will be
empty.
5. On the Account Details form (GL404000), for periods from 07-2014 to 08-2014, review the
transactions and balance of the 230000 - Accrued Expenses account.
For 07-2014, the account's balance equals the total unbilled amount of purchase receipts
processed to the account, $2160. This is the accrued expense amount of service work for July.
For 08-2014, this amount has been moved to the AP account so that the accrual account balance
became zero (see the screenshot below).
Figure: Transactions in the accrued expenses account
If you run the Purchase Order Details by Vendor report (PO611000) for the period of time
starting from 7/1/2014, the report will show no open purchase orders that remain in the system.
The partially received order to ServiceCo (you have processed the receipt of 72 of 80 ordered
hours) was closed on release of the purchase receipt because the Complete PO Line check box
was selected in the receipt line.
Related Links
Vendors (AP303000)
| Step 12.2: Processing a Direct Expense with a Service Line | 211
Step 12.2: Processing a Direct Expense with a Service Line

You can process expenses through purchase orders without accrual through a purchase receipt.
Suppose that you order 100 advertising flyers from the AdvertisingCo vendor and you want to expense
these flyers without recording to inventory.
1. Configure the vendor account to simplify the processing steps for purchase orders.
2. Configure the non-stock item to process expenses from purchase orders to AP bills.
3. Create the purchase order for flyers.
4. Process the first bill by the order for the design of flyers.
5. Process the second bill by the order for the printing of flyers.
1. Configure the Vendor Account

Simplify the processing steps for orders to the AdvertisingCo vendor:
1. On the Vendors form (AP303000), select the AdvertisingCo vendor.
boxes and save the changes.
2. Configure the Non-Stock Item to Process Expenses

The non-stock item will help you to specify the proper expense account in the purchase order, which is
then copied to the AP bill. Complete the following instructions:
1. On the Non-Stock Items form (IN202000), select the ADVERT item.
2. On the General Settings tab, make sure the Require Receipt check box is cleared and
Complete PO Line is set to By Amount.
You will process purchases of this item as expenses. You have cleared the Require Receipt
check box to make the system copy the line with the item from the purchase order directly to
the AP bill that you will create from the purchase order.
You have set Complete PO Line to By Amount to make the system complete the purchase
order line as soon as the line amount is billed in full. Since you are processing an expense, the
line quantity is not important, and you want to complete the order line by amount.
Figure: Non-stock item configured for processing expenses from purchase orders to AP bills

1. On the Purchase Orders form (PO301000), create a purchase order to AdvertisingCo for the
flyers:
Type: Normal
Vendor: AdvertisingCo
Date: 9/1/2014
Description: Advertising flyers
2. On the Document Details tab, add one line and select the ADVERT item in the line.
Notice that Line Type has been automatically determined as Service, which means that you
have selected a non-stock item that doesn't require a purchase receipt according to the item
settings (this is not the item type; item type can be any, for example Non-Stock Item). Service
lines are copied from the purchase order directly to the AP bill and not processed through a
purchase receipt.
For Service lines, the system inserts the expense account into Account of the purchase order
line, which is then copied to the AP bill line. The 610000 - Advertising Expense account has been
retrieved from the item settings because the item is not assigned to any posting class.
Account is the non-stock item's expense account that is populated for Service and Non-Stock
lines. Account is always empty for Goods for IN lines in the purchase order.
3. In the Line Description box, specify Flyers 100 pcs, clear Unit Cost, and in the Ext. Cost
box specify 1000.
You have negotiated the $1000 total price of 100 flyers, which includes the design, materials,
and printing of the flyers. Extended cost is copied to the Amount box of the line.
Order Qty is optional in purchase order lines of Service type. In the ADVERT item, you have set
the Complete PO Line option to By Amount to make the order line complete by amountthat
is, the order line gets the Completed check box selected as soon as the line amount is selected
in a bill in full and the bill is released.
4. Clear the Hold check box and save the order with the Open status. (See the screenshot below).
Figure: Purchase order with a Service line
Now the order is open, and you can enter the bill for the Service line of the order. You could enter a
purchase receipt for the Goods for IN and Non-Stock lines if there were any in the order.
4. Process the First Bill by the Order

On 9/10/2014, you received the first bill from the AdvertisingCo vendor for the design of flyers in the
amount of $700. Process the bill as follows:
1. On the Purchase Orders form (PO301000), select the flyers order and select Actions > Enter
AP Bill.
2. In the bill, specify the following information:
Date: 9/10/2014
Description: Design of flyers
3. On the Document Details tab, in the Ext. Cost box, specify 700 and save the bill as the
Figure: The bill with expenses prepared directly from the purchase order
4. In the bill's line, click the link to the purchase order to open the order on the Purchase Orders
form (PO301000) and review Received Amt. of the order line with the ADVERT item.
For Service lines of a purchase order, Received Amt. displays the amount of the AP bills linked
to the purchase order line. You have entered the bill for this order, and the amount of the bill's
line is included in Received Amt that now equals $700. The order retains the Open status
because the bill hasn't been released yet and the bill amount is less than the purchase order
amount.
Figure: Amount of AP bills linked to the service line of the order
For Service lines of a purchase order, Qty. On Receipts is the quantity on AP bills for the line.
5. Run the Purchase Order Details by Account report (PO612000; Distribution > Purchase Orders >
Reports > Audit) with the following parameters to see the amount of order lines that hasn't been
selected in any bill yet:

The report shows the open amount and open quantity of Service lines and Non-Stock lines of
purchase orders grouped by Account of the purchase order line. The open amount equals the
order line amount minus the amount on released bills if the Include Unreleased Receipts
check box is cleared in the report parameters; the open quantity is consistent with the open
amount.
The report shows the open amount of $300 of the purchase order line, because you have
selected the Include Unreleased Receipts check box and the line amount of the balanced bill
where you selected the order line reduced the line amount of the order in the report, $1000 -
$700 = $300.
Figure: The open amount of Service lines of purchase orders
6. To see the list of bills created from the purchase order, click the link to the order in the report
and select Reports > View Purchase Order Receipts History on the Purchase Orders form
(PO301000) that opens.
For Service lines of purchase orders, the report shows the list of AP bill lines that have been
created linked to the order lines. As the screenshot below shows, the report presents the bill that
you have earlier created.
Figure: Bill created from the purchase order
7. In the report, click the bill reference to open the document on the Bills and Adjustments form
(AP301000) and release the bill.
5. Process the Second Bill by the Order

On 9/15/2014, you received the flyers and the second and final bill in the amount of $305 from the
AdvertisingCo for the materials and printing of the flyers. Process the second bill as follows:
1. On the Purchase Orders form (PO301000), select the flyers order and select Actions > Enter
AP Bill.
The system opens the Bills and Adjustments form (AP301000) for a new bill in the remainder
amount of the purchase order, $300.
2. In the bill, specify the following information:
Date: 9/15/2014

Description: Materials and printing of flyers
3. On the Document Details tab, in the Ext. Cost box specify 305, which is the amount of the
vendor's bill.
4. Make sure the bill looks as shown on the screenshot below and release the bill.
Figure: The second bill by the order
5. Click the link to open the order on the Purchase Orders form (PO301000) and make sure it is
closed.
The only order line has been completed by the By Amount condition that has been checked at
the moment of the bill release and the order has been closed (see the screenshot below). You
have specified the condition in the Complete PO Line setting of the ADVERT non-stock item
on the Non-Stock Items form (IN202000). By this condition, the order line has been completed
as soon as the Receipt Amt of released bills reached the Amount of the order line. In this
example, the billed amount was even greater than the order amount. The system doesn't track
the purchase price variance for Service lines of purchase orders because they aren't processed
through a receipt and no received cost is recorded. (Don't confuse the Service line type of a
purchase order with the Service item type on the Non-Stock Items form (IN202000). Item type
doesn't affect the processing of document lines with the item.)
Figure: Service line of the order completed as soon as the billed amount reached the order amount
6. Run the Purchase Order Details by Account report (PO612000; Distribution > Purchase Orders >
Reports > Audit) for the period of time starting from 9/1/2014.
The report is empty, which means there are no open Service lines of purchase orders for the
selected period of time.
7. To view the bills processed by the order, run the Purchase Receipt History report (PO643000;
Distribution > Purchase Orders > Reports > Audit) for the flyers order.
The report shows two AP bills that have been processed by the order (see the screenshot below).
The same report can be run from the Purchase Orders form (PO301000), by selecting Reports >
View Purchase Order Receipts History on the form toolbar.
Figure: AP bills processed by the order
Related Links
Purchase Order Details by Account (PO612000)
| Step 12.3: Processing a Mixed Order of Goods and Non-Stock | 218
Step 12.3: Processing a Mixed Order of Goods and Non-Stock

You can process purchase orders that contain mixed lines for ordering stock and non-stock goods in a
single purchase.
Suppose that along with computers and peripheral devices, the company offers Ethernet cables to
customers and sells about 10 cables a month. Along with other goods, cables are ordered from the
AcmeCo vendor and purchased at the price of $1 per cable. Upon the purchase receipt, the manager
verifies the quantity of cables; however, cables are not recorded to inventory because of the small cost.
The cost of purchased cables is processed directly to the cost of goods sold expense.
Perform the instructions below.
1. Configure the non-stock item for processing through a purchase receipt.
2. Process the purchase order of laptops and cables.
3. Process the receipt by the order.
4. Process the AP bill for the receipt.
1. Configure the Non-Stock Item

1. On the Non-Stock Items form (IN202000), create the CABLE item with the following information
as the screenshot below shows:
Inventory ID: CABLE
Description: 3FT Ethernet Cable RJ45
General Settings tab, Type: Non-Stock Item
General Settings tab, Posting Class: SUPPDEVICE
General Settings tab, Tax Category: EXEMPT
General Settings tab, Require Receipt: Selected
General Settings tab, Base Unit: PC
General Settings tab, Sales Unit: PC
General Settings tab, Purchase Unit: PC
To include the non-stock item in a purchase receipt and then create the AP bill for all goods at
once, you have to select the Require Receipt check box for the item on the Non-Stock Items
form (IN202000). Posting class is required for a non-stock item if you process the item through
a purchase receipt.
Because you are not going to track the item in inventory, you create the cable item as non-
stock and you will process the purchases of cables as expenses. The GL accounts for transactions
with the item will be retrieved from the SUPPDEVICE posting class, you will use the following
accounts for the item:
Expense Account: 530000 - Cost of Goods Sold
Sales Account: 432000 - Sales - Supplements

Figure: Non-stock item configured for processing through a purchase receipt
2. On the Vendor Prices form (AP202000; Finance > Accounts Payable > Work Area > Manage),
add the regular price per cable for the CABLE item offered by the AcmeCo vendor and save the
changes:
Inventory ID: CABLE
UOM: PC
Price: 1.00

Create the order of laptops and Ethernet cables to the AcmeCo vendor:
1. On the Purchase Orders form (PO301000), create an order with the following information:
Type: Normal
Date: 9/15/2014
Description: Laptops and cables
2. On the Document Details tab, add the lines with the following information:
Inventory ID: LAPTOP12, Order Qty: 5.00
Inventory ID: CABLE, Order Qty: 10.00
The line type with the CABLE item has been determined as Non-Stock because the item requires
a receipt. Order lines of the Non-Stock type cannot be added to an AP bill directly from the
purchase order and require processing through a purchase receipt.
3. Suppose that you have sent the order to the vendor. Clear the Hold check box and save the
order with the Open status (see the screenshot below).
Figure: Mixed order of goods for inventory and non-stock
Now you can process receipts by the order.
3. Process the Purchase Receipt

On 9/20/2014, you received the goods and the bill. Process the receipt:
1. On the Purchase Orders form (PO301000), select the order and select Actions > Enter PO
Receipt to enter the purchase receipt.
The Purchase Receipts form (PO302000) opens with the information populated from the
purchase order. Two lines have been copied to the receipt (see the screenshot below).
2. Specify the following information and release the receipt:
Date: 9/20/2014
On release of the receipt, the order gets closed because all lines of the order were completed.
Figure: Receipt of stock and non-stock by the order
3. Review the batch of GL transactions that have been generated and posted on release of the
inventory receipt.
For the Non-Stock line of the purchase receipt, on release of the inventory receipt, the system
generates the transaction to Account (expense account) and Accrual Account (purchase
accrual account) specified in the purchase receipt line:
530000 - Cost of Goods Sold Dr, $10

213000 - Accrued Purchases - Inventory Cr, $10
In the batch, the journal entries are summarized by the 213000 - Accrued Purchases - Inventory
account so that a single entry in the amount of $4850 (laptops) + $10 (cables) = $4860 has
been posted to the account, as the screenshot below shows.
Figure: GL transactions for the purchase receipt of stock and non-stock
If you run the Purchase Order Details by Vendor report (PO611000) for the period of time
starting from 9/1/2014, the report will show no more open orders in the system.
4. Process the AP Bill

Process the bill for the receipt and review the transactions:
1. On the Purchase Receipts form (PO302000), select the receipt and select Actions > Enter AP
Bill on the form toolbar.
The Bills and Adjustments form (AP301000) opens for entering a new bill with the information
copied from the purchase receipt.
2. In Description, specify Laptops and cables and release the bill.

If you run the Purchase Receipt Accrual Details report (PO631000) for the 213000 - Accrued
Purchases - Inventory account, the report will show no more unbilled purchase receipts in the
account.
3. On the Account Details form (GL404000), select the 09-2014 period and 213000 - Accrued
Purchases - Inventory account and make sure the account balance is zero. The bills have been
processed for all purchase receipts; the total accrued amount of purchase receipts has been
moved to the AP account and the account balance has been cleared (see the screenshot below).
Figure: Zero amount of accrued purchases in the account
Related Links
Vendor Prices (AP202000)

Purchase Order Approval
You can configure the approval steps that must take place during the purchase order process. For more
information, see Purchase Order Approvals in the Acumatica ERP User Guide.
Purchase Price Variance
There might be a difference between the accrued cost in the purchase receipt and the actual price
in the bill that you receive from the vendor. This difference is called the purchase price variance in
the system. The system tracks the purchase price variance, and you can configure the processing
of variance amounts to the needed account. For more information, see Allocation of Purchase Price
Variance in the Acumatica ERP User Guide.
Lesson Summary
You can process purchase orders with non-stock items as well as mixed orders of stock and non-stock.
For the processing of mixed orders, you can select the Require Receipt check box for non-stock items
on the Non-Stock Items form (IN202000) to make all lines of an order copy to the purchase receipt and
then from the purchase receipt to the AP bill.
To view the unbilled amount of Non-Stock lines of purchase receipts, you can use the Purchase Receipt
Accrual Details report (PO631000). Purchase price variance takes place for non-stock items processed
through a receipt in case the accrued cost differs from the amount in the vendor bill.
If the Require Receipt check box is cleared for an item on the Non-Stock Items form (IN202000),
the order line with this item is not processed through a purchase receipt and copied from the purchase
order directly to the AP bill. No purchase price variance takes place for non-stock items processed
without a receipt.
To view the unbilled amount of Service lines of purchase orders, you can use the following reports:
Purchase Order Details by Inventory Item (PO611500)
| Lesson 13: Reviewing the Purchasing Documents and Verifying Transactions | 225
Lesson 13: Reviewing the Purchasing Documents and Verifying

Transactions
In this lesson, you will review the documents and transactions that relate to purchasing.
Lesson Objectives
Review open purchase orders
Review orders by vendor (open, received, paid, vendor balance)
Review orders by inventory item (open, received)
Reconcile the purchase accrual account balance by unbilled purchase receipts in the Purchase
Orders module with the accrual account balance in the General Ledger module
Verify the received quantity of goods by comparing the quantity on released purchase receipts
in the Purchase Orders module with the quantity on released inventory receipts in the Inventory
module
| Step 13.1: Sampling Documents for Review in Reports | 226
Step 13.1: Sampling Documents for Review in Reports

Create the following documents to analyze how the information is presented in the reports described in
the examples of this lesson:
1. Copy-paste the order to AdvertisingCo from 9/1/2014 into a new order with the 9/20/2014 date.
Save the order with the Open status. To copy-paste a purchase order:
a. Select the needed order on the Purchase Orders form (PO301000).
b. Select Clipboard > Copy button on the form toolbar as the screenshot below shows.
Figure: Clipboard > Copy
c. Click Add. The form resets for creating a new order.

d. Select Clipboard > Paste button on the form toolbar.
2. Copy-paste the mixed order of laptops and cables to AcmeCo from 9/15/2014 into a new order
with the 9/20/2014 date. Save the order with the On Hold status.
3. Paste the same order into one more new order to AcmeCo and specify the 9/21/2014 date. Save
the order with the Open status. For the last order:
a. Enter and release a partial receipt with the same 9/21/2014 date:
LAPTOP12, 3 PC
CABLE, 5 PC
b. Create the AP bill for the receipt and save the bill with the Balanced status.
c. Enter the second purchase receipt with the 9/22/2014 date for the remainder of the
goods and save the receipt with the Balanced status.
After you have prepared sample documents, proceed to the next step of the lesson. You don't have
to process the documents to the end upon completion of this lesson; leave the documents and
transactions as is and continue with lessons from the last part of this course.
| Step 13.2: Reviewing the Orders and Receipts by Vendor | 227
Step 13.2: Reviewing the Orders and Receipts by Vendor

In this step, you will review the following documents:
1. Review all purchase orders that are in process at the moment by using the Purchase Order
Summary report (PO610500).
2. Make a template report to retrieve only open purchase orders to the Purchase Order Summary
report (PO610500). In a similar way, you can make template reports by other statuses of
purchase orders, and make, for example, a report of orders pending approval.
3. Review the details of open purchase orders by using the Purchase Order Details by Vendor report
(PO611000).
4. Review all purchase receipts by using the Purchase Receipt Summary report (PO620500).
5. Review the unbilled purchase receipts by using the Purchase Receipt Accrual Summary
(PO630500) and Purchase Receipt Accrual Details (PO631000) reports.
6. Review the unbilled Service lines of purchase orders by using the Purchase Order Details by
Vendor report (PO611000).
7. Review the AP bills created for purchase receipts by using the Purchase Receipt Billing Details
report (PO631000).
8. Review the AP bills created for Service lines and purchase receipts created for Goods for IN and
Non-Stock lines of an order by using the Purchase Receipt History report (PO643000).
9. Review the open AP documents and the vendor balance on the Vendor Details form (AP402000).
In the parameters of every report, you can additionally specify the vendor ID to filter documents by the
needed vendor. The detailed instructions are given below.
1. All Purchase Orders

To review the list of purchase orders that are at different stages of the process in the system, run the
Purchase Order Summary report (PO610500; Distribution > Purchase Orders > Reports > Audit) for the
period of time starting from 7/1/2014 (you started processing purchase orders from July 2014 in this
course).
The report shows purchase orders with statuses: Open, On Hold, Pending Printing, Pending Email,
Pending Approval. The orders are sorted by order type and order number in ascending order (see the
screenshot below).
Open Qty that is displayed in the report equals the total quantity in the Order Qty column minus the
total quantity in the Qty. on Receipts column on the Document Details tab of the purchase order on
Open Amount equals the total amount in the Amount column minus the total amount in the
Received Amt column on the Document Details tab of the purchase order on the Purchase Orders
form (PO301000).
Figure: Purchase orders at different stages of the process
2. Open Purchase Orders

Based on the Purchase Order Summary report (PO610500), you can make a report that shows only
open purchase orders. Complete the following instructions:
1. On the report form, select the Additional Sort and Filters tab (see the screenshot below).
2. In the Additional Filtering Conditions table, click Add(+) and specify the following condition
in the row:
Property: Purchase Order.Status
Condition: Equals
Value: Open
3. To make the template selected by default on every opening of the report form, select the
Default check box.
4. Click Save Template on the form toolbar and specify the template name: Open Purchase
Orders.
Now you can use this template when you run the Purchase Order Summary report (PO610500).
The template will be selected by default every time when you open the report form.
Figure: Filtering open orders in the report
The template has been saved for the current user only, other users do not see the report. For more
information on Report Designer reports, see references in Additional Information.
5. On the Report Parameters tab, make sure the start date is 7/1/2014 and click Run Report to
run the report with the Open Purchase Orders template.
The report shows only open purchase orders. The order that is on hold at the moment doesn't
show up in the report.
3. Details of Open Purchase Orders

To view the details of open purchase orders, run the Purchase Order Details by Vendor report
(PO611000) for the period of time starting from 9/1/2014.
The report shows open lines of purchase orders grouped by vendor. For each line, the report presents
the open quantity and the open amount of the line.
Open Balance that is displayed in the report is the total open amount of purchase orders by vendor
calculated by the Open Amount column of the report. The Total Open Balance is the total open
amount by all vendors in the report. This open amount is the amount of ordered but not yet received
goods and services, which is not related to the payable balance of the vendor that you can find on the
Vendor Details form (AP402000; Finance > Accounts Payable > Work Area > Explore).
Figure: Open lines of purchase orders grouped by vendor
4. All Purchase Receipts

To view all purchase receipts for a certain period of time, run the Purchase Receipt Summary report
(PO620500) for the period of time starting from 9/1/2014 (see the screenshot below).
The report shows the list of all existing purchase receipts and returns that may have the On Hold,
Balanced, or Released statuses. To view the details of these purchase receipts and returns, you can use
the Purchase Receipt Details by Vendor report (PO621000).
Figure: Purchase receipts by vendor
5. Unbilled Purchase Receipts

Review the unbilled purchase receipts as follows:
1. To view the unbilled purchase receipts, run the Purchase Receipt Accrual Summary report
(PO630500).
The report shows the list of purchase receipts with quantities that aren't selected in an AP bill
yet or the bill is not yet released; the receipt amounts are grouped by PO accrual account. The
receipt amount and unbilled amounts are presented in the base currency. Purchase returns for
which the debit adjustment hasn't yet been created or released are also listed in this report.
Receipt denotes a purchase receipt in the report, while Return denotes a purchase return.
The Purchase Receipt Accrual Summary report (PO630500) shows one receipt for which the AP
document hasn't been released yet (see the screenshot below).
Figure: Unbilled purchase receipts

2. To view the details of unbilled purchase receipts and returns, run the Purchase Receipt Accrual
Details report (PO631000).
The report shows two lines of the purchase receipt for which an AP bill hasn't been released yet,
as the screenshot below shows.
Figure: Unbilled lines of purchase receipts
6. Unbilled Purchase Order Lines

To view the unbilled amount of Service purchase order lines, run the Purchase Order Details by Vendor
report (PO611000) with the filter PO Line.Line Type=Service.
Create this filter and save as a report template in a similar way as it is described for the Open Purchase
Orders report template above. Without the filter the report shows the unbilled amount of Service lines
along with the not yet received Non-Stock and Goods for IN lines.
7. AP Bills by Purchase Receipt

To view the AP bill details by purchase receipt, run the Purchase Receipt Billing Details report
(PO632000) for the 09-2014 period with the Detailed check box selected in the report parameters.
The report shows the Receipt Amt and Billed Amt in the base currency. The report also shows debit
adjustments created for purchase returns.
For the second receipt, the report shows lines of the AP bill that has been created for the receipt but
hasn't been released yet (see the screenshot below).
Figure: Purchase receipt with linked AP bill lines
8. AP Bills and Purchase Receipts by Order

To view the purchase receipts and AP bills created by a purchase order, run the Purchase Receipt
History report (PO643000).
The report shows all purchase receipts and AP bills created by a purchase order. (AP bills are considered
as "receipts" of services and therefore printed in the report.) The documents are grouped by order and
order line. The amounts are presented in the document currency.
The list of documents for each order starts with a new page in the report. You can list the report pages
to view the documents by different purchase orders (see the screenshots below).
Figure: Purchase receipts by stock and non-stock lines of the order
Figure: AP bills by service line of the order
9. Open AP Documents by Vendor

To view the list of open AP documents for a selected vendor, you can use the Vendor Details form
(AP402000; Finance > Accounts Payable > Work Area > Explore).
Thus, the AcmeCo vendor balance by open AP documents is $7210 at the moment (see the screenshot
below).
Figure: Open AP documents by vendor

You can navigate to this form by selecting Inquiries > Vendor Details on the toolbar of the Purchase
Orders form (PO301000).
Related Links
Purchase Order Summary (PO610500)
Purchase Receipt Accrual Summary (PO630500)
Purchase Receipt Billing Details (PO632000)
| Step 13.3: Reviewing the Orders and Receipts by Inventory Item | 233
Step 13.3: Reviewing the Orders and Receipts by Inventory

Item
Review the reports by inventory item as follows:
1. To view the item quantities on open lines of purchase orders, run the Purchase Order Details by
Inventory Item report (PO611500) for the period of time starting from 9/1/2014.
The report shows open lines of purchase orders grouped by inventory item. The Order Qty
and Open Qty is presented in the unit of measure of the document line, the unit of measure is
displayed in the UOM column of the report.
The screenshot below shows the report retrieved with the Include Unreleased Receipts check
box selected in the report parameters. The quantity of the balanced receipt created by the last
order reduced the open quantity of the order line in the report to zero.
Figure: Item quantities on open purchase orders
2. To view the item quantities on purchase receipts, you can use the custom inquiry Purchase
Receipt Details by Inventory Item (Distribution > Purchase Orders > Reports > Audit). Select the
9/1/2014 start date on the form to view the transactions for the period of time starting from that
date up to the most recent moment.
The inquiry displays lines of purchase receipts, which can be additionally filtered by inventory
item. The list includes purchase receipts with the On Hold, Balanced, and Released statuses. The
report shows the purchase receipt that hasn't been released yet, and the inventory transaction
has not yet been generated from the receipt (see the screenshot below). More information on
the use of this inquiry is provided in the next step of this lesson.
Figure: Purchase receipt details by inventory item
Related Links
| Step 13.4: Verifying the Inventory Transactions | 234
Step 13.4: Verifying the Inventory Transactions

You can verify the inventory transactions that have been created from purchase receipts to make sure
all necessary transactions have been processed, and the on-hand quantities of inventory items have
been updated in the system.
Suppose that you want to verify the inventory transactions with the HEADSET item for the period of
time from 5/1/2014 (the date of the first inventory transaction with the item) up to the most recent
moment.
1. Review the purchase receipts and returns from which inventory transactions have been
generated. Run the Purchase Receipts Details by Inventory Item custom inquiry (Distribution >
Purchase Orders > Reports > Audit) with the following parameters:
End Date: empty
The inquiry displays the purchase receipt and return lines for the specified period if time. In
the PO Receipt Status column, you can see the purchase receipt status. In the Receipt UOM
and Receipt Qty columns, you can see the unit of measure and quantity of the receipt line. In
the Base UOM and Base Qty columns, you can see the base unit of measure of the item and
quantity that is recorded to on-hand for stock items. In the last three columns, you can find the
link to the inventory transaction that has been generated from the receipt (IN Tran. Nbr) and
see whether it has been released (IN Tran. Released).
With this inquiry, you can make sure the necessary purchase receipts have been released and
the inventory transactions have been generated and released.
Figure: Purchase receipts, returns, and the corresponding inventory transactions by item
This inquiry has been specially designed for this course. You can view and modify the inquiry
schema on the Generic Inquiry form (SM208000) by selecting Customization > Edit Generic
Inquiry on the form title bar. You can make your own inquiries and add them to the system.
Building inquiries is outside of the scope of this course. For more information, see references in
Additional Information.
2. Review the inventory transactions with the links to the purchase receipts and returns from which
they have been generated:
a. On the Inventory Transaction History form (IN405000; Distribution > Inventory > Work
Area > Explore), select the data by the following parameters:
End Date: empty
The form shows all inventory transactions that have been processed for the specified
period of time with the item. The transactions may originate from Inventory, Purchase
Orders, and Sales Orders modules. For the inventory receipt with the 5/1/2014 date,
there is no link to the source document, which means the transaction was originated from
the Inventory modulethat is, entered on the Receipts form (IN301000) and released.
| Step 13.4: Verifying the Inventory Transactions | 235
For the last three transactions, you can see the reference numbers of the purchase
receipts and return from which they have been generated. You can add a quick filter to
the PO Receipt Nbr. column with the condition "Is Not Null" to select only inventory
transactions that have been generated from the Purchase Orders module. Such
transactions always have a link to a purchase receipt or return from which they have been
generated, which you can view on this form.
With this form, you can verify that the necessary inventory transactions have been
released so that the on-hand quantity of the item has been updated in inventory.
On this form, the transaction quantities are presented in the base unit of measure of the
item, in which the on-hand quantities are tracked in inventory. In the row with the last
transaction, the Ending Qty column shows the on-hand quantity of the HEADSET item in
inventory, which equals 15 PC at the moment (see the screenshot below).
Figure: Inventory transactions with links to the source documents
Related Links
| Step 13.5: Verifying the GL Transactions | 236
Step 13.5: Verifying the GL Transactions

You can verify the balances of GL accounts to which the accrued amounts of purchase receipts are
processed. Complete the following instructions:
1. Verify the balance of the 213000 - Accrued Purchases account, which accumulates the amount of
the received but not yet billed inventory:
a. Run the Purchase Receipt Accrual Details report (PO631000; Distribution > Purchase
Orders > Reports > Audit) for the 213000 - Accrued Purchases account.
The report shows all unbilled purchase receipts that have been released since the
beginning of operations. The report shows the total amount of unbilled purchase receipts
by account referred in the purchase receipt lines. Currently, the unbilled purchase total is
$2915 (see the screenshot below).
Figure: Unbilled purchase receipts and returns in the Accrued Purchases account
b. Open the Account Details form (GL404000; Finance > General Ledger > Work Area >
Explore) and select the following parameters:
From Period: 07-2014 (the period of the first activity in the GL account, to view all
transactions)
To Period: 09-2014 (the last activity period in the GL account)
Account: 213000 - Accrued Purchases - Inventory
The form shows GL transactions in the account for the selected periods and the ending
balance of the account. You are selecting GL transactions up to the last activity period
to retrieve the information that match the Purchase Receipt Accrual Details report
(PO631000). The ending balance in the GL account for the last activity period must equal
the total unbilled amount by the report, which is $2915. As you see, the balances agree,
which means all appropriate GL transactions have been processed.
Figure: The balance of the Accrued Purchases account by GL transactions

| Step 13.5: Verifying the GL Transactions | 237
You can find the last activity period for an account on the Account Summary form
(GL401000). To view the last activity period, add the hidden Last Activity column to the
table by using the Columns Configuration dialog.
2. By using the same Purchase Receipt Accrual Details report (PO631000) and Account Details form
(GL404000), verify the balance of the 230000 - Accrued Expenses account, which accumulates
the amount of services purchased and processed through a receipt, but not yet billed.
The GL account balance has to agree with the unbilled total by the report. Currently, the 230000
- Accrued Expenses account balance is zero.
To view the purchase receipts and returns by all accounts, you can run the Purchase Receipt Accrual
Details report (PO631000) without parameters.
Related Links
Report Designer Reports
You can create template reports with specific filtering conditions based on the existing Report Designer
reports. For more information, see Reports in the Acumatica ERP User Guide and examples in the S130
- Inquiries, Reports, and Dashboards training course.
Generic Inquiry
You can create custom queries by using the web-based Generic Inquiry (SM208000) tool. For more
information, see Managing Generic Inquiries in the Acumatica ERP User Guide and examples in the
S130 - Inquiries, Reports, and Dashboards training course.
Lesson Summary
To review purchase orders that are at different stages of the process at the moment, you can use the
Purchase Order Summary report (PO610500). To review the details of open purchase orders, you can
use the following reports that present open quantities and amounts grouped by vendor, inventory item,
and expense account of the order line respectively:
To review the amounts of unbilled purchase receipts and returns, you can use the Purchase Receipt
Accrual Details report (PO631000).
To review the purchase receipts and AP bills that can be created by a purchase order, you can select
Reports > View Purchase Order Receipts History on the toolbar of the Purchase Orders form
(PO301000). This menu opens the Purchase Receipt History report (PO643000) for the selected order.
To view the AP bills (debit adjustments) that can be created for a purchase receipt (purchase return),
you can select Reports > View Purchase Receipts Billing History on the toolbar of the Purchase
Receipts form (PO30200). This menu opens the Purchase Receipt Billing Details report (PO632000) for
the selected receipt.
| Part 3: Sales Orders | 240
Part 3: Sales Orders

In this part of the course, you will learn the basics of configuring and using the Sales Orders module for
the following operations:
Processing a sales order of the SO (Sales Order) type
Processing a sales order of the IN (Invoice) type
Processing a sales order of the CS (Cash Sale) type
Entering a quote and converting the quote to an order
Processing back orders
Processing partial shipments
Processing multiple orders into a single shipment
Processing multiple shipments into a single invoice
Making corrections to orders and shipments
Processing sales returns for credit, cash, and replacement
Processing orders with services and non-stock
Processing an order with automatic freight charge calculation
Review of the links between the sales orders, shipments, invoices, and inventory issues
| Company Story: Sales | 241
Company Story: Sales

MyCompany is selling goods and computer services on credit and cash. Customers can place an order
and pick up the goods at the store or request a delivery of the purchase by the specified address.
In the 10-2014 period, the company starts the processing of sales orders in the system. In this period,
the company processes the first orders for goods from customers and issues the first AR invoices that
should be paid by the customers for goods. The company processes every sale from the Sales Orders
module, including the sales of goods, non-stock, and computer services.
| Lesson 14: Introduction to Sales Orders | 242
Lesson 14: Introduction to Sales Orders

The Sales Orders module provides the sales order management and the processing of transactions that
occur during the sales and order fulfillment processes in the company. In this module, the users work
with sales orders, process shipments for certain types of sales orders, and invoice customers by the
orders. In this lesson, you will configure the Sales Orders module to make the module ready for use.
Lesson Objectives
In this lesson, you will learn to provide the initial configuration for the Sales Orders module, including
the following:
Activate the SO order type
Specify the initial settings on the Sales Orders Preferences form (SO101000)
| Order Types for Sales | 243
Order Types for Sales

You have to activate at least one order type to be able to create and process sales orders in the system.
Order type specifies:
Order Type, which is the type code displayed in the Order Type box on the Sales Orders form
(SO301000). In this course, you will work with predefined order types. With the Custom Order
Types feature of the Distribution suite, you can create custom order types, which is outside of the
Order Template, which defines settings on the Template Settings tab. In this course, you will
work with order types that use predefined templates. Thus, you can notice that the predefined IN
(Invoice) and CS (Cash Sale) order types use the same Invoice template. With the Custom Order
Types feature of the Distribution suite, you can create custom templates, which is outside of the
Order type settings that you can configure on the General Settings tab. These are the basic
settings for document entry, processing, and GL transaction posting for orders of the selected
type:
Order Numbering Sequence, which is the sequence of order reference numbers.
Invoice Numbering Sequence, which is the sequence of reference numbers for invoices
prepared for orders of this type.
Posting Settings that define the sources for GL accounts and subaccounts for processing
sales transactions for orders of this type.
Order entry and processing options, such as the Hold Orders on Entry and Bill
Separately options.
Invoice entry and processing options, such as the Hold Invoice on Entry option.
Order template settings that are displayed on the Template Settings tab. Template settings are
advanced settings of workflow configuration in custom templates, which include:
Automation behavior and shipment processing settings.
Allocation type settings for lines of orders, shipments, and invoices.
There are predefined order types for the most frequently used processes. Predefined order types
can be divided into two major groupsthose that are processed through shipments, and those that
are processed directly to invoices without shipments (see the diagram below). Thus, for sales on
credit, there is a pair of order types for processing through a shipment (SO order type) and without
a shipment (IN order type respectively). For predefined order types, the Process Shipments check
box on the Template Settings tab of the Order Types form (SO201000) is the primary indicator of an
order type that is processed through shipments (however, the check box is not the only required setting
that enables this type of process).
The need for shipment processing depends on the business requirements of the company. You can use
SO type for orders that cannot be shipped at the moment because the items aren't in inventory yet. You
can use IN type for orders that you might have already shipped from inventory. If an order is processed
through a shipment, you can process partial shipments by the order where each shipment is recorded
in the system and may be invoiced individually. For shipments, you can print labels with carrier track
numbers. If you process a shipment, you can print from the shipment the pick list for the warehouse
worker and the shipment confirmation for the buyer (also called "shipping list"). Either document does
not contain information about prices; it contains only the information about inventory IDs, lot/serial
numbers, and quantities and can be provided to warehouse workers for verification of the shipped and
received quantities. Alternatively to shipment processing, you might want to use a simple process when
a sales order is directly invoiced to a customer and no shipment is processed. In addition to that, you
might want to convert an earlier created quote to an order of the needed type, which is demonstrated
later in this course.
The table below summarizes the key similarities and differences between the sales order process
through a shipment and without shipment processing.
For orders that are processed through a shipment, in case of multiple warehouse locations, the location
is specified in the shipment, while for orders that are processed directly to invoices the location is
specified in the orders themselves. If you process shipments, you can release inventory issues and
invoices in any order. If you process invoices directly, inventory issues are created only after the
invoices are released. If you process shipments, the shipped quantity can be reviewed and modified
in the shipment, while the prices and line amounts can be reviewed only in the invoice. If you process
invoices directly, you can modify the line quantities in the order and the line amounts in the invoice.
Feature Process
Through Shipment Direct Invoice
1 Warehouse selection Order Order
2 Location selection Shipment Order
3 Lot/serial selection Order and shipment Order
3 Line quantity review and edit Order and shipment Order
4 Line amount review and edit Order and invoice Order and invoice
5 Order line complete On shipment On invoice release
confirmation
6 Pick list printing Shipment No
7 Shipping list printing Shipment No
Feature Process
Through Shipment Direct Invoice
8 Freight calculation and review Freight price in a Freight price and
shipment, premium premium freight in the
freight in the order order
9 Carrier label printing Shipment No
10 Inventory update before invoice release Yes, from the shipment No
11 Partial invoices by order Yes, for partial No, one invoice per
shipments order
| 14.1: Activating an Order Type | 246
14.1: Activating an Order Type

You will start with processing sales orders of the SO type in this course. Activate the SO order type as
follows:
1. On the Order Types form (SO201000; Distribution > Sales Orders > Configuration > Setup), in
the Order Type box, select SO, and for the SO order type, specify the following settings:
a. Select the Active check box.
b. On the General Settings tab, specify the posting settings for processing transactions
generated for this type of orders (see the screenshot below):
Use Sales Account from: Posting Class
This setting specifies that the sales account for AR invoices generated for orders
of this type will be taken from the settings of the posting class to which the item
selected in the order line is assigned.
Freight Account: 480000 (Sales - Delivery Services)
This setting specifies the default freight revenue account that will be used in an
invoice in case if the account cannot be retrieved from the entity specified in the
Use Freight Account from setting (Ship Via code or customer). You will learn
more about the processing of freight charges later in this course.
c. Leave other settings with default values and click Save to save the changes.
Figure: Posting settings of the SO order type

| 14.1: Activating an Order Type | 247
Related Links
Predefined Order Types
Order Types (SO201000)
| 14.2: Configuring the Sales Orders Module | 248
14.2: Configuring the Sales Orders Module

You have to configure the Sales Orders module to be able to create and process sales orders.
In this step, you will specify the initial configuration of the Sales Orders module to make the module
ready for use. Complete the following instructions:
1. On the Sales Orders Preferences form (SO101000; Distribution > Sales Orders > Sales Orders >
Configuration), specify the following settings:
Default Sales Order Type: SO
This setting specifies the order type that is selected by default on opening of the Sales
Orders form (SO301000).
Hold Shipments on Entry: Cleared
This setting makes the system skip the On Hold status for newly-created shipments, so
that the shipments are created with the Open status.
Validate Shipment Total on Confirmation: Cleared
If this check box is cleared, the Control Quantity box isn't displayed on the Shipments
form (SO302000). You have disabled the Control Quantity box to simplify the data entry
during this course.
Use Shipment Date for Invoice Date: Selected
This setting makes the system insert the shipment dates into invoices that are created
during the Prepare Invoice process.
Automatically Release IN Documents: Selected
If this check box is selected, the system immediately releases inventory issues once the
transactions are generated from shipments or invoices processed in the Sales Orders
module.
2. Save the changes. Now the Sales Orders module is ready for processing sales orders of the SO
type.
Related Links
Sales Orders (Overview)
Sales Orders Preferences (SO101000)
| 14.3: Uploading the Sales Price List | 249
14.3: Uploading the Sales Price List

You can maintain lists of sales prices in the system and update them on a regular basis.
Suppose that you have prepared the list of base prices on items in the Microsoft Excel file. Upload the
prices and make them effective in the system as follows:
Before you start entering data, for convenience, you can set the business date to 10/1/2014 to make this
date automatically insert into the documents that you will create in this step and later.
1. On the Sales Price Worksheets form (AR202010; Finance > Accounts Receivable > Work Area >
Enter), create a worksheet with the following information:
Description: Base prices for goods and non-stock
2. On the table toolbar, click Load Records from File and select Sales Price Worksheet
10_2014.xlsx file provided for the course.
3. Click Upload to upload the prices from the source file to the table.
4. On the Common Settings and Columns steps of the wizard, leave all parameters as suggested
by default and click OK.
5. After the upload is complete, make sure the worksheet looks as shown on the screenshot below.
You have uploaded the base prices for goods and services that you are going to sell to the
customers. The uploaded prices are displayed in the Pending Price column and they aren't
effective in the system yet. You have to release the worksheet to make them effective.
Figure: Sales prices pending release
6. Clear the Hold check box, and on the form toolbar, click Release to release the worksheet.
The pending prices from the worksheet became effective in the system.
7. Open the Sales Prices form (AR202000; Finance > Accounts Receivable > Work Area > Manage).
The effective prices are displayed on the form, as shown in the screenshot below.
You have defined sales prices in the base unit of measure of the items. Prices in derived units
will be automatically calculated in documents once you select any other than the base unit in
the line. Base prices will be suggested for all customers in the documents created starting from
10/1/2014.
| 14.3: Uploading the Sales Price List | 250
Figure: Effective sales prices
For more information and examples of working with sales prices, see the F200 Financials:
Intermediate training course.
Related Links
Managing Sales Prices
Sales Price Worksheets (AR202010)
Sales Prices (AR202000)
Custom Order Types and Templates
You can create custom order types based on predefined order templates or custom templates. For
example, you can configure two types of orders based on the Sales Order template that are assigned
different reference numbers and differ by posting settings. For more information, see Custom Order
Types in the Acumatica ERP User Guide.
Processing Inventory Issues Before Invoices
If you process shipments, you can process inventory issues before the invoices are released. If there is
a significant delay of invoice processing, you might want to process the issued costs to the shipped-not-
invoiced intermediate account, and then move them to the COGS account when the invoice is released.
For more information, see Variations of Shipment Processing section in the Shipment Processing
Options article of the Acumatica ERP User Guide.
Lesson Summary
To be able to create and process sales orders, you have to activate the needed order types on the Order
Types form (SO201000) and specify the module preferences on the Sales Orders Preferences form
(SO101000).
In this lesson, you have activated the SO order type and uploaded the list of sales prices to the system
to speed up the data entry of documents. With the additional Custom Order Types feature of the
Distribution suite, you can create more order types and templates, which is outside of the scope of this
course.
| Lesson 15: Sales Order Process | 253
Lesson 15: Sales Order Process

In this lesson, you will learn to create and process a sales order of the SO type.
Lesson Objectives
Create a sales order of the SO type (Sales Order)
Print the sales order
Create the shipment by an order
Print the pick list for a shipment
Confirm the shipment
Print the shipment confirmation
Create the invoice for an order
Release the invoice with automatic inventory issue processing
Review the links between orders, shipments, invoices, and inventory issues
| SO Order Process | 254
SO Order Process
The diagram below shows the processing steps for a sales order of the SO (Sales Order) type.
| Step 15.1: Creating a SO Order | 255
Step 15.1: Creating a SO Order

Suppose the RegularCo customer buys a 14-inch laptop and a computer mouse at the store and asks
for shipping of goods to the specified address and sending of the invoice by email. You have decided to
use the SO order type to process the order through a shipment and then invoice the customer.
Perform the following instructions to create the order:
1. On the Sales Orders form (SO301000; Distribution > Sales Orders > Work Area > Enter), create
the SO order with the following information:
Order Type: SO
Customer: RegularCo
Date: 10/1/2014
Requested On: 10/1/2014
Description: 14-inch laptop and computer mouse
2. On the Document Details tab, add the lines with the following items:
Inventory ID: LAPTOP14, UOM: PC, Quantity: 1.00
Inventory ID: MOUSE, UOM: PC, Quantity: 1.00
As soon as you select an item in the order line, the unit price is automatically suggested by the
list of sales prices that you defined in the system (see the screenshot below).
Ext. Price (extended price) of the order line equals the Unit Price multiplied by the Quantity
of the order line minus the Discount Amount that can be specified in the line. Open Qty (open
quantity) of the order line equals Quantity minus Qty. on Shipments.
Disc. Unit Price (discounted unit price) shows the unit price that is calculated from the
extended price as Ext. Price divided by Quantity of the line. If there is a discount amount
that reduces the extended price of the line, the discounted unit price will be correspondingly
lower than the unit price retrieved from the price list. Discounted unit price is displayed for
information.
3. Save the order with the On Hold status.
The order is assigned a reference number by the SOORDER numbering sequence that is specified
for the SO order type in the Order Numbering Sequence box on the Order Types form
(SO201000).
Figure: SO order for stock goods
If the wrong customer ID has been specified in a sales order during manual data entry, and many
lines have already been added to the order, the user can create the correct order as follows: export
the detail lines of the wrong order to Excel, remove all columns that were not entered manually
from the exported Excel file to make sure the default values will repopulate in the correct order,
remove the wrong order, create a new one with the correct customer ID, and upload the detail lines
from Excel to the new order.
Suppose that the customer requests a fast premium shipping that you provide at the price of
$40 per order.
4. On the Totals tab, in the Premium Freight box, enter 40.00 and save the order.
5. Review the amounts that are displayed in the order summary and on the Totals tab (see the
screenshot below).
Line Total equals the total in the Ext. Price column on the Document Details tab of lines
with stock items and non-stock items that require a shipment. Misc. Total equals the total in
the Ext. Price column on the Document Details tab of lines with non-stock items that don't
require a shipment. You have created the order with stock items only and the line total equals
$1400.00 + $12.00 = $1412.00 at the moment.
Freight equals to the freight price that can be automatically calculated by the system. You will
learn more about freight calculation later in this course. In addition to the calculated freight, you
can specify the Premium Freight manually, which is added up to the total freight amount.
In the order summary, Order Total equals Line Total plus Misc. Total plus Tax Total plus
Freight plus Premium Freight. The order total equals $1412.00 + 40.00 = $1452.00.
The quantities and amounts, which are displayed in the second column on the Totals tab, are
calculated for information and get updated when you process shipments, invoices by the order,
and payments for the invoices. Unshipped Quantity and Unshipped Amount are calculated
by lines with stock items and non-stock items that require a shipment. Unbilled Quantity and
Unbilled Amount are calculated by all lines of the order. You haven't processed any shipments
or invoices by the order, and the unshipped amount and unbilled amount are currently equal to
the order total of $1452.00.
Unpaid Balance equals Unbilled Amount minus Payments Total minus Pre-Authorized
Amount. Payments Total equals the total in the Applied to Order column on the Payments
tab. Pre-Authorized Amount is the amount that can be held on a credit card if the integrated
credit card processing is used in the system and a credit card payment method is specified in the
sales order (processing credit card payments is outside of the scope of this course).
Figure: Order totals

6. On the Inventory Allocation Details form (IN402000; Distribution > Inventory > Work Area
> Explore), in the Inventory ID box, select the LAPTOP14 item, as shown in the screenshot
below.
For the SO orders on hold, the open quantities of order lines are classified to the SO Prepared
allocation type. According to the settings of the item class, to which the LAPTOP14 item is
assigned, the SO Prepared subtotal is included in the Total Deduction, which reduces the
available quantity to 2 units: 3 units on hand 1 total deduction = 2 units (see the screenshot
below). SO Prepared quantity doesn't reduce the available for shipping quantity; therefore, SO
Prepared items are not reserved for the order and can be sold to another customer.
Figure: Open quantity of the SO order on hold is classified to SO Prepared
7. Double-click the order line to open the order on the Sales Orders form (SO301000).
8. On this form, clear the Hold check box and save the order with the Open status.
9. On the form toolbar, click Reports > Print Sales Order/Quote to print the order. The system
opens the printed form of the order (see the screenshot below).
Figure: The printed form of the sales order
With the additional the Customer & Vendor Discounts feature, you can specify group and document
discounts in sales orders. The total amount of group and document discounts is displayed in the
Discount Total box on the Totals tab of the Sales Orders form (SO301000) and printed in the
Less Discount line of the form footer (see the screenshot above). Customer discounts are outside
of the scope of this course. For more information, see references in Additional Information.
10. On the Inventory Allocation Details form (IN402000), review the allocation type for the
LAPTOP14 item. For the open SO orders, the open quantities of the order lines are classified to
the SO Booked allocation type.
The SO Booked goods are still not reserved for the order.
Now you can process the shipment.
Related Links
Predefined Types of Sales Orders
Sales Order Processing Options
Payment Reservation for Sales Orders
Sales Orders (SO301000)
| Step 15.2: Creating a Shipment | 259
Step 15.2: Creating a Shipment

Available for shipping units are enough, and you are shipping the order on the same day. Create and
process the shipment as follows:
1. On the Shipments form (SO302000; Distribution > Sales Orders > Work Area > Enter), create
the shipment with the following information:
Shipment Nbr: (assigned automatically on saving)
Type: Shipment
Customer: RegularCo
Operation: Issue
Issue operation means an outgoing shipment that you process for a sales order. When you
process a sales return, you can create an incoming shipment that performs the reversing
operation, receipt. The processing of return orders is described later in this course.
Shipment Date: 10/1/2014
2. On the table toolbar of the Document Details tab, click Add Order to select the order lines for
shipment.
3. In the Add Sales Order dialog box, in the Order Nbr box, select the number of the sales order
that you have created earlier, and in the table, select the two lines of the order as the screenshot
below shows.
The dialog shows order lines with open quantities that haven't been selected in a shipment yet.
Figure: Sales order lines selected for the shipment
4. Click Add & Close to add the order lines to the shipment.
The Shipped Qty of the shipment lines has been automatically set to the order line quantities.
You can modify the shipment date and shipped quantities while the shipment retains the On Hold
or Open status.
5. Save the shipment with the Open status (see the screenshot below).
The On Hold status is skipped for shipments because the Hold Shipments on Entry check box is
cleared on the Sales Orders Preferences form (SO101000).
The shipment is assigned a reference number by the SOSHIPMENT numbering sequence that is
specified in the Shipment Numbering Sequence box on the Sales Orders Preferences form
(SO101000).
6. Review the Orders tab, as shown in the screenshot.
On the Orders tab of the Shipments form (SO302000), you can find links to all related sales
orders, invoices, and inventory issues that exist in the system.
Figure: Links to orders, invoices, and inventory issues from the shipment
7. In the table, click the order link. The system opens the sales order on the Sales Orders form
(SO301000).
While there is an open shipment by the order, the order retains the Shipping status and no next
shipments can be created by the order. You have to confirm the open shipment before you can
create the next shipment by the order.
8. On this form, select and review the Shipments tab.
On the Shipments tab of the Sales Orders form (SO301000), you can find links to all related
shipments, invoices, and inventory issues that exist in the system.
Figure: Links to shipments, invoices, and inventory issues from the order
9. On the Inventory Allocation Details form (IN402000), review the allocation type for the
LAPTOP14 item, as the screenshot below shows.
For the open shipments, the shipped quantities of lines are classified to the SO Allocated
allocation type (see the screenshot below).
After you have created the shipment, the LAPTOP14 unit has been moved from SO Booked to SO
Allocated. SO Allocated reduces the available quantity according to the settings of the item class
to which the LAPTOP14 item is assigned. SO Allocated quantity reduces the available for shipping
quantity; therefore, SO Allocated items are reserved in stock for the order and cannot be sold to
another customer.
Figure: Open shipment lines are classified to SO Allocated
10. In the table, double-click the shipment line. The system opens the shipment on the Shipments
form (SO302000).
11. On the form toolbar, click Actions > Print Pick List, to print the pick list.
The pick list contains the lines from the shipment with quantities and warehouse locations from
which the items have to be collected (see the screenshot below).
Figure: Pick list for collecting goods at the warehouse
12. Suppose that the goods have been collected and packed for shipping. On the Shipments form
(SO302000), open the prepared shipment and on the form toolbar, click Actions > Confirm
Shipment to confirm the shipment.
The shipment has been assigned the Confirmed status, and the order has been assigned the
Completed status because the shipment of full open quantities of all order lines has been
confirmed.
13. On the form toolbar, click Reports > Print Shipment Confirmation to print the shipment
confirmation.The system will display the printed form of the shipment confirmation.
Shipment confirmation can be printed out, put into the package, and shipped to the buyer along
with the goods. By the list, the buyer can verify the items on receipt (see the screenshot below).
Figure: Shipment confirmation with the list of items and their quantities
14. On the Inventory Allocation Details form (IN402000), review the allocation type on for the
LAPTOP14 item.
For confirmed shipments for which inventory issues haven't yet been created, the shipped
quantities of lines are classified to the SO Shipped allocation type. After you have confirmed
the shipment, the LAPTOP14 unit has been moved from SO Allocated to SO Shipped (see the
screenshot below). The SO Shipped quantity still reduces the available for shipping quantity; the
items remain reserved in stock to fulfill the order.
Figure: Not issued lines of confirmed shipments are classified to SO Shipped
Related Links
Shipment Processing Options
Shipments (SO302000)
| Step 15.3: Processing the Invoice | 264
Step 15.3: Processing the Invoice

On-hand quantity of goods hasn't been updated in the system yet. You have decided to process the
invoice first and have the inventory issue created automatically on release of the invoice. Process the
invoice by the order:
1. On the Invoices form (SO303000; Distribution > Sales Orders > Work Area > Enter), create the
invoice with the following information:
Type: Invoice
Customer: RegularCo
Date: 10/1/2014
2. On the table toolbar of the Document Details tab, click Add Order.
3. In the Add Order dialog box, select the order and click Add & Close to copy the shipment lines
to the invoice (see the screenshot below).
Figure: Sales order selected for copying of the shipment lines to the invoice
4. Clear the Hold check box and save the invoice with the Balanced status (see the screenshot
below).
As soon as you select shipment lines in the invoice, the shipment gets the Invoiced status.
According to the Use Sales Account from setting of the SO order type, the sales account
for each line of the invoice has been retrieved from the posting class of the inventory item.
Shipped quantities have been copied from the shipment lines to the invoice lines. Based on the
unit prices and discounts that have been copied from the sales order, the line amounts have
been calculated in the invoice. You can modify prices and discounts in the invoice lines until the
invoice is released. You can also use the Actions > Recalculate Prices action to refresh the
unit prices and discounts in the invoice by the list of the effective sales prices and discounts in
the system. Recalculation might be needed, for example, if a change in the shipped quantity
may affect the effective prices or discounts that should be applied to the invoice, or the sales
prices have been updated in the system since the time the sales order was created.
The invoice is assigned a reference number by the ARINVOICE numbering sequence that is
specified for the SO order type in the Invoice Numbering Sequence box on the Order Types
form (SO201000).
Figure: Quantities copied from the shipment, sales accounts retrieved according to the posting settings of
the order type
5. Review the information that is displayed on the Freight Details tab.

On the Freight Details tab, Line Total equals the total in the Amount column on the
Document Details tab grouped by shipment. Freight Cost and Freight Amt. have been
copied from the Shipping Settings tab of the shipment.
Premium freight amount that is displayed in the Premium Freight Amt column has been
allocated from the premium freight amount specified in the order. Premium freight is allocated to
invoices according to the Freight Allocation on Partial Shipping setting on the Sales Orders
Preferences form (SO101000), which is set to Full Amount First Time at the moment. The Full
Amount First Time option specifies the allocation to the first invoice where the order is selected.
You can modify this amount in the invoice until the invoice is released. The 480000 - Sales -
Delivery Services freight revenue account has been retrieved from the Freight Account setting
of the SO order type on the Order Types form (SO201000), which is used by default if the
account cannot be retrieved from the source entity that is specified in the Use Freight Account
from setting of the order type. Total Freight Amt. equals Freight Amt. plus Premium
Freight Amt. You will learn more about freight calculation later in this course.
Figure: Freight details
The invoice amount is displayed in the Balance box of the invoice summary and is calculated
based on the amounts that are displayed on the Totals tab (see the screenshot below). On the
Totals tab, the Line Total amount equals the total in the Line Total column on the Freight
Details tab. The invoice amount equals the Line Total plus Misc. Total minus Discount Total
plus Tax Total plus Freight plus Premium Freight, $1412.00 + $40.00 = $1452.00. Freight
equals the total in the Freight Amt. column on the Freight Details tab. Premium Freight
equals the total in the Premium Freight Amt. column on the Freight Details tab. Once
changed, the invoice amount has to be confirmed in the Amount box of the invoice summary.
Figure: Invoice amount
6. On the form toolbar, click Actions > Release to release the invoice.
As soon as you release the invoice, the shipment gets the Completed status if the full shipped
quantities of all lines were invoiced.
During the invoice release, the system generates the GL transaction to record revenue amounts
and generates the inventory issue that removes the goods from inventory.
7. On the Financial Details tab, click the Batch Nbr. link to open the batch of journal
transactions on the Journal Transactions form (GL301000), and review the sales transaction
posted to the accounts. The sales accounts and the freight account are credited with the sales
revenue amounts, and the AR account is debited in the total amount of the invoice:
431000 - Sales - Laptops Cr, $1400
432000 - Sales - Supplements Cr, $12
480000 - Sales - Delivery Services Cr, $40
110000 - Accounts Receivable Dr, $1452
8. On the form toolbar of the Invoices form (SO303000), click Reports > Print Invoice to review
the printable form of the invoice.
In the printed form, invoice lines are grouped by sales order and shipment for which the invoice
is issued. Freight revenue is presented as a separate line of the document, in the same way as it
is reflected in the AR invoice (see the screenshot below).
Figure: SO invoice printed form
9. On the Invoices and Memos form (AR301000; Finance > Accounts Receivable > Work Area
> Enter), open and review the AR invoice with the same reference number as the reference
number of one that you have just released, as shown in the screenshot below.
AR invoice is a financial document that doesn't have information about sales orders, shipments,
and freight details. AR invoices for sales of services and non-stock can be entered directly from
the Invoices and Memos form (AR301000). On the Customer Details form (AR402000) and
Accounts Receivable reports, the document links refer to AR invoices. Credit memos can be
applied to invoices in the Accounts Receivable module.
Invoices for sales of goods and mixed orders can be processed only from the Sales Orders
module. Originating invoices that are created on the Invoices form (SO303000) are called "SO
invoices" for distinction from AR invoices. After you release an SO invoice, you can view the
corresponding AR invoice on the Invoices and Memos form (AR301000). SO invoice entry is an
extension of the AR invoice; SO invoice lines contain links to the orders and shipments. The
same reference number is assigned to the SO invoice and AR invoice and printed in a customer
statement so that it looks as a single document for the customer.
Figure: Freight line in the AR invoice
10. On the form toolbar, click Reports > Print Invoice/Memo to preview the printable form of the
AR invoice.
SO and AR invoices are printed by different templates. SO invoices are printed by the Invoice &
Memo template (SO643000), in which the lines are grouped by sales order and shipment, while
AR invoices are printed by the Invoice/Memo template (AR641000) that prints no information on
sales orders and shipments (see the screenshot below).
Figure: AR invoice printed form
On the Invoices and Memos form (AR301000), you can use the Inquiries > SO Invoice menu
to navigate to the originating SO invoice, if any. If you select that menu for an invoice that was
created from the Accounts Receivable module, the blank Invoices form (SO301000) opens.
Later in this course, "invoice" means the SO invoice on the Invoices form (SO303000) unless stated
otherwise.
Related Links
Invoices and Memos in the Sales Orders Module
Invoices (SO303000)
| Step 15.4: Reviewing the Inventory Issue | 270
Step 15.4: Reviewing the Inventory Issue

Inventory issue has been generated and released immediately after the invoice release. Perform the
following actions to find the reference number of the inventory transaction and review the transaction:
1. On the Sales Orders form (SO301000), open the sales order that you have created earlier.
2. On the Shipments tab, find the link to the inventory issue (see the screenshot below).
On the Shipments tab, you can find links to all documents and inventory issues created by the
order.
Figure: Link to inventory issue
3. Click the link in the Inventory Ref. Nbr. column, to open the inventory issue for review on the
Issues form (IN302000).
The issue has been immediately released upon creation because the Automatically Release
IN Documents check box is selected on the Sales Orders Preferences form (SO101000). The
following transaction has been posted to the accounts in the General Ledger module, which you
can review by clicking the Batch Nbr. link on the Financial Details tab:
130000 - Merchandise Inventory Cr, $1150 (laptop)
130000 - Merchandise Inventory Cr, $9.95 (mouse)
530000 - Cost of Goods Sold Dr, $1159.95
During the issue release, the COGS accounts for the transaction is retrieved from the posting
classes to which the items are assigned, LAPTOP and SUPPDEVICE. Both posting classes specify
the 530000 account as the COGS account, and the amounts have been summed up on this
account in the transaction.
4. On the Inventory Allocation Details form (IN402000; Distribution > Inventory > Work Area >
Explore), in the Inventory ID box, select the LAPTOP14 item.
All documents with the LAPTOP14 item have been processed to the end, and the list of document
lines is empty on the form. After the issue has been released, two 14-inch laptops remain in
inventory on hand (see the screenshot below).
| Step 15.4: Reviewing the Inventory Issue | 271
Figure: On-hand quantity of LAPTOP14
The processing of the sales order is complete. The shipment, invoice, and inventory issue have been
processed and the GL transactions were posted to the accounts to record the sales revenues and the
cost of goods sold.
Related Links
Issues (IN302000)
Stock Reservation
You can use the SA order type that allows you to reserve stock for the order so that the goods promised
to a customer can't be shipped to another customer. For more information, see Sales Orders with
Allocations in the Acumatica ERP User Guide.
Processing Documents With Taxes
You can configure automatic calculation of tax amounts in sales orders and invoices, process documents
with taxes, and then prepare tax reports. For more information and examples, see the needed training
course:
F330 Financials: AdvancedSales Taxes and Avalara Integration 5.3
F335 Financials: AdvancedValue-Added Taxes 5.3
Customer Discounts
You can configure different types of discounts that can be applied to sales orders depending on specified
conditions. You can see the examples of discounts in the F200 Financials: Intermediate training course.
For more information, see Overview of Discounts in the Acumatica ERP User Guide.
Lesson Summary
Sales orders of the SO type are processed through the shipments. After you have created an order
on the Sales Orders form (SO301000), you have to save the order with the Open status to be able
to create the shipment by the order. Shipment has to be confirmed before the invoice and inventory
issue can be created. On release of the invoice, the system generates the inventory issue. If the
Automatically Release IN Documents check box is selected on the Sales Orders Preferences form
(SO101000), the issue is immediately released. After the invoice and inventory issue are released and
the GL transactions are posted, the process is complete.
| Lesson 16: Invoices, Cash Sales, Quotes | 274
Lesson 16: Invoices, Cash Sales, Quotes

In this lesson, you will learn to process sales orders of other than SO type, which are processed without
shipments.
Lesson Objectives
Create and process a sales order of the IN type (Invoice)
Create and process a sales order of the CS type (Cash Sale)
Create a quote
Create an order based on a quote

| IN Order Process | 275
IN Order Process
IN (invoice) order type is a special type of sales order, which you can create when goods requested by a
customer have already been shipped, so that the processing of the orders does not involve shipments.
IN order type might be useful for integration with third-party order processing systems.
The diagram below shows the processing steps for a sales order of the IN (Invoice) type.
| Step 16.1: Processing an IN Order | 276
Step 16.1: Processing an IN Order

Suppose that the RegularCo customer buys another laptop, 12-inch laptop, and one more computer
mouse on credit and picks up the goods at the store. No shipping is needed; you only need to invoice
the customer for the order. You can process the sales order of IN type in this case.
Activate the IN order type and process the order as follows:
1. On the Order Types form (SO201000; Distribution > Sales Orders > Configuration > Setup),
for the IN order type, specify the same parameters as those that you have specified for the SO
order type:
Active: Selected
General Settings tab, Use Sales Account from: Posting Class
General Settings tab, Freight Account: 480000 (Sales - Delivery Services)
2. Save your changes.
the IN order with the following information:
Order Type: IN
Customer: RegularCo
Date: 10/2/2014
5. Save the order with the Open status (see the screenshot below).
The On Hold status is skipped for the order because the Hold Orders on Entry check box is
cleared for the IN order type on the Order Types form (SO201000).
The order is assigned a reference number according to the ARINVOICE numbering sequence that
is specified by default for the IN order type in the Order Numbering Sequence box on the
Order Types form (SO201000).
Figure: IN Order
6. On the Inventory Allocation Details form (IN402000; Distribution > Inventory > Work Area >
Explore), in the Inventory ID box, select the MOUSE item.
For the open IN orders, the open quantities of order lines are classified to the SO Shipped
allocation type. In the Reference Nbr. column, you can see order type IN, which is followed by
the reference number (see the screenshot below).
Figure: Open IN order quantities are classified to SO Shipped
7. Double-click the order line to open the document on the Sales Orders form (SO301000).
8. On the toolbar of this form, click Actions > Prepare Invoice to create the invoice by the order.
The system prepares the invoice and opens it on the Invoices form (SO303000).
9. Review the prepared invoice on the Invoices form (SO303000).
Order lines have been copied to the invoice. According to the Use Sales Account from setting
of the IN order type, the sales account for each line has been retrieved from the posting class to
which the inventory item is assigned.
The IN order has been assigned the Invoiced status as soon as you have created the invoice. IN
orders cannot be invoiced partially. You can change prices, discounts, and premium freight in the
invoice. If you need to change quantities, you can remove the invoice, modify the quantities in
the order, and then create the invoice again.
Invoices for IN orders cannot be entered by using the Add Order button on the Document
Details tab of the Invoices form (SO303000). However, you can create invoices for IN orders
in bulk by running the Prepare Invoice process for the orders on the Process Orders form
(SO501000).
10. On the form toolbar, click Actions > Release to release the invoice. The invoice has been
assigned the Open status (see the screenshot below).
The system has generated GL transactions to the sales accounts and produced the inventory
issue of goods. The AR invoice is now available on the Invoices and Memos form (AR301000).
Figure: Invoice for IN order
11. On the Document Details tab, click the link in the Order Nbr. column. The system opens the
IN order on the Sales Orders form (SO301000).
The sales order has been assigned the Completed status as soon as you have released the
invoice.
12. On the Shipments tab of the Sales Orders form (SO301000), click the link in the Inventory
Ref. Nbr column to open the inventory issue.
You can use the Shipments tab to find the link to the inventory issue that has been processed
for the IN order. <NEW> placeholder is displayed as the shipment number for order types that
are processed without shipments (see the screenshot below).
Figure: Link to the inventory issue from the IN order
13. On the opened Issues form (IN302000), review the inventory issue and make sure it has been
released.
After the inventory issue is released, 15 laptops LAPTOP12 and 62 computer mouse MOUSE
pieces remain in inventory on hand.
Related Links
Invoice Order Processing Options
| Step 16.2: Processing a CS Order | 279
Step 16.2: Processing a CS Order

Suppose that the RegularCo customer buys another 12-inch laptop and one more computer mouse for
cash and picks up the goods at the store. No shipping is needed; you need to process the cash sale. In
this case, you can use the sales order of the CS type as follows:
for the CS order type, specify the same parameters as those that you have specified for the SO
order type:
Active: Selected
the CS order with the following information:
Order Type: CS
Customer: RegularCo
Date: 10/3/2014
5. On the Payment Settings tab, specify the following information:
Payment Method: CASH
Cash Account: 101000 - Cash on Hand USD (inserted automatically)
Payment Ref.: 000001
6. Click Save to save the order with the Open status (see the screenshot below).
The On Hold status is skipped for the order because the Hold Orders on Entry check box is
cleared for the CS order type on the Order Types form (SO201000).
The order is assigned a reference number according to the ARINVOICE numbering sequence that
is specified by default for the CS order type in the Order Numbering Sequence box on the
Order Types form (SO201000).
Figure: Payment information in the CS order
7. On the Inventory Allocation Details (IN402000; Distribution > Inventory > Work Area >
Explore), in the Inventory ID box, select the MOUSE item.
For the open CS orders, the open quantities of order lines are classified to the SO Shipped
allocation type. In the Reference Nbr. column, you can see the CS order type, which is followed
by the reference number (see the screenshot below).
Figure: Open CS order quantities are classified to SO Shipped
8. In the only row of the table, double-click the order line. The system opens the CS order on the
on the Sales Orders form (SO301000).
9. On the form toolbar, click Actions > Prepare Invoice to create the cash sale document by
the order. The system prepares the cash sale document and opens it on the Invoices form
(SO303000).
10. On this form, review the prepared cash sale document, as shown in the screenshot below.
Order lines have been copied to the document. According to the Use Sales Account from
setting of the CS order type, the sales account for each line has been retrieved from the posting
class to which the inventory item is assigned (see the screenshot below).
The CS order has been assigned the Invoiced status as soon as you have created the invoice.
The CS orders cannot be processed partially. You can change prices, discounts, and premium
freight in the cash sale document on the Invoices form (SO303000). If you need to change
quantities, you can remove the cash sale, modify the quantities in the order, and then create the
cash sale document again.
Cash sale documents for CS orders cannot be entered by using the Add Order button on the
Document Details tab of the Invoices form (SO303000).
Figure: Sales accounts retrieved according to the posting settings of the order type
11. On the form toolbar, click Actions > Release to release the cash sale.
The system has generated GL transactions for the cash sale and produced the inventory
issue of goods. The cash sale document has been assigned the Closed status upon release.
The corresponding cash sale document is now available for viewing on the Cash Sales form
(AR304000).
12. On the Financial Details tab, click the Batch Nbr. link to review the generated transaction on
the Journal Transactions form (GL301000).
The cash sale transaction has been posted to the GL accounts as follows:
431000 - Sales Laptops Cr, $1160
432000 - Sales Supplements Cr, $12
101000 - Cash on Hand Dr, $1172
13. On the Cash Sales form (AR304000; Finance > Accounts Receivable > Work Area > Enter), open
the document with the same reference number as the reference number of one that you have
just released.
In the Accounts Receivable module, cash sale is a financial document that doesn't have
information about sales orders, shipments, and freight details. Cash sales for services and non-
stock can be entered directly from the Cash Sales form (AR304000). Cash sales for goods and
mixed orders can be processed only from the Sales Orders module. After you release a cash sale
in the Sales Orders module, you can view the corresponding document on the Cash Sales form
(AR304000).
14. On the Sales Orders form (SO301000), open the CS order that you have created earlier.
The sales order has been assigned the Completed status as soon as you have released the cash
sale document on the Invoices form (SO303000).
15. On the Shipments tab of this form, click the link in the Inventory Ref. Nbr. column of the only
row to open the corresponding inventory issue. The system opens the inventory issue on the
Issues form (IN302000).
You can use the Shipments tab to find the link to the inventory issue that has been processed
for the CS order (see the screenshot below).
Figure: Link to the inventory issue from the CS order
16. On this form, review the inventory issue and make sure it has been released.
After the inventory issue is released, 14 laptops LAPTOP12 and 61 computer mouse MOUSE
pieces remain in inventory on hand.
Related Links
Cash Sales Processing Options
| Step 16.3: Processing a Quote | 283
Step 16.3: Processing a Quote

You can create a quote to record a future sale, which might be useful for the sales planning. Then you
can create a sales order of the needed type from that quote. Once you create the order, the quote is
assigned the Completed status in the system.
Suppose the company offers five 12-inch laptops to the RegularCo customer on credit with a $100
discount on the total amount. The customer will most likely agree, and you want to record the quote for
planning. You can record the quote as a sales order of the QT type.
Perform the following tasks:
1. Enter the quote for laptops offered to RegularCo with $100 discount.
2. Create the order from the quote.
1. Enter the Quote

Activate the QT order type and create the quote as follows:
1. On the Order Types form (SO201000; Distribution > Sales Orders > Configuration > Setup), for
the QT order type, specify the following parameters:
Active: Selected
Posting settings are required for every order type, but they are not used for order types with the
QT (Quote) template, because invoices are not prepared directly from quotes. A quote has to be
converted to a sales order first, then the invoice can be created for that order. Posting settings of
the order type apply to the invoice.
the QT order with the following information:
Order Type: QT
Customer: RegularCo
Date: 10/4/2014
Description: 12-inch laptops with discount
4. On the Document Details tab, add a line with the laptop as shown in the screenshot below:
Inventory ID: LAPTOP12, UOM: PC, Quantity: 5, Discount Amount: $100
5. Click save to save the created quote with the Open status.
Figure: Quote
6. On the Shipping Settings tab, review the Cancel By box. Leave the default specified value.
In the Cancel By box, you specify the expiration date of the quote. By default, the date in the
Cancel By box is calculated as follows: the number of days in the Days To Keep setting of the
order type on the Order Types form (SO201000) is added to the order date. Currently, for the QT
order type, the Days To Keep setting is 30 days. Therefore, the default expiration date of the
quote has been calculated as 10/4/2014 + 30 days = 11/3/2014 (see the screenshot below).
Figure: Expiration date of the quote

To cancel expired quotes on a regular basis, you can schedule the Cancel Order action on the
Process Orders form (SO501000) to execute for orders selected by the Cancel By date. Nothing
happens to a document in the system until a user action is applied to the document, either initiated
manually or executed automatically by schedule.
7. On the form toolbar, click Reports > Print Sales Order/Quote to print the quote. The
system opens the printable form of the quote on the Quote form (SO641000), as shown in the
screenshot below.
In the document line, the discount percentage of ~1.7% is presented, which is the percentage
of the line amount before discount, 5 * $1160 = $5800. The discount amount of $100 is
approximately 1.7% of $5800. Extended price of the line is the amount after the discount, $5800
- $100 = $5700.
The expiration date of the quote is also printed on the form. This is the date that is specified in
the Cancel By box on the Shipping Settings tab of the Sales Orders form (SO301000) for the
QT orders.
Figure: Printed form of the quote
Quotes are printed by the Quote template (SO641000; Distribution > Sales Orders > Reports >
Forms), which is different from the template for sales orders that use the Sales Order template
(SO641010; Distribution > Sales Orders > Reports > Forms). The template is specified in the
automation steps settings, which are outside of the scope of this course.
8. On the Inventory Allocation Details (IN402000; Distribution > Inventory > Work Area >
Explore), in the Inventory ID box, select the LAPTOP12 item. Notice that quantities on quotes
are not classified to any allocation type.
2. Create the Order From the Quote

Suppose that two days after, the customer agrees to buy the laptops with a greater discount of $120.
The customer picks up the goods at the store. Create the order based on the quote:
1. On the Sales Orders form (SO301000), open the quote that you have created earlier.
2. Set the business date to 10/6/2014. This date will be inserted into the order that you will create
from the quote.
3. On the form toolbar, click Actions > Copy Order to create the sales order from the quote.
4. In the appeared Copy To dialog box, specify the following parameters, as shown in the
screenshot below; then click OK to create the order.
Order Type: IN
Recalculate Unit Prices: Cleared
You can use the Copy Order action or standard copy-paste functionality that is available on the
Sales Orders form (SO301000). With the Copy Order action, you can reset manual prices and
discounts in the copied order without having to additionally call the Recalculate Prices action
for it. If you copy orders, you need to make sure the posting settings are consistent between
the order types, because if they are not consistent, on adding a new line to the copied order, the
sales account and subaccount in the new line may differ from those in the lines copied from the
original order, which will lead to the wrong accounts and subaccounts in the invoice.
Figure: Creating an order by the quote
5. Click save to save the IN order that was created. Document lines and all other information from
the quote has been copied to the order.
6. In the Discount Amount box of the order line, adjust the discount amount to 120.00 and save
the order (see the screenshot below). The order total has been recalculated.
From the open quote, you can create an order of any type, SO (sales order), IN (invoice), or CS
(cash sale). As soon as you save the order, the quote is assigned the Completed status.
The created IN order should be processed further according to the process that has been
described earlier in this course. You don't have to process the order at the moment.
Figure: Discount amount in the order
Related Links
Predefined Types of Sales Orders
Salesperson Commissions
You can track salesperson IDs in invoices and set up the calculation of commissions that can be paid to
salespersons for successful sales. For more information, see Managing Commissions in the Acumatica
ERP User Guide.
Credit Verification of Customer Accounts
You can configure automatic credit verification of customer accounts that triggers on selection of the
customer ID in a sales order and invoice. Once a customer fails a credit check, the system may prevent
the processing of the order or invoice further. For more information, see Credit Check in the Sales
Orders Module in the Acumatica ERP User Guide.
Lesson Summary
Sales orders of the IN (Invoice) and CS (Cash Sale) types are processed without preparing the
shipments. If you process an order directly to the invoice, the inventory issue is generated on release
of the invoice along with the GL transactions to the sales account. You can find the link to the inventory
issue on the Shipments tab of the Sales Orders form (SO301000).
After you release the invoice in the Sales Orders module, you can view the corresponding AR invoice
on the Invoices and Memos form (AR301000). If you release a cash sale document in the Sales
Orders module, you can view the corresponding document on the Cash Sales form (AR304000). In
the Accounts Receivable module, invoices and cash sales are financial documents that don't have
information about sales orders, shipments, and freight details. Invoices and cash sales for services and
non-stock can be entered directly from the Cash Sales form (AR304000). Invoices and cash sales for
goods and mixed orders can be processed only from the Sales Orders module.
You might want to keep records of sales quotes for planning. You can use the QT order type to enter a
quote. Based on the quote, you can create an order of the needed type. As soon as you save the order,
the quote is assigned the Completed status.
| Lesson 17: Shipments | 290
Lesson 17: Shipments

In this lesson, you will learn more about the processing of sales orders with shipments.
Lesson Objectives
Configure the shipping rules for an order for processing partial shipments and single complete
shipments
Fulfill a back order once the needed items are received to inventory
Make corrections to a shipment
Make corrections to an invoice
Process scheduled shipments by an order
Process one invoice for a number of shipments
Process a number of orders into a single shipment

| Shipment Creation Conditions | 291
Shipment Creation Conditions

Shipments are generated by warehouse. The system creates an individual shipment from each
warehouse that is used in an order as if there is a number of orders that are shipped from differ
warehouses. The header shipping rule of the order specifies the document-level condition of shipment
creation and applies individually to each warehouse in the order. If the order refers to different
warehouses, the system can create a shipment from one warehouse and may not create the shipment
from another warehouse if the quantity in that warehouse is not enough. If you are creating shipments
by processing orders on the Process Orders form (SO501000), the system creates shipments one by
one from each warehouse that is referred in each processed order.
The header shipping rule of the order, which is specified on the Shipping Settings tab of the Sales
Orders form (SO301000), applies as follows:
1. If the header shipping rule is Ship Complete, the shipment is created from the selected
warehouse only if all lines can be shipped from that warehouse according to the shipping rule of
each line: Ship Complete lines in full, other lines at least partially.
2. If the header shipping rule is other than Ship Complete, the shipment is created from the
selected warehouse if at least one line can be shipped from that warehouse according to the
shipping rule of the line.
When a shipment is created, the system adds the lines to the shipment according to the following logic:
1. The system selects incomplete lines (lines with non-zero open quantity) that have to be shipped
from the selected warehouse.
2. The system filters the selected lines by the Ship On date and adds to the shipment only the
lines that have the Ship On date no later than the specified shipment date.
3. The system adds the lines to the shipment according to the shipping rule of the line:
Ship Complete line is added to the shipment only if the open quantity can be shipped in full
from the available for shipping quantity.
Back Order Allowed and Cancel Remainder lines are added to the shipment with quantities
that are available for shipping at the moment of shipment creation even if those quantities
are less than open quantities.
Order lines are completed by quantity. When you confirm a shipment of the full open quantity of an
order line, the Completed check box becomes selected in the order line. After all lines are completed,
the order is assigned the Completed status.
When you confirm a partial shipment, if an open Ship Complete line or incomplete Back Order Allowed
line remains in the order, the remaining open quantity of the line becomes classified to the SO Back
Ordered allocation type, and the sales order is assigned the Back Order status. The open quantities of
Cancel Remainder lines are set to zero and the lines get the Completed check box selected.
On the Process Orders form (SO501000) for the particular Ship On date, you cannot find a sales order to
process if the sales order has no SO Booked lines with this Ship On date. For example
SO Back Ordered
| Back Order Replanning Process | 292
Back Order Replanning Process

Sales order lines that cannot be shipped at the moment are assigned the SO Back Ordered allocation
type if the shipment creation failed for them.
If you create individual shipments by using the Create Shipment action on the Sales Orders form
(SO301000), the shipment will be created for SO Booked, SO Allocated, and SO Back Ordered lines for
which the available for shipping quantities is above zero.
If you mass-create shipments by using the Create Shipment action on the Process Orders form
(SO501000), you need to replan the back orders so that the order lines have the SO Booked or SO
Allocated allocation type. Update of the allocation type from SO Back Ordered to SO Booked is called
"replanning of back orders" in the system. Back orders can be replanned automatically or manually by
running the replanning process.
If the Replan Back-Orders check box is selected on the Inventory Preferences form (IN101000),
the system automatically replans back orders on release of every inventory transaction that increases
inventory on hand, such as inventory receipt, receiving part of a transfer, positive inventory adjustment.
The replanning process is performed for the items that are involved in the released inventory
transactions. Alternatively, you can switch off automatic replanning by clearing the Replan Back-
Orders check box and use the replanning process that can be run on the Validate Inventory form
(IN505000) as follows:
1. In the table, select the available for shipping items.
2. On the table toolbar, select the Replan Back Orders check box.
3. On the form toolbar, click Process.
For example, you can configure a schedule to run the process on that form once a day.
Either triggered automatically or run on the Validate Inventory form (IN505000), the back order
replanning process is performed as follows:
1. For each inventory item being processed, the system selects SO Booked and SO Back Ordered
lines of sales orders. The selected lines are sorted by Ship On date (starting from the earliest
one), allocation type (SO Booked lines go before SO Back Ordered), and the line quantity
starting from greater quantities. SO Booked lines are included in the process to make sure the
units that are booked for earlier created orders are not counted for fulfilling of later created back
orders.
2. The system distributes the available for shipping quantity among the selected lines in their sort
order.
a. The quantities of SO Booked lines are subtracted from the available for shipping quantity
that can be distributed to the next lines.
b. If there is some available for shipping quantity that can be distributed (booked) to an SO
Back Ordered line, the system changes the allocation type of the line to SO Booked. For
lines with the Ship Complete shipping rule the system changes the allocation type to SO
Booked only if the line quantity can be booked in full.
3. Available for shipping quantity might not be enough to distribute among all the selected lines. In
this case, the remainder lines preserve the original SO Booked or SO Back Ordered status. Each
processed line is always replanned or not replanned in full and never split if the quantity that can
be booked for the line is less than the line quantity.
| Step 17.1: Processing Back Orders | 293
Step 17.1: Processing Back Orders

In this step, you will process shipments on different shipping conditions:
1. Process partial shipments with back order of items after the first shipment.
2. Process a single complete shipment by the order that doesn't allow partial shipments.
1. Process Partial Shipments With Back Order

Suppose that a customer wants to buy 5 monitors and 13 leather cases. You notify the customer that
you have only 4 monitors and 12 leather cases in stock, and one more monitor will be available in a
week from now. The customer wants to receive all monitors in a single shipment and agrees to wait
until all of them are available. For leather cases, the customer agrees to take 12 cases now and cancel
the remaining one. You are going to process two shipments by the order and invoice each shipment
individually. Process the order as follows:
1. On the Sales Orders form (SO301000), create the sales order with the following information:
a. Order Type: SO
b. Customer: C000000001 (RegularCo)
c. Date: 10/7/2014
d. Requested On: 10/7/2014
2. On the Shipping Settings tab, notice that the Shipping Rule is set to Cancel Remainder (see
the screenshot below).
3. On the Document Details tab, add the items to the order as follows:
Inventory ID: MONITOR26, UOM: PC, Quantity: 5.00, Shipping Rule: Ship Complete
The Ship Complete rule specifies that this line has to shipped in full. The line won't be
added to a shipment until the full quantity can be shipped.
Inventory ID: LEATHCASE, UOM: PC, Quantity: 13.00, Shipping Rule: Cancel
Remainder
The Cancel Remainder rule specifies that this line can be shipped in part and the remaining
part will be canceled.
The default shipping rules for the order header and lines are taken from the Shipping Rule setting
on the Delivery Settings tab of the Customers form (AR303000).
4. Clear the Hold check box and save the order with the Open status (see the screenshot below).
As soon as you save the order, the open quantities of the items become classified to the SO
Booked allocation type, which you can view on the Inventory Allocation Details form (IN402000).
5. Select Actions > Create Shipment to create the shipment of leather cases. In the Specify
Shipment Parameters dialog, make sure the shipment date is 10/7/2014 and click OK.
The system creates the partial shipment that opens on the Shipments form (SO302000).
6. On the Shipments form (SO302000), review the shipment and make sure it contains one line
with 12 leather cases to be delivered to the customer (see the screenshot below). The line for
monitors hasn't been added to the shipment because the line's shipping rule specifies that the
monitors have to be shipped only in full quantity.
7. On the Inventory Allocation Details form (IN402000), select the LEATHCASE item and notice that
the quantity of the open shipment is classified to SO Allocated. One open unit in the order line
remains on SO Booked (see the screenshot below).
8. Double-click the shipment line in the table to navigate to the shipment on the Shipments form
(SO302000).
9. On the Shipments form (SO302000), select Actions > Confirm Shipment.
10. After the shipment is confirmed, go back to the order on the Sales Orders form (SO301000).
During the shipment confirmation process, one unit of LEATHCASE has been canceled and Open
Qty of the line is now equal to zero (see the screenshot below). The MONITOR26 line remains
open, and the order has been assigned the Back Order status because of the open line that
hasn't been shipped.
11. On the Inventory Allocation Details form (IN402000), select the MONITOR26 item and notice
that the quantity of the order line that hasn't been shipped has been classified to SO Back
Ordered.
Once the order is assigned the Back Order status, the open quantities of the order lines become
classified to SO Back Ordered allocation type. According to the settings of the item class to
which the MONITOR26 item is assigned, the SO Back Ordered subtotal is included in the total
deduction that reduces the available quantity of the item (see the screeenshot below). Back
ordered quantity doesn't affect the available for shipping quantity.
12. On the Shipments form (SO302000), select the shipment of leather cases and select Actions >
Prepare Invoice on the toolbar to create the invoice for the shipment.
13. Release the invoice that opens on the Invoices form (SO303000).
14. Click the order number link in the invoice line to navigate to the order on the Sales Orders form
(SO301000).
15. On the Shipments tab, review the links to the invoice and to the inventory issue that has been
created on release of the invoice (see the screenshot below).
Now process the receipt of monitors and the second shipment by the order:
1. On the Inventory Preferences form (IN101000), make sure the Replan Back-Orders check box
is selected.
You can create shipments from back orders as soon as the items have been received to
inventory and have become available for shipping. For mass-creating shipments for sales orders,
you need to replan back orders so that the order lines have the SO Booked or SO Allocated
allocation type. Allocation type update from SO Back Ordered to SO Booked is called "replanning
of back orders" in the system. You have selected the Replan Back-Orders check box to enable
automatic replanning of back orders in the system on release of every inventory transaction that
increase inventory for particular items.
2. On the Receipts form (IN301000), create and release the receipt of monitors:
Date: 10/14/2014

Description: Monitors
Transaction Details tab, Inventory ID: MONITOR26, UOM: PC, Quantity: 10.00
3. On the Inventory Allocation Details form (IN402000), select the MONITOR26 item and notice
that the quantity of the order line has been reclassified from SO Back Ordered to SO Booked.
The SO Back Ordered units have been replanned on release of the inventory receipt after more
units of this item have been received. Automatic replanning was triggered because the Replan
Back-Orders check box is selected on the Inventory Preferences form (IN101000). Now the
shipment can be created for SO Booked units.
4. Double-click the order line to navigate to the order on the Sales Orders form (SO301000).
5. On the Sales Orders form (SO301000), select the order and select Actions > Create Shipment
on the toolbar and create the shipment with the 10/14/2014 date.
The shipment of five monitors has been created and opened on the Shipments form
(SO302000).
6. Confirm the shipment and navigate to the order on the Sales Orders form (SO301000).
The open quantity of the line with the MONITOR26 item is zero (see the screenshot below). The
order is assigned the Completed status because all required items have been shipped by the
order and all order lines have been completed.
7. On the Shipments tab, review the list of shipments that have been created by the order.
In the same way as you have processed the invoice for the first shipment, you can now process
the invoice for the second shipment. However, you don't have to do this at the moment.
2. Process a Single Complete Shipment

Suppose that another customer wants to buy 5 monitors and 13 leather cases on 10/14/2014. You
notify the customer that there are no leather cases currently in stock (considering the available for
shipping quantity), but you can ship all the requested monitors. The customer wants the entire order to
be delivered as a single shipment and prefers to wait until the leather cases are available. The customer
agrees to wait until 10/20/2014, you have to ship the order by that time. The customer wants exactly 5
monitors and can take fewer leather cases. Process the order as follows:
1. On the Sales Orders form (SO301000), create the sales order with the following information:
a. Order Type: SO
b. Customer: C000000003 (EarlyCo)
c. Date: 10/14/2014
d. Requested On: 10/20/2014
2. On the Shipping Settings tab, set Shipping Rule to Ship Complete because the customer
wants to receive the order in a single shipment (see the screenshot below).
3. On the Document Details tab, add the items to the order as follows:
Inventory ID: MONITOR26, UOM: PC, Quantity: 5.00, Shipping Rule: Ship Complete
Inventory ID: LEATHCASE, UOM: PC, Quantity: 13.00, Shipping Rule: Cancel
Remainder
Notice that the Ship On date has been set to 10/20/2014, which equals the Requested On
date in the line, which has been copied from the order summary.
4. Clear the Hold check box and save the order with the Open status (see the screenshot below).
5. Analyze the situations in which the shipment won't be created from that order, pay attention to
the error messages:
a. On the form toolbar, select Actions > Create Shipment and in the Specify Shipment
Parameters dialog, specify the 10/14/2014 and click OK to attempt to create the
shipment.
The system doesn't create the shipment because there are no lines with the Ship On
date due 10/14/2014. The lines have to be shipped later, on 10/20/2014.
b. On the form toolbar, select Actions > Create Shipment and in the Specify Shipment
Parameters dialog, specify the 10/20/2014 and click OK to attempt to create the
shipment again.
Now lines with the 10/20/2014 ship on date could have been added to the shipment.
However, the shipment hasn't been created because one of the lines cannot be shipped.
The header shipping rule Ship Complete requires that the shipment has to be created with
all lines from the order. The available for shipping quantity of the LEATHCASE item is zero,
and the line even partially cannot be shipped at the moment. Because the LEATHCASE
line cannot be shipped, the shipment is not created at the moment.
The order retains the Open status because the shipment is not created.
6. Suppose that on 10/20/2014, you received 12 leather cases that you can ship to the customer.
On the Receipts form (IN301000), create and release the receipt of leather cases:
Date: 10/20/2014
Transaction Details tab, Inventory ID: LEATHCASE, Quantity: 12, UOM: PC, Unit
Cost: 90.00
After the receipt is released, the on-hand quantity of LEATHCASE item becomes equal to 12
units; these units are now available for shipping.
7. Select the open order on the Sales Orders form (SO301000).
8. Select Actions > Create Shipment and specify the 10/20/2014 date in the dialog.
The shipment is created because all lines of the order can be shipped. The LEATHCASE item is
partly shipped according to the Cancel Remainder rule of the order line.
9. On the Shipments form (SO302000), review the created shipment.

For the LEATHCASE line, the system added 12 available leather cases to the shipment (see the
screenshot below); the missing one will be canceled on shipment confirmation.
10. Confirm the shipment, make sure all lines of the order are completed and have zero open
quantities, and the order is assigned the Completed status.
You don't have to process the invoice at the moment.
Availability of the Create Shipment action is defined in automation step settings. By default, the settings
specify that for SO order type, the Create Shipment action is available for orders with the Open and
Back Order statuses on the Sales Orders form (SO301000) and on the Process Orders form (SO501000).
Automation step settings are outside of the scope of this course.
Related Links
| Step 17.2: Correcting a Shipment | 301
Step 17.2: Correcting a Shipment

You can make changes to a shipment while it is in the Open status. You can still correct the shipment
after it has been confirmed before the invoice and inventory issue are created. For a shipment with
the Confirmed status, you can invoke the Correct Shipment action to move the shipment back to the
Open status to be able to make changes to it.
Suppose that you want to correct line descriptions in the shipment that you have just confirmed.
Perform the following actions to correct the shipment:
1. On the Shipments form (SO302000), select the shipment of 17 units of monitors and leather
cases to EarlyCo and select Actions > Correct Shipment on the form toolbar.
The shipment is assigned the Open status. You can now modify or remove the shipment if you
decide to re-create one.
2. Change the descriptions of lines to Monitors and Leather cases and confirm the shipment
again (see the screenshot below).
The shipment is assigned the Confirmed status, and now the invoice can be created.
3. Prepare the invoice for the shipment and release the invoice.
You cannot correct a shipment in the following cases:
You have released the invoice for the shipment. (If you haven't released the invoice yet, you can
remove the invoice, correct the shipment, and create the invoice again.)
You have created the inventory issue by the shipment. (Balanced inventory transactions created
by a shipment cannot be removed from the system.)
A subsequent shipment was created by the order. For example, on the following screenshot, you
can see shipment #000023, which cannot be corrected because the next shipment exists. (You
can remove the subsequent shipment, if possible, to be able to make corrections to the previous
shipment.)
| Step 17.2: Correcting a Shipment | 302
Figure: Preceding shipment cannot be corrected
Related Links
| Step 17.3: Correcting an Invoice | 303
Step 17.3: Correcting an Invoice

If you need to correct the amount of a released invoice, you can process an order of the Credit Memo
(CM) type to adjust the receivable amount on the customer account. You might also need to correct the
inventory issue that has been generated on release of the invoice. In the credit memo, you can specify
the quantity that will be returned to inventory. The original invoice contains the information about the
unit cost, and when you select an invoice line in the credit memo order, the unit cost from the invoice
line is copied to the order line and further used in the inventory issue that adds the specified quantity
and cost back to inventory on release of the credit memo.
To reduce only the receivable amount, you can process a credit memo with zero quantity. In this case,
the system generates the transaction to the sales account and AR account, and doesn't generate the
inventory issue.
Suppose that on 10/21/2014, the EarlyCo customer has reported that one of the leather cases is
missing in the shipment that the customer has received. You agreed to issue a credit memo to apply
against the invoice and you don't need to update inventory. Perform the following actions:
1. Run the Inventory Valuation report (IN615500) and find the on-hand quantity of the LEATHCASE
item. Notice that you have zero units on hand at the moment.
2. On the Customer Details form (AR402000), select the EarlyCo customer and find the invoice in
the amount of $5553 for five monitors and 12 leather cases.
3. On the Order Types form (SO201000), activate the CM order type with the same parameters as
ones that you have specified for the SO order type:
Active: Selected
General Settings tab, Use the Sales Account from: Posting Class
4. On the Sales Orders form (SO301000), create a CM order to EarlyCo with the following
information:
Order Type: CM
Customer: EarlyCo
Date: 10/21/2014
Description: Credit memo for the lost unit
5. On the Document Details tab, click Add Invoice, select the LEATHCASE line of the invoice
issued to EarlyCo (see the screenshot below), and click Add & Close in the dialog.
The Add Invoice Details dialog shows invoices that have been released and the invoice lines
for which the corresponding inventory transactions have been created and released. When
you add an invoice line to the credit memo order by using this dialog, the quantity, unit price,
discount amount, and the unit cost are copied from the invoice line to the CM order line.
6. Specify zero Quantity in the line and set Ext. Price to 109.00, as the screenshot below shows.
In the Ext. Price box, you have specified the amount that will be credited to the AR account on
release of the credit memo. To adjust only the receivable amount without updating inventory,
you have specified zero quantity in the line. The system will not generate the inventory issue for
zero quantity in the credit memo line.
7. Select Actions > Prepare Invoice to create the credit memo.

The created credit memo opens on the Invoices form (SO303000) as the screenshot below
shows. The sales account in the credit memo line has been retrieved from the posting class
according to the Use Sales Account from setting of the CM order type on the Order Types form
(SO201000).
8. Release the memo.

On release of the credit memo, the system generates the GL transaction that reduces the sales
revenue amount by the amount of the credit memo. You can review the GL transaction by
clicking the batch number link on the Financial Details tab:
432000 - Sales - Supplements Dr, $109
110000 - Accounts Receivable Cr, $109
9. On the Customer Details form (AR402000), select the EarlyCo customer.
The list of open documents of the customer contains the credit memo in the amount of -$109
10. Apply the credit memo to the invoice:

a. On the Payments and Applications form (AR302000; Distribution > Sales Orders > Work
Area > Enter), select the credit memo to EarlyCo, specify the 10/21/2014 application
date and 10-2014 application period.
b. On the Documents to Apply tab, select the invoice and release the application.
c. Select Inquiries > Customer Details on the form toolbar to navigate to the Customer
Details form (AR402000).
Notice that the invoice balance has been reduced by the amount of the credit memo
($109) and now equals $5444, and the credit memo is closed.
11. On the Sales Orders form (SO301000), select the CM order.
12. On the Shipments tab, review the link to the credit memo that has been processed by the
order, and notice that the inventory issue hasn't been produced (see the screenshot below).
The system hasn't generated the inventory issue because of the zero quantity in the credit
memo line.
13. Run the Inventory Valuation report (IN615500) and make sure the on-hand quantity and total
cost of the LEATHCASE item remains zero.
Now the process is complete. You have applied the credit memo to the invoice to adjust the original
amount of the invoice.
Related Links
Invoices (SO303000)
| Step 17.4: Processing Scheduled Shipments | 307
Step 17.4: Processing Scheduled Shipments

When you create the shipment by processing an order on the Process Orders form (SO501000), the
following differences in comparison to creation of the shipment by processing of a single order on the
Sales Orders form (SO301000) take place:
If the available for shipping quantity is not enough to create a shipment:
On the Sales Orders form (SO301000), the shipment is not created, and the error message
appears. The order retains the Open status.
On the Process Orders form (SO501000), the shipment is not created, the sales order is
assigned the Back Order status, and the line quantities become classified to the SO Back
Ordered allocation type.
When the system selects order lines for shipment:
On the Sales Orders form (SO301000), the lines for shipment are filtered by the Ship On
date of the line. The system selects lines with the Ship On date that is less or equal to the
date that the user specifies in the Specify Shipment Parameters dialog. The shipment
date is set to the date from the dialog.
On the Process Orders form (SO501000), the selection of lines and the shipment date
depend on the header shipping rule of the order:
If the header shipping rule is Back Order Allowed, the system creates the shipment
only for requested lines. The system selects the lines with the Ship On date that is no
later than the Shipment Date specified on the form. The shipment date is set to the
date from the Shipment Date box on the form.
If the header shipping rule is other than Back Order Allowed, the system creates the
maximum shipment by the order to be shipped on the latest possible date. The system
selects all lines of the order and creates the shipment with the shipment date set to
the latest date among the Ship On dates of the selected lines and the date from the
Shipment Date box on the form.
Start Date and End Date are used together with the Select By option on the Process Orders
form (SO501000) to filter the sales orders on the form, and those dates do not affect the
creation of shipments. When you set Select By to Ship Date, the system retrieves the sales
orders with open lines that have the Ship On date between the start date and end date.
A reseller customer wants to buy laptops with regular shipments of the specified quantity twice a month
during the next two months. You negotiated to invoice the customer at the end of each month for the
total amount of two shipments made in that month.
Process the order with scheduled shipments as described below:
1. On the Sales Orders form (SO301000), create the order with the following information:
Type: SO
Customer: RegularCo
Date: 10/15/2014
Requested On: 10/15/2014 (the date of the first shipment)
2. On the Shipping Settings tab, set Shipping Rule to Back Order Allowed to make the system
generate partial shipments by the Ship On schedule specified in the order lines.
3. On the Document Details tab, click Load Records from File and upload the order lines with
the LAPTOP12 item from the Order Scheduled Shipments 10152014.xlsx file as the screenshot
below shows.
The Ship On date of each line, which is used during the shipment creation, is set to Requested
On date that you have uploaded for each line from the file.
4. Save the order with the Open status.

5. On the Process Orders form (SO501000; Distribution > Sales Orders > Processes > Daily),
select the Create Shipment action, specify the 10/15/2014 shipment date, and clear the end
date (see the screenshot below).
Sales orders whose lines have quantities classified to SO Booked or SO Allocated allocation types
are retrieved to the form.
6. Select the order in the list and click Process to generate the first shipment by schedule.
Because the header shipping rule of the order is Back Order Allowed, the system creates the
shipment of lines that have the Ship On date no later than the specified shipment date. In the
created shipment, the shipment date is set to one specified in the Shipment Date box on the
Process Orders form (SO501000).
7. After the process is complete, navigate to the order on the Sales Orders form (SO301000).
The order has been assigned the Shipping status because of the open shipment by the order.
8. Find the link to the generated shipment on the Shipments tab and navigate to the shipment on
the Shipments form (SO302000).
The first shipment of two laptops has been created with the 10/15/2014 shipment date (see the
screenshot below).
9. Confirm the shipment.

After you confirm the shipment, the first line of the order becomes completed and the order is
assigned the Back Order status (see the screenshot below).
10. Set the business date to 10/30/2014. On the Process Orders form (SO501000), create the next
shipment by the order with the 10/30/2014 shipment date.
11. After the process is complete, open the created shipment on the Shipments form (SO302000).
12. Confirm the shipment of laptops.
Now you can prepare the invoice for both shipments that aren't invoiced yet.
You can prepare invoices by processing shipments or orders. To create one invoice for a number
of shipments by one order, you can process the list of shipments on the Process Shipments form
(SO503000) or process the order on the Process Orders form (SO503000).
When creating an invoice, the system groups the unbilled shipments by customer, invoice date,
order type, order number, the originating branch, document currency, and the billing information
of the order: billing address and billing contact.
On the Order Types form (SO201000), the Bill Separately check box is cleared for the SO order
type, which makes the system group shipments from different SO orders into a single invoice
during mass-creation of invoices. If you want to make the system create an individual invoice for
each SO order, you can select the Bill Separately check box. (You don't have to select the check
box in this course.)
13. On the Sales Orders Preferences form (SO101000), clear the Use Shipment Date for Invoice
Date check box and save the changes.
If the check box is cleared, 1) during mass-creation of invoices on the Process Shipments form
(SO503000), the system combines multiple shipments that may have different dates into a
single invoice with the date specified on the form, 2) on calling the Prepare Invoice action on
the Shipments form (SO302000), the system creates an invoice with the current business date.
If the Use Shipment Date for Invoice Date check box is selected, the system creates invoices
with dates that match the dates of the shipments.
14. Process the two shipments into a single invoice:
a. On the Process Shipments form (SO503000), select the Prepare Invoice action and set
the Invoice Date to 10/30/2014.
b. Select the two last shipments to RegularCo made on 10/15/2014 and 10/30/2014 and
click Process on the form toolbar (see the screenshot below).
The system creates the invoice for all unbilled shipments selected on the form and sets
the invoice date to the specified one.
c. After the process is complete, click either shipment that has been processed and find the
link to the invoice on the Orders tab of the Shipments form (SO302000).
d. The system has prepared one invoice with the 10/30/2014 date with the lines of two
processed shipments (see the screenshot below).
Do not release the invoice at the moment.
Related Links
Process Shipments (SO503000)
| Step 17.5: Processing a Single Shipment for a Number of Orders | 311
Step 17.5: Processing a Single Shipment for a Number of

Orders
Suppose that the RegularCo customer places two orders one shortly after another, and the customer
wants to combine them into a single shipment:
1. On the Sales Orders form (SO301000), create the order for computer mouse with the following
information and save the order with the Open status (see the screenshot below):
Order Type: SO
Customer: RegularCo
Date: 11/1/2014
Document Details tab:
Inventory ID: MOUSE
UOM: PC
Quantity: 2.00
2. Copy-paste the order to create one more order from the same customer. Save the second order
with the Open status too.
3. Create a single shipment for two orders:
a. On the Process Orders form (SO501000), select the Create Shipment action, set the
Shipment Date to 11/1/2014 and click Process All to process the orders as the
When creating a shipment, the system groups the orders by customer, warehouse, order
type, shipment date, and shipping information: shipping address and shipping contact.
The shipment date depends on the header shipping rule, which is Cancel Reminder for the
two orders that you are processing. For such orders, the system creates the maximum
shipment to the latest possible Ship On date of the order lines, which is 11/1/2014 for
both orders.
For each order type, on the Order Types form (SO201000), you can use the Ship
Separately check box to specify whether the shipments by an order of that type can be
grouped with the shipments by any other orders. For the SO order type, the check box is
cleared by default and the shipments can be grouped into one.
| Step 17.5: Processing a Single Shipment for a Number of Orders | 312
4. After the process is complete, click the link to either order to navigate to the Sales Orders form
(SO301000).
5. On the Shipments tab, find the link to the shipment that has been created by the order and
navigate to the shipment on the Shipments form (SO302000).
The shipment contains the lines from two orders (see the screenshot below).
Do not confirm the shipment at the moment.
Related Links
Process Orders (SO501000)
Linking a Sales Order to a Purchase Order
You can create a purchase order once an item is needed to fulfill a sales order, and link the orders for
tracking. You can also allocate items for sales orders while these items are on purchase receipts. For
more information, see Links Between Sales Orders and Purchase Orders in the Acumatica ERP User
Guide.
Automation Steps
The availability of actions that can be performed for sales orders and shipments while they are assigned
different statuses can be adjusted by means of automation step configuration. For more information,
see Automation (Overview) in the Acumatica ERP User Guide.
Lesson Summary
In this lesson, you have learned to process back orders with different shipping rules. You have also
learned to correct a shipment, which can be modified even after it has been confirmed. You can correct
a shipment before the invoice is released and the inventory issue is created.
To correct the invoice amount after the invoice has been released, you can process an order of the
CM (Credit Memo) type. If you want to correct only the invoice amount, you can specify the needed
amounts as extended prices of the credit memo lines and leave zero line quantities. In this case, the
system creates the credit memo by the order and doesn't generate any inventory issue to update
inventory.
You can process single shipments for multiple orders as well as single invoices for multiple shipments.
| Lesson 18: Sales Returns | 315
Lesson 18: Sales Returns

In this lesson, you will learn to process sales returns on different conditions. The sales return process is
also known as Return Merchandise Authorization (RMA).
Lesson Objectives
Process a return for credit
Process a return for cash
Process a return for replacement

| Order Types for Returns | 316
Order Types for Returns

You can process a return for credit, cash, or replacement. In the system, either type of sales return
can be processed through a simple flow, when you create a return order and then process the invoice
directly from the order, or through the full flow, when you process the receipt of the returned item,
process the shipment of the replacement one, and then prepare the invoice. The diagram below shows
the predefined order types that you can use for processing each type of return with or without the
receipt and shipment processing. The system provides return order types for the most frequently used
processes; you can adjust their settings or configure your own order types, if needed. To be able to
create more order types, you need the additional Custom Order Types feature of the Distribution suite,
which is outside of the scope of this course.
If you process a return for replacement, there are different options depending on whether you need to
issue an invoice or not.
If you are processing a return with the receipt and shipment, you can use the following order types:
If you are exchanging an item for an item with the same price and you don't need to process an
invoice or credit memo, you can use the RR order type.
If you are exchanging an item for an item with a greater price, or charge a restocking fee so that
you need to issue an invoice, you can use the RM order type, which allows you to add a receipt
line, issue line, and fees to the order. The RM order type requires the issued amount (replacement
items plus fees) to be greater than the receipt amount in the order.
If you are exchanging an item for an item at a lower price, you can configure an order type that
produces a credit memo to the difference between the receipt and issue lines in the order. See
Appendix D: Custom Order Types for Sales Returns.
To process a return for replacement without the processing of the receipt and shipment, you can
configure the needed order types, see Appendix D: Custom Order Types for Sales Returns.
After the sales return is processed, the next step could be one of the following:
Processing an inventory issue of the returned item to write-off the loss.
Processing a purchase return of the item to the vendor.
| Order Types for Returns | 317
Restocking the returned item to inventory.

The first two processes have already been demonstrated in the previous lessons. As for the last option,
in the examples of this course, you receive the returned items directly to available stock, so that by the
books you are restocking the items immediately upon the processing of the inventory transaction for
receipt. In a configuration with warehouse locations, you can configure a dedicated location for sales
returns and exclude that location from available stock. You can process receipts of returned items to
that location, and then you can choose the next processing step for each of the returned items: transfer
the item from that location to an available stock location to restock the item, write off the loss, or
return the item to the vendor. The use of warehouse locations is outside of the scope of this course.
| Step 18.1: Processing a Return for Credit | 318
Step 18.1: Processing a Return for Credit

Suppose that MyCompany provides a generous return policy for laptops and leather cases. Customers
can exchange a laptop or receive a store credit or cash refund within 14 days if they are not entirely
satisfied with the purchase.
Suppose that on 10/12/2014, the RegularCo customer returns the laptop purchased on 10/1/2014 and
one of the leather cases purchased on 10/7/2014. You authorize these returns because they satisfy the
policy (12 and 6 of 14 days passed respectively).
Process the returns for credit. There are two options how you can process these returns in the system
with the receipt and shipment processing and without by creating the credit memo directly from the
return order.
1. Process the return for credit with issuing the credit memo directly from the return order (CM
order type).
2. Process the return for credit with the receipt and shipment processing before the credit memo is
issued (RC order type).
1. Return for Credit With the Direct Credit Memo

Process the return for credit without a receiptthat is, process the CM order to return the laptop to
inventory and issue the credit memo to the customer. You have already activated the CM order type, so
you can proceed to creating the order:
1. On the Sales Orders form (SO301000; Distribution > Sales Order > Work Area > Enter), create
the return order with the following information:
Order Type: CM
Customer: RegularCo
Date: 10/12/2014
Description: Authorized return for credit
2. On the Document Details tab, click Add Invoice, and in the Add Invoice Details dialog box,
select the invoice with the 10/1/2014 date and select the line with the LAPTOP14 item, by which
you are processing the return (see the screenshot below).
Figure: Selecting the invoice line
You can process a return without a link to the original invoice. For example, the link might not be
available if you are processing a return by the invoice that wasn't migrated to the new system.
3. Click Add & Close to add the laptop to the order and close the dialog.
The line with one 14-inch laptop at the $1400 unit price and $1150 unit cost has been copied
from the invoice to the order. The credit amount is calculated based on the unit price or can be
specified directly in the Ext. Price box; the quantity and the unit cost of the line will be used to
update inventory (see the screenshot below).
4. Save the created order with the Open status.

You can set up the approval process of return orders. For more information, see the reference in
Additional Information section of this lesson.
Figure: Order line copied from the invoice
5. On the form toolbar, click Actions > Prepare Invoice.

The system generates the credit memo for one unit of LAPTOP14 in the amount of $1400 and
displays the memo on the Invoices form (SO303000).
6. On the form toolbar, click Actions > Release to release the credit memo.
The system has generated the GL transactions to the AR account and sales account and the
inventory transaction to return the laptop to inventory.
7. On the Financial Details tab, click the Batch Nbr. link and review the created GL transaction
on the Journal Transactions form (Gl301000):
431000 - Sales - Laptops Dr, $1400.00
110000 - Accounts Receivable Cr, $1400.00
8. On the Customer Details form (AR402000; Finance > Accounts Receivable > Work Area >
Explore), in the Customer box, select the RegularCo customer and find the open credit memo.
The customer balance has been reduced by the amount of the credit memo, $1400.00. The
original invoice hasn't been paid yet, and you have decided to apply the credit memo against the
invoice. (If the invoice was paid, you could process the refund.)
9. Apply the credit memo to the invoice as follows:
a. On the Payments and Applications form (AR302000), select the credit memo created
earlier and specify the following information:
Type: Credit Memo
Reference Nbr: (select the number of the credit memo)

Application Date: 10/12/2014
Application Period: 10/2014
b. On the Documents to Apply tab, select the invoice that was processed on 10/1/2014.
Full amount of the credit memo has been automatically suggested in the Amount Paid
box to apply to the invoice, $1400.
c. On the form toolbar, click Release to release the application.
d. On the form toolbar, click Inquiries > Customer Details to navigate to the Customer
Details form (AR402000). Notice that the credit memo has been closed and the invoice
balance has been reduced to $52.00.
10. On the Sales Orders form (SO301000), open the CM order that you have processed for the
return from RegularCo.
11. On the Shipments tab, click the Inventory Ref. Nbr. link to the inventory transaction that has
been generated on release of the credit memo.
The system has generated and released the inventory issue with the Credit Memo transaction
type in the line, which returns the $1150.00 cost to inventory and subtracts the cost from the
cost of goods sold.
In a configuration with warehouse locations, you can configure a dedicated location for sales
returns and receive the returned items to that location, which can be separate from stock and not
counted as available for shipping. (In that case, you could specify the location in the CM order.)
The items can be regularly reviewed in that location and either placed back to stock, returned to a
vendor, or written off.
12. On the Inventory Transaction History form (IN405000; Distribution > Inventory > Work Area
> Explore), in the Inventory ID box, select the LAPTOP14 item, and in the Start Date box,
specify 10/12/2014, to review the issue transaction with the Credit Memo type that returned one
unit to inventory.
With the standard functionality of the Distribution suite, you can use only predefined order types in the
Sales Orders module. With the additional Custom Order Types feature, you can create your own order types
based on the predefined order templates. Thus, based on the CM (Credit Memo) template, for example,
you can create one order type for credit memos issued for correcting amounts in invoices, and another one
for credit memos issued for returns. In this course, you are using only predefined order types and use the
same CM order type for processing invoice corrections and returns for credit.
2. Return for Credit With the Receipt Processing

Process the return for credit through the receiptthat is, process the RC order to return the laptop to
inventory and issue the credit memo to the customer, as follows:
for the RC order type, specify the same parameters as those that you have specified for the SO
order type:
Active: Selected
2. Click Save to save your changes.
Order Type: RC
Customer: RegularCo
Date: 10/12/2014
Description: Authorized return for credit
4. On the form toolbar of the Document Details tab, click Add Invoice. In the opened Add
Invoice Details dialog box, select the invoice with the 10/7/2014 date and select the line with
the LEATHERCASE item, for which you are processing the return.
5. Click Add & Close to add the case to the order and close the dialog. The line with twelve leather
cases at the $109 unit price and $90 unit cost has been copied from the invoice to the order.
6. Enter 1 as the Quantity of the line.
7. Click Save to save the order with the Open status.

Now you have to process the receipt of the returned unit before you can create the credit memo.
8. On the form toolbar, click Actions > Create Receipt, and specify the 10/12/2014 date to create
the incoming shipment.
The system creates the incoming shipment (which is a shipment with the Receipt operation type)
that opens the Shipments form (SO302000), as shown in the screenshot below.
Figure: Shipment with the Receipt operation type
9. On the form toolbar, click Actions > Confirm Shipment.
10. Set the business date to the date of the shipment, 10/12/2014.
Currently, the Use Shipment Date for Invoice Date check box is cleared on the Sales Orders
Preferences form (SO101000). If the check box is cleared, the system uses the business date for
the invoice date when you create the invoice from the Shipments form (SO302000).

The system generates the credit memo in the same way as it was described for the CM order
just before. From here, the processing steps are similar to ones described above (you have to
release the credit memo, then you can apply the memo against the invoice or process a refund).
You don't have to process the credit memo further.
12. Save the memo with the Balanced status and proceed to the next example.
Related Links
Predefined Order Types for Customer Returns
| Step 18.2: Processing a Return for Cash | 323
Step 18.2: Processing a Return for Cash

In this step, you will process a return for cash. With predefined order types, you can use the CR (Cash
Return) order type to process cash returns without the processing of the incoming shipment. With the
additional Custom Order Types feature, you can configure an order type for processing cash returns
through the incoming shipment, if needed. Configuring custom order types is outside of the scope of
this course.
Earlier you have processed a cash sale to RegularCo with the 10/3/2014 date, for which you can now
process a return. Suppose the customer returns the laptop on 10/12/2014, and you authorize the
return. Process the cash return without the processing of the incoming shipment as follows:
1. On the Order Types form (SO201000; Distribution > Sales Orders > Configuration > Setup), for
the CR order type, specify the following settings as the screenshot below shows:
Active: Selected
General Settings tab, Use Sales Account from: Reason Code
According to the default settings of the CR (Cash Return) order template, which you can view on
the Template Settings tab of the Order Types form (SO201000), reason code is required for
processing cash returns. Suppose that instead of debiting the sales account, you want to record
the return amount to a dedicated contra revenue account. The sales account from the reason
code that you select in an order line will be inserted into the AR document only if the Use Sales
Account from setting is set to Reason Code in the order type.
Figure: CR order settings
2. Click Save to save your changes.

create the SORETURN reason code with the following information, as shown in the screenshot
below:
Reason Code: SORETURN
Description: Sales return
Usage: Sales
Account: 495000 (Sales Returns)
Figure: Reason code that specifies the sales account for use in sales returns
With this reason code, the system will use the following accounts in the GL transaction generated
from a credit memo:
AR account, Cr
495000 - Sales Returns, Dr
And the following accounts will be used in the GL transaction generated from a cash return:
Cash account, Cr
495000 - Sales Returns, Dr
4. On the Sales Orders form (SO301000; Distribution > Sales Orders > Work Area >Enter), create
Order Type: CR
Customer: RegularCo
Date: 10/12/2014
Description: Authorized return for cash
5. On the table toolbar of the Document Details tab, click Add Invoice.
6. In the opened Add Invoice Details dialog, in the Type box, select Cash Sale.
7. In the Reference Nbr. box, select the cash sale document by which you are making the return.
8. In the list of the document lines, select the line with the LAPTOP12 item and click Add & Close
to copy the information to the order and close the dialog.
The line with one 12-inch laptop at the unit price of $1160.00 has been copied from the cash
sale document to the order.
9. In the Reason Code box of the order line, select the SORETURN reason code (see the
screenshot below).
10. On the Payment Settings tab, specify the following payment settings:
Payment Method: CASH
Cash Account: 101000 - Cash on Hand USD (inserted automatically)
Payment Ref: 000002
11. Click Save to save the created order with the Open status.
Figure: Order line with the specified reason code
12. On the form toolbar, click Actions > Prepare Invoice. The system generates the cash return
document and opens the document on the Invoices form (SO303000), as the screenshot below
shows.
The 495000 - Sales Returns account specified in the document line has been retrieved from the
reason code according to the Use Sales Account from setting of the CR order type.
Figure: Cash return document
13. On the form toolbar, click Actions > Release to release the cash return document.
On release of the cash return document, the system performs the following actions:
Generates the transaction to the cash account and the account specified in the document
line.
Generates the inventory issue transaction with the Credit Memo transaction type. This
transaction adds the cost back to inventory and produces the GL transaction to the
inventory account and the COGS account retrieved from the source according to the
posting class settings to which the inventory item is assigned.
14. On the Financial Details tab, click the Batch Nbr. link and review the transaction on the
Journal Transactions form (GL301000):
101000 - Cash On Hand, Cr, $1160.00
495000 - Sales Returns, Dr, $1160.00
15. On the Sales Orders form (SO301000), open the CR order that you have created earlier, and on
the Shipments tab, click the link in the Inventory Ref. Nbr. column of the only row to open
the inventory issue transaction on the Issues form (IN302000).
16. On the Financial Details tab, click the Batch Nbr. link and review the generated transaction on
the Journal Transactions form (GL301000):
130000 - Merchandise Inventory, Dr, $962.50
530000 - Cost of Goods Sold, Cr, $962.50
> Explore), in the Inventory ID box, select the LAPTOP12 item, in the Start Date box,
specify 10/12/2014, and review the transaction that has been generated from the cash return.
Inventory issue with the Credit Memo transaction type increased the ending inventory by one
unit at the cost of $962.50.
Figure: Inventory issue for the cash return
Related Links
| Step 18.3: Processing a Return for Replacement | 327
Step 18.3: Processing a Return for Replacement

In this step, you will perform the following tasks:
1. Configure the RR (Return for Replacement) order type for processing return orders with
automatically created issue line.
2. Process a return for replacement of an item for an item at the same price (no invoice needed).
3. Process a return for replacement of an item for an item with a greater price (invoice needed).
1. Configure the RR Order Type

Configure and activate the RR (Return for Replacement) order type as follows:
for the RR order type, specify the same parameters as those that you have specified for the SO
order type:
Active: Selected
2. On the Template Settings tab, configure the order template for automatic adding of the issue
line to RR orders:
a. For the Issue operation, clear the Active check box.

If this check box is cleared, issue (replacement) lines cannot be manually added to the
order during the data entry on the Sales Orders form (SO301000). Because you are going
to specify automatic creation of the issue line, the manual entry is not needed.
b. For the Receipt operation, select the Auto Create Issue Line check box (see the
screenshot below).
If this check box is selected, the system adds the issue line to the order automatically
upon the confirmation of the receipt shipment. Users will be able to change the inventory
ID and quantity in the added line, if needed, and then create the shipment of the
replacement item.
Figure: Template settings for the RR order type
c. Save your changes.

2. Return for Replacement at the Same Price

Suppose that you authorize the replacement of the computer mouse that was sold to the RegularCo
customer on 10/1/2014 with another one. Process the return for replacement as follows:
Order Type: RR
Customer: RegularCo
Date: 10/12/2014
Description: Authorized return for replacement at the same price
2. On the table toolbar of the Document Details tab, click Add Invoice, and in the opened Add
Invoice Details dialog box, select the invoice with the 10/1/2014 date, and select the line with
the MOUSE item for which you are processing the return.
3. Click Add & Close to copy the information to the order and close the dialog (see the screenshot
below).
The line with the computer mouse with the unit price of $12.00 and unit cost of $9.95 has been
copied from the invoice to the order. This line is added with the Receipt operation implicitly
because only receipt lines are allowed to be manually added to the RR order according to the
template settings on the Order Types form (SO201000).
Figure: Line copied from the invoice
5. On the form toolbar, click Actions > Create Receipt on the form toolbar, and in the opened
Specify Shipment Parameters dialog box, specify 10/12/2014 as the Shipment Date, and
click OK. The system generates the shipment with the receipt operation that opens on the
Shipments form (SO302000).
6. Verify the receipt quantity of one unit in the Shipped Qty box and on the form toolbar, click
Actions > Confirm Shipment to confirm the receipt shipment.
On receipt confirmation, the system adds the issue line to the order.
7. On the Sales Orders form (SO301000), open the return order that you have created earlier,
and notice that the issue line for the replacement unit is added to the order (see the screenshot
below).
Figure: Order line added for replacement
8. On the form toolbar, click Actions > Create Shipment and in the opened Specify Shipment
Parameters dialog box, specify 10/12/2014 as the Shipment Date, and click OK. The system
generates the shipment for the issue that opens on the Shipments form (SO302000).
9. On the form toolbar, click Actions > Confirm Shipment, to confirm the shipment for issue of
the replacement unit (see the screenshot below).
After you confirm the shipment, the order is completed. However, inventory hasn't yet been
updated with the received and issued units.
Figure: Outgoing shipment with the Issue operation type
10. On the Process Shipments form (SO503000; Distribution > Sales Orders > Processes > Daily), in
the Action box, select the Update IN - Confirmed Not Billable action and clear the End Date to
view all shipments that haven't yet updated inventory.
You can also process particular shipments by clicking Actions > Update IN for the needed
document on the Shipments form (SO302000).
11. On the form toolbar, click Process All (see the screenshot below).
The system generates the inventory issues with the Return and Issue transaction types from the
shipments respectively.
Figure: Processing shipments
12. Click the link to either shipment to open the shipment on the Shipments form (SO302000) and
review the Orders tab. The link to the inventory issue is displayed in the Inventory Ref. Nbr.
column (see the screenshot below).
No invoice can be created for orders of the RR type.
Figure: Link to the inventory issue
> Explore), in the Inventory ID box, select the MOUSE item and review the Return and Issue
transactions that have been generated from the RR order (see the screenshot below).
Review each of the transactions and the GL transactions posted from them. Inventory
transactions were generated and then released one after another in a single processing
operation. The GL transactions were consolidated into a single batch because the Consolidated
Posting to GL feature is enabled in the system. You can identify the source documents by the
reference numbers in the journal entries on the Journal Transactions form (GL301000).
Figure: Return and issue transactions to inventory produced from the receipt and shipment by the RR order
3. Return for Replacement With a Greater Price

Suppose that you authorize the replacement of a leather case for laptops ($109/unit price) sold on
10/7/2014 to RegularCo with a monitor ($849/unit). Because the new amount is greater, you need to
process the invoice in the amount of difference, which is $740 ($849 - $109). Process the return for
replacement with the invoice as follows:
1. Configure and activate the RM (RMA Order) order type as follows:
a. On the Order Types form (SO201000), for the RM order type, specify the same
parameters as those that you have specified for the SO order type:
Active: Selected
b. On the Template Settings tab, in the table with operations, clear the Auto Create
Issue Line check box for the receipt operation, as shown in the screenshot below.
This check box has to be cleared for the RM order template, because users need to select
the replacement item in the order and save the order with the positive order total.
Figure: Template settings for the RM order type
c. Click Save to save your changes.
2. On the Sales Orders form (SO301000), create the return order with the following information:
Order Type: RM
Customer: RegularCo
Date: 10/12/2014
Description: Authorized return for replacement with a greater price
3. On the toolbar of the Document Details tab, click Add Invoice, and in the opened Add
Invoice Details dialog, select the invoice with the 10/7/2014 date, and select the line with the
LEATHERCASE item for which you are processing the return.
4. Click Add & Close to copy the information to the order and close the dialog. The information
from the invoice line has been copied to the order as the line with the Receipt operation type
5. Enter 1 as the line Quantity.
6. Add one more row with the following settings:
Operation: Issue
Inventory ID: MONITOR26
Quantity: 1.00

In the created RM order, the issued amount is greater than the receipt amount so that the
invoice has to be produced.
Figure: Order lines with the returned item and the replacement
8. On the form toolbar, click Actions > Create Receipt, and in the opened Specify Shipment
Parameters dialog box, specify 10/12/2014 as the Shipment Date, then click OK. The system
generates the shipment with the receipt operation (the incoming shipment) and opens the
document on the Shipments form (SO302000).
9. On the form toolbar of the Shipments form (SO302000), click Actions > Confirm Shipment.
10. On the Sales Orders form (SO301000), open the return order, and on the form toolbar, click
Actions > Create Shipment. In the opened Specify Shipment Parameters dialog box,
specify 10/12/2014 as the Shipment Date, then click OK. The system generates the shipment
with the issue operation (the outgoing shipment) and opens the document on the Shipments
form (SO302000).
11. On the form toolbar of the Shipments form (SO302000), click Actions > Confirm Shipment.
Now you can process the invoice.
12. On the Sales Orders form (SO301000), open the return order that you are processing, and on
the form toolbar, click Actions > Prepare Invoice.
The system creates the invoice in the amount of the return order with the two lines copied from
the shipments and opens the invoice on the Invoices form (SO303000).
13. On the form toolbar of the Invoices form (SO303000), click Actions > Release to release the
invoice.
The system has generated the transactions to the sales account and AR account and generated
the inventory issues that have been released.
14. On the Financial Details tab, click the Batch Nbr. link and review the transaction on the
Journal Transactions form (GL301000):
110000 - Accounts Receivable, Dr, $740.00
432000 - Sales Supplements, Cr, $849.00
432000 - Sales Supplements, Dr, $109.00
15. On the Sales Orders form (SO301000), open the return order, and review the links to the invoice
and inventory issues on the Shipments tab, as shown in the screenshot below.
For the returned item, the system has produced the inventory issue of the Credit Memo
transaction type. For the replacement item, the system has produced the inventory issue of the
Invoice transaction type, which is similar to those generated from regular orders.
Figure: Shipments, invoices, and inventory issues processed by the order
Related Links
Approval of Sales Returns from Customers
You can configure the approval steps that must take place during the return authorization process. The
needed approval steps can be configured for any order types, including regular sales orders. For more
information, see Approval of Sales Orders in the Acumatica ERP User Guide.
Lesson Summary
You can use the following predefined order types for the processing of sales returns:
CM (Credit Memo) order type for returns for credit without shipment processing.
RC (Return for Credit) order type for returns for credit with shipment processing.
CR (Cash Return) order type for returns for cash (without shipment processing).
RR (Return for replacement) order type for returns with a replacement of the returned item with
an item at the same price so that no invoice is needed. The incoming and outgoing shipments are
processed for that type of the order.
RM (RMA order) order type for returns with a replacement of the returned item with an item at a
greater price so that the invoice is issued. The incoming and outgoing shipments are processed
for that type of the order.
| Lesson 19: Sales Orders With Services, Non-Stock, and Charges | 336
Lesson 19: Sales Orders With Services, Non-Stock, and

Charges
In this lesson, you will learn to process sales orders with services and non-stock lines and configure an
automatic calculation of freight costs in sales orders.
Lesson Objectives
In this lesson, you will learn how to perform the following tasks:
Process an invoice for services
Process a mixed order of goods, services, and non-stock
Configure the automatic calculation of the freight costs in a sales order
Process a sales order with automatically calculated freight charges

| Step 19.1: Processing an Invoice for Services | 337
Step 19.1: Processing an Invoice for Services

Suppose that on 11/5/2014, you invoice the EarlyCo customer for computer diagnostic and malware
removal services that you have provided to the customer. Services are presented as non-stock items in
the system that you have already created earlier in this course.
Invoices for services can be processed either from the Invoices and Memos form (AR301000) of the
Accounts Receivable module or from the Sales Orders module. If a company already uses the Sales
Orders module to process sales of stock goods, it might be useful to streamline the processing of all
sales including the sales of services from a single entry point, the Sales Orders module.
You can process invoices for services starting from an order created on the Sales Orders form
(SO301000) or by entering the invoice directly on the Invoices form (SO303000). On the Invoices form
(SO303000), you can select only non-stock items in the document lines, as well as on the Invoices and
Memos form (AR301000).
Process the invoice for services from the Sales Orders module as follows:
1. On the Invoices form (SO303000; Distribution > Sales Orders > Work Area > Enter), create the
invoice with the following information:
Type: Invoice
Customer: EarlyCo
Date: 11/5/2014
2. On the Document Details tab, add the lines with the service items (see the screenshot below):
Inventory ID: DIAGNOSTIC, Quantity: 0.50, UOM: HOUR
Inventory ID: VIRREMOVAL, Quantity: 1.00, UOM: HOUR
The sales accounts in the lines have been retrieved from the posting classes to which the items
are assigned. The items are assigned to the CMPSERVICE posting class, which specifies the
posting class as the source of the sales account.
3. In the invoice summary area, in the Amount box, enter the control amount of 58.50.
4. Clear the Hold check box and save the invoice with the Balanced status as the screenshot below
shows.
On release of the invoice, the system generates the GL transactions to the AR account of the
customer and the sales accounts from the document lines.
| Step 19.1: Processing an Invoice for Services | 338
6. On the Financial Details tab, click the Batch Nbr. link to review the transactions on the
Journal Transactions form (GL301000). The sales accounts are credited with the sales amounts,
and the AR account is debited in the total amount of the invoice:
110000 - Accounts Receivable Dr, $58.50
455000 - Sales - Computer Services Cr, $19.50
No cost transactions are recorded for lines with non-stock items. However, the unit cost information is
saved in the invoice line for information.
After the invoice was released, you can view the document on the Invoices and Memos form
(AR301000) and in the reports and inquiries by the customer documents, for example, on the Customer
Details form (AR402000).
Related Links
Step 19.2: Processing a Mixed Order of Goods and Non-Stock

You can process sales orders that contain multiple lines with goods, services, and non-stock. You can
invoice such order directly or process the order through a shipment. Services and non-stock lines can
be copied to the shipment for printing in the shipment confirmation if requested by customer.
1. Invoice a mixed order directly by using the order of the IN type.
2. Process a mixed order through the shipment by using the order of the SO type.
1. Invoice a Mixed Order Directly

Suppose that on 11/6/2014, the EarlyCo customer buys a laptop with the software installation service,
and you need to invoice the customer for the order without processing a shipment in the system.
Complete the following instructions to process the order:
the order with the following information:
Order Type: IN
Customer: EarlyCo
Date: 11/6/2014
2. On the Document Details tab, add the lines for the items:
Inventory ID: INSTLLTION, UOM: HOUR, Quantity: 1.00
3. Click Save to save the prepared order with the Open status (see the screenshot below).
4. On the form toolbar, click Actions > Prepare Invoice to create the invoice.
The system creates the invoice for the laptop and service and opens it on the Invoices form
(SO303000). You can view the printed form of the invoice by selecting Reports > Print
Invoice.
The system generates the GL transactions to record the revenue amounts and the receivable
amount to the accounts and produces the inventory issue of one laptop from inventory.
6. On the Financial Details tab, click the Batch Nbr. link to review the transactions on the
Journal Transactions form (GL301000). The sales accounts are credited with the sales amounts,
and the AR account is debited in the total amount of the invoice:
110000 - Accounts Receivable Dr, $1199.00
431000 - Sales - Laptops Cr, $1160.00
7. On the Sales Orders form (SO301000), select the IN order that you have just processed and, on
the Shipments tab, find the link to the inventory issue.
8. Click the link to review the inventory issue on the Issues form (IN302000).
The issue of one laptop has been released and the on-hand quantity and the total cost of the
item has been updated in inventory (see the screenshot below).
2. Process a Mixed Order Through the Shipment

You can process mixed orders through shipments so that all lines are copied from the order to a
shipment and further from the shipment to the invoice. To be able to process lines with a non-stock
item through a shipment, you have to select the Require Shipment check box for the item on the
Non-Stock Items form (IN202000). If the check box is selected, the non-stock lines are copied to a
shipment once you create the shipment from an order. If the check box is cleared, the non-stock lines
are not copied to the shipment, however, when you create the invoice by processing the shipment or
order, the unbilled non-stock lines are collected from the order and copied along with the shipment lines
to the invoice.
Suppose that on 11/7/2014, the RegularCo customer buys a laptop with the software installation
service and an Ethernet cable. You are asked to provide the shipment confirmation with full information
by the order along with the invoice to pay. Configure the non-stock items for processing through a
shipment and process the order:
1. On the Non-Stock Items form (IN202000; Distribution > Inventory > Work Area > Manage), for
the INSTLLTION and CABLE items, make sure the Require Shipment check box is selected on
the General Settings tab.
After you have enables the modules of the Distribution suite, newly created items get the Require
Shipment check box selected on the Non-Stock Items form (IN202000) by default.
2. On the Sales Orders form (SO301000), create the order with the following information:
Order Type: SO
Customer: RegularCo
Date: 11/7/2014
3. On the Document Details tab, add the lines for the following items:
Inventory ID: INSTLLTION, UOM: HOUR, Quantity: 1.00
Inventory ID: CABLE, UOM: PC, Quantity: 1.00
4. Clear the Hold check box and save the order with the Open status as the screenshot below
shows.
5. On the form toolbar, click Actions > Create Shipment.
6. In the Specify Shipment Parameters dialog box, specify 11/7/2014 for the Shipment Date,
and click OK. The system creates the shipment with all lines from the order and opens the
shipment on the Shipments form (SO302000). The prepared shipment contains three linesfor
the laptop, software installation service, and the cable as the screenshot below shows.
7. On the form toolbar, click Actions > Confirm Shipment to confirm the shipment.
The shipment gets the Confirmed status.
8. On the form toolbar, click Reports > Print Shipment Confirmation to view the printed form of
the document.
All lines are printed in the shipment confirmation.
9. On the form toolbar of the Shipments form (SO302000), click Actions > Prepare Invoice.
The system creates the invoice with the lines copied from the shipment. Further the invoice is
processed as it is described for the invoice created for the IN order above. You don't have to
release the invoice at the moment; leave the document with the Balanced status.
In the same way as it is shown above in the examples with service non-stock items (INSTLLTION,
DIAGNOSTIC, VIRREMOVAL), you can create non-stock items for different types of extra charges
that you might want to add to sales orders. For example, you can configure a non-stock item for a
restocking fee and use that item to specify the fee in RMA orders. However, for freight charges, there is
the dedicated functionality that is demonstrated in the next step.
Related Links
| Step 19.3: Adding Freight Charges to an Order | 344
Step 19.3: Adding Freight Charges to an Order

You can use a built-in calculation of freight cost in the system as well as set up the system to retrieve
the freight cost from FedEx, UPS, or USPS carriers calculated online based on the delivery address and
the weight and size of the order. Based on the calculated freight cost, you can configure the calculation
of the freight price for the customer, which is specified in the invoice.
In this step, you will set up the built-in calculation of freight costs in sales orders and configure the
calculation of the freight price for a customer based on that cost.
Suppose that MyCompany provides delivery services for customers via a third-party local carrier. At the
end of each month, the carrier bills the company for the orders delivered during that month. The freight
cost that the company pays to the carrier is calculated according to the following rules:
In the nearest zone 1, the cost of delivery is $15 per order.
In farther zone 2, the cost of delivery is $25 per order.
An extra charge of $1 per kg applies to a package of more than 5 kg.
No delivery is provided for the customers located farther.
MyCompany calculates the freight price for customers with 10% profit margin:
Freight price is not included in the price of goods and calculated separately for each order.
Freight price is 10% greater than the freight cost. For example, the delivery cost in zone 1 with an
extra weight charge of $10 gives the freight price of $27.5 = ($15 + $10) * 110%.
In this step, you will perform the following tasks:
1. Configure the built-in calculation of freight cost.
2. Configure the calculation of freight price.
3. Configure the order type for the freight cost calculation.
4. Process the order with the automatically calculated freight charges.
1. Configure the Built-In Calculation of Freight Cost

To configure the system for the freight cost calculation, do the following:
1. On the Shipping Zones form (CS207510; Distribution > Sales Orders > Configuration > Setup),
define the zone codes:
Zone ID: ZONE1, Description: Zone 1
Zone ID: ZONE2, Description: Zone 2
2. Click Save to save the created zones (see the screenshot below).
3. On the Ship Via Codes form (CS207500; Distribution > Sales Orders > Configuration > Setup),
define the freight cost calculation codes as follows:
a. Create the LOCAL1 code with the following settings:
Ship Via: LOCAL1

Description: Local carrier zone 1
On the Details tab, specify the following settings (see the screenshot below):
Calculation Method: Per Unit
Base Rate: 15.00
Common Carrier: Cleared
Freight Sales Account: 480000 (Sales - Delivery Services)

This account accumulates the freight revenue from orders where the freight is
charged.

This account is required for the configuration of the ship via code, however it
is not used for transactions processed from the Sales Orders module.
The system does not generate cost transactions for freight. You need to
process the AP bill from the carrier to record the freight expense. You can
create a non-stock item for freight, specify the 580000 - Delivery Services
Expense in the item, and use that item in AP bills from the carrier. (If you
want to process accrual transactions for freight costs, you can set up the
process similar to one demonstrated in Step 12.1: Processing an Expense
Accrual with a Non-Stock Line).
On the Freight Rates tab, add the following row (the freight calculation formula is
provided later in this lesson):
Weight: 5.0; Volume: 0.0; Zone ID: ZONE1, Rate: 1.0
b. Click Save to save the created freight cost calculation code (see the screenshot below).
c. Create the LOCAL2 code with the following settings:

You can copy-paste the LOCAL1 code and change the description, base rate, and zone on
the Freight Rates tab.
Ship Via: LOCAL2
Description: Local carrier zone 2
On the Details tab, specify the following settings:
Calculation Method: Per Unit
Base Rate: 25.00
Common Carrier: Cleared
Freight Sales Account: 480000 (Sales - Delivery Services)
On the Freight Rates tab:
Weight: 5.0; Volume: 0.0; Zone ID: ZONE2, Rate: 1.0
2. Configure the Calculation of Freight Price

Configure the calculation of the freight price with 10% profit margin:
1. On the Shipping Terms form (CS208000; Distribution > Sales Orders > Configuration > Setup),
specify the following settings:
Term ID: FIXRATE
Description: Fixed rate shipping
2. To the price breakdown table on the form, add a row with the following settings (see the
screenshot below):
Break Amount: 0.00
Freight Cost, %: 110.00
Invoice Amount %: 0.00
Shipping and Handling: 0.00

Line Handling: 0.00
If you specify zero percentage in the Freight Cost box, the freight cost will be zero in the order
where you specify the shipping term. For example, to create a term for free shipping of orders
greater than $1000, you can specify 1000.00 in the Break Amount box and leave zero Freight
Cost.
3. Click Save to save the created fixed rate term for calculation of the freight price.
3. Configure the Order Type for Freight Cost Calculation

Finally, you have to specify the source of the freight revenue account and enable the freight cost
calculation for the needed order type. To simplify the processing steps for the example, specify the
settings for the IN (Invoice) order type:
select the IN order type.
2. On the General Settings tab, make sure the Calculate Freight check box is selected.
If the Calculate Freight check box is cleared for an order type, the freight cost is not calculated
for orders of this type.
3. On the General Settings tab, in the Use Freight Account from box, make sure the Ship Via
source is specified.
To the invoice created for an order of this type, the system will retrieve the freight sales account
from the ship via code once the code is specified in the order.
4. Process the Order With the Automatically Calculated Freight Price

Suppose that the RegularCo customer buys a laptop with a delivery in zone 1. The order weight is less
than 5 kg. Process the IN order with the information for freight calculation and analyze how the freight
amount is calculated. To do this, perform the following instructions:
the order with the following information:
Order Type: IN
Customer: RegularCo
Date: 11/8/2014
2. On the Document Details tab, add the line with the following item:
UOM: PC
Quantity: 1
3. Review the Order Total in the document summary.

The order total equals the total extended price of the lines, which is $1160.00 for one laptop at
the moment.
4. On the Shipping Settings tab, specify the following information for the freight calculation (see
the screenshot below):
Ship Via: LOCAL1

The code applies the base rate to the document. The default ship via code is taken from
the customer record on the Customers form (AR303000).
Shipping Terms: FIXRATE

The specified term makes the system apply the freight price calculation rules to the freight
cost. The default shipping terms are taken from the customer record on the Customers
form (AR303000).
Shipping Zone: ZONE1

The specified zone makes the system additionally apply the freight rate that is specified
on the Freight Rates tab of the ship via code (if applicable). The default shipping zone is
retrieved from the customer record on the Customers form (AR303000).
Figure: Shipment settings
5. On the Totals tab, review the calculated freight price that will be invoiced to the customer (see
the screenshot below).
The Freight Cost shows the cost calculated by the specified ship via code and shipping zone
($15.00).
The Per Unit calculation method specifies the calculation of the freight cost by the following
formula:
freight cost = base rate + weight * zone rate, where
weight equals the Order Weight or Package Weight that are specified on the Totals tab:
weight equals the order weight if the package weight is zero,
otherwise, weight equals the package weight. If you want to specify the package weight in
the order, it must include the order weight.
zone rate is selected from the Freight Rates tab of the ship via code as follows:
If only weight or volume is specified in the order, the system selects the lowest rate that is
defined for the closest lower weight or volume in the table, respectively.
If both weight and volume are specified in the order, the system selects the maximum
measurement among them and selects the rate according to the logic above. For example,
if weight is 5 kg and volume is 10 liters, the maximum measurement is 10 liters. The units
of measure in which the weights and volume are displayed on the Totals tab of the sales
order are those specified on the Inventory Preferences form (IN101000). On the Stock
Items form (IN202500), you can define the item weight and volume in other than these
units. The item's weight and volume is converted to the order's units by the list of global
conversions on the Units of Measure form (CS203100).
The base rate of $15.00 applies to the order according to the LOCAL1 ship via code. Because
the order weight and package weight are zero, which is less than 5 kg, no extra weight fee
is applied. Finally, to the freight cost, the system applies the 10% margin that is specified in
the settings of the FIXRATE shipping term, making the final Freight price equal to $15.00 +
$15.00*10% = $16.50. Premium Freight is an extra fee that you can manually add to the
order. The total of Freight and Premium Freight will be invoiced to the customer.
Figure: Calculated freight cost
7. To specify the package weight of the sales order, do the following:
a. Define a box to pack the goods for the order. On the Boxes form (CS207600; Distribution
> Sales Orders > Configuration > Setup), define the box that weights 0.5 KG:
Box ID: SMALL
Description: Small box
Box Weight: 0.5000
Max Weight: 20.0000
b. Save your changes to the box.

The system sets KG as the Weight UOM, which is retrieved from the Weight UOM
setting specified on the Inventory Preferences form (IN101000).
c. Specify that the LOCAL1 carrier can use SMALL boxes. On the Ship Via Codes form
(CS207500), select LOCAL1 as the Ship Via.
d. On the Packages tab, add a row with SMALL as the Box ID, and save your changes.
e. Select the box for the order. On the Sales Orders form (SO301000), open the IN order
that you have created.
f. On the Shipping Settings tab, click the Packages button next to the Ship Via box, as
shown in the screenshot below.
g. In the Shop for Rates dialog that opens, add a row with the following settings, and click
OK to apply your changes:
Box ID: SMALL
Gross Weight: 6.0
Suppose that you have the information about the goods net weight which equals 5.5
KG. (The goods weight can be calculated in orders automatically, but the calculation is
not configured in this example.) For the box, you have to specify the gross weight which
equals the box weight plus the goods weight, so you have specified 5.5 KG + 0.5 KG =
6.0 KG.
Figure: Package and weigh information
h. Review the Totals tab. The Package Weight equals 6.0, which is the total gross weight
of the boxes selected for the order.
The freight cost has been recalculated by the formula above and now equals $15.00
(base rate) + 6.00 (weight) *$1 (zone rate) = $21.00. The final Freight equals $21.00 +
$21.00*10% = $23.10.
In contrast to Per Unit calculation method, the Net method specifies the calculation by the
following formula:
freight cost = base rate + zone rate.
In the example above, calculated by the Net method, the freight cost would equal $15.00
(base rate) + $1.00 (zone rate) = $16.00.

The system creates the invoice that opens on the Invoices form (SO303000).
9. On this form, review the information on the Freight Details tab, as shown in the screenshot
below.
The information by which the total freight amount has been calculated is displayed in the table.
The 480000 - Sales - Delivery Services sales account to which the freight revenue will be
recorded has been retrieved from the ship via code according to the Use Freight Account from
setting of the IN order type by which the invoice is created.
Figure: Freight information in the invoice
11. On the Financial Details tab, click the Batch Nbr. link and review the transactions on the
Journal Transactions form (GL301000).
Along with the sales transaction for the laptop item, the system has generated the transaction
for freight revenue. The sum of the sales revenue and freight revenue has been posted to the AR
account:
110000 AR account Dr, $1183.10 ($1160 + $23.10)
431000 Sales Laptops Cr, $1160.00
480000 Sales - Delivery Services Cr, $23.10
If you use integration with carriers' online services, the freight cost is retrieved from their services by
the parameters of package boxes, which are weight, volume, and size. To set up the retrieval of freight
cost from online carrier services, you have to specify the weight and volume in the stock items and
define the list of package boxes with weights, volumes, and sizes for goods of different measurements.
When you enter an order, once the item measurements are defined, the system can suggest the
package boxes automatically or you can select them manually. Once the boxes are selected, the total
box weight is inserted as the package weight into the order; the package weight already includes the
order weight. When you click Shop for Rates on the Shipping Settings tab of an order and click
Refresh Rates in the dialog, the system submits the list of boxes with their parameters to the carrier
to fetch the freight rate. After you select the rate among the appeared ones, the rate is inserted into
the Freight Cost box on the Totals tab. Later on the Shipments form (SO302000), the freight cost
can be re-fetched from the carrier's service, and the track number retrieved from the service can be
printed for the shipment. The list of boxes is displayed on the Packages tab of the Shipments form
(SO302000) for information.
Currency amounts that you specify on the Ship Via Codes (CS207500) and Shipping Terms (CS208000)
are in the base currency. Freight cost is calculated in the base currency. If the freight cost is retrieved from
online carrier services, it is treated as the cost in the base currency. (When configuring integration with
carriers, you have to make sure you obtain rates from the carrier in the base currency of the system). If
the order currency differs from the base currency, the freight cost is converted from base to the document
currency at the exchange rate specified in the document.
Related Links
Freight Calculation
Ship Via Codes (CS207500)

Shipping Zones (CS207510)
Shipping Terms (CS208000)
Integrated Carriers
You can configure integration with FedEx, USPS, and UPS carriers to get actual delivery rates for orders
and shipments. For more information, see Integration With Carriers in the Acumatica ERP User Guide.
Lesson Summary
You can process invoices for services from the Sales Orders module, from which you can also process
mixed orders of stock, services, and non-stock items. You can configure the needed non-stock items
as requiring a shipment and the lines with these items will be copied from orders to the shipments and
then to the invoices.
You can configure a built-in calculation of freight costs in sales orders. Based on the calculated cost,
you can configure the shipping terms that specify the freight price for the customer. You can configure a
shipping term with the profit margin, and you can also define a term for free shipping of large orders.
| Practice Exercises | 357
Practice Exercises
Lesson 1
1. Specify the corresponding reason codes as the default reason codes for the adjustment and
physical inventory transactions in the configuration preferences of the Inventory module.
Lesson 2
1. Split the STOCKITEM item class into two ones: LAPTOP and DEVICE. Specify the posting classes
for these item classes and update the item classes of items. What happens when you change the
item class of an item?
Lesson 8
1. Create an item class for stock items with PC as the base unit, then create a stock item that
belongs to the class. Notice that the conversions from LOT10 and LOT6 have been automatically
added to the item class, and then copied from the item class to the item. On the item level,
you can remove some UOM conversions if they are not applicable to the item or override the
conversion ratio. Remove the conversion to LOT6 from the item settings and check if you can
select that unit in an inventory transaction.
Lesson 12
1. Configure a non-stock item for freight expenses incurred from delivery services that a third-party
carrier provides to your customers. Set up the processing of expenses with accrual transactions
starting from the Purchase Orders module. Use the ServiceCo vendor as the carrier account in
the system. Process an order to accrue the expenses in 12-2014, and then process the bill from
ServiceCo with an actual amount for that month.
Lesson 19
1. Make the Order Summary custom inquiry as the entry point to the Sales Orders form
(SO301000). For detail instructions, see the S130 - Inquiries, Reports, and Dashboards training
course.
| Appendix A: Allocation Types | 358
Appendix A: Allocation Types

Inventory Allocation Details (and Inventory Summary):
IN Issues
Inventory issue on hold/balanced; invoice, issue, debit memo lines quantity
SO Prepared
Sales order (SO) on hold/credit hold/rejected/pending approval, open quantity
Sales order cash sale (CS) on hold/credit hold/rejected/pending approval, open quantity
Sales order invoice (IN) on hold/credit hold/rejected/pending approval, open quantity
SO Booked (issue lines, receipt lines are subtracted if Include Qty. on Returns is selected)
Sales order on hold/open, open quantity not allocated
Sales order shipping, quantity qty. on shipments
SO Allocated (issue lines, receipt lines are subtracted if Include Qty. on Returns is selected)
Sales order on hold/open, open quantity allocated
Shipment open, shipped quantity
SO Shipped (issue lines, receipt lines are subtracted if Include Qty. on Returns is selected)
Shipment confirmed not issued, shipped quantity
Sales orders that are processed without shipment:
Sales order invoice (IN) open/on hold, open quantity
Sales order cash sale (CS) open/on hold, open quantity
Sales order cash return (CR) open/on hold, open quantity (receipt line)
SO Back Ordered
Sales order back order, open quantity
IN Receipts
Inventory receipt on hold/balanced, quantity
Inventory issue on hold/balanced; return and credit memo lines quantity
Purchase Prepared (allocation type PO Prepared)
Purchase order on hold, line quantity order qty qty on receipts
Purchase Orders (allocation type PO Order)
Purchase order open, line Order Qty (on the Inventory Allocation Details form), line Order
Qty - Qty on Receipts (on the Inventory Summary form)
PO Receipts (allocation type PO Receipt)
Purchase receipt on hold/balanced, receipt qty
Purchase return on hold/balanced, -receipt qty
| Appendix B: GL Transactions Outline | 359
Appendix B: GL Transactions Outline

Suppose that one unit of a stock item A is purchased to the cost of $100 and sold at the price of $120.
One unit of a non-stock item B is purchased to the cost of $100 and sold at the price of $120. Below
is the summary of GL transactions that are processed during the integrated purchasing and order
fulfillment processes in the system. (The GL account setting that is used for the transaction is specified
in parentheses.)
Purchase order processing with a stock item
Purchase order processing with a non-stock item requiring a receipt
Purchase order processing with a non-stock item not requiring a receipt
Sales order processing with a stock item
Sales order processing with a non-stock item (either requiring a shipment or not)
Purchase order processing with a stock item
Purchase order, Goods for IN line
Purchase receipt, Goods for IN line - inventory receipt:
Inventory a/c Dr $100 (Inventory Account)
Accrued purchases a/c Cr $100 (PO Accrual Account)
Account payable bill:
Accrued purchases a/c Dr $100 (PO Accrual Account)
Accounts payable a/c Cr $100
Purchase order processing with a non-stock item requiring a receipt
Purchase order, Non-Stock line
Purchase receipt, Non-Stock line - inventory receipt:
Expense a/c Dr $100 (Expense Account)
Accrued expenses a/c Cr $100 (PO Accrual Account)
Accrued expenses a/c Dr $100 (PO Accrual Account)
Purchase order processing with a non-stock item not requiring a receipt
Purchase order, Service line
Expense a/c Dr $100 (Expense Account)
Sales order processing with a stock item
Sales order, stock item
Accounts receivable invoice

| Appendix B: GL Transactions Outline | 360
Accounts receivable a/c Dr $120
Sales income a/c Cr $120 (Sales Account)
Inventory issue
Cost of goods sold a/c Dr $100 (COGS Account)
Inventory a/c Cr $100 (Inventory Account)
Sales order processing with a non-stock item (either requiring a shipment or not)
Sales order, non-stock item
Accounts receivable invoice:
Accounts receivable a/c Dr $120
Sales income a/c Cr $120 (Sales Account)

| Appendix C: Shipment Creation Troubleshooting | 361
Appendix C: Shipment Creation Troubleshooting

Error: "Order does not contain any items planned for shipment on date."
You might see this error when trying to create a shipment from the Sales Orders form (SO301000).
Possible reasons:
There are no open lines with the Ship On date equal or greater than the selected date.
The order contains only non-stock items that don't require a shipment.
The order has already been shipped in full (open quantity of each line of the order is zero). See
the Shipments tab.

Error: "Order cannot be shipped in full. Check Trace for more details."
You might see this error when trying to create a shipment from the Sales Orders form (SO301000).
Possible reasons:
The header shipping rule on the Shipping Settings tab is set to Ship Complete and there are
lines with Ship Complete rule in the order which cannot be shipped in full quantity. Review the
trace to see which items are missing as the screenshot below shows.
Figure: Review the list of items that cannot be shipped in full
Order doesn't appear on Process Orders form (SO501000) for shipment creation.
Possible reasons:
There are no SO Booked of SO Allocated lines in the order (the quantities might be classified to
SO Back Ordered). You need to run the back order replanning process on the Validate Inventory
form (IN505000).
| Appendix D: Custom Order Types for Sales Returns | 362
Appendix D: Custom Order Types for Sales

Returns
The following information is provided for reference in case you might want to configure the custom
order types:
Return for cash with the incoming shipment (receipt) processing
Return for replacement:
Replacement at a greater price, processing of the invoice without a shipment
Replacement at a lower price, processing of the credit memo without a shipment
Replacement at a lower price, processing of the credit memo through a shipment
Return for Cash Through Receipt
Figure: Template settings for a custom order type for processing returns for cash with the incoming shipment
processing
Return for Replacement With the Direct Invoice
Figure: Template settings for a custom order type for processing returns for replacement at a greater price without
shipment processing
| Appendix D: Custom Order Types for Sales Returns | 363
Return for Replacement With the Direct Credit Memo
Figure: Template settings for a custom order type for processing returns for replacement at a lower price without
shipment processing
Return for Replacement With the Credit Memo Through Shipment

The settings for a custom R2 order type are shown on the screenshot. To process the order:
1. On the Sales Orders form (SO301000), create an R2 order with a receipt line for a returned good
and an issue line for a new sold good.
2. Select Create Receipt. Confirm the receipt of the returned good.
3. Select Create Shipment. Confirm the shipment of the new good.
4. On the Sales Orders form (SO301000), select Prepare Invoice.

The system generates the credit memo in the amount of difference between the return and new
issue.
5. Release the credit memo.

The system generates transactions to the AR account and sales account; generates inventory
transactions to record the good movements in inventory. You can review the documents and
transactions by using links on the Shipments tab of the Sales Orders form (SO301000) for the
order.
Figure: Template settings for a custom order type for processing returns for replacement at a lower price with
shipment processing
| Appendix E: Availability Calculation | 364
Appendix E: Availability Calculation

The screenshot below shows the availability calculation settings that apply to the LAPTOP12 item.
The availability calculation settings are specified at the item class level only. The LAPTOP12 item is
assigned to the STOCKITEM item class, therefore the availability calculation settings of the STOCKITEM
class apply to the LAPTOP12 item. The settings specify how the available quantity is affected by the
document and transaction lines of different allocation types that correspond to the check boxes.
These settings apply to the items in all warehouses in the system. To change the way the item's
available quantity is calculated, you have to modify the settings of the item class or assign the item
to another item class. After you change the settings, you have to recalculate the item quantities in
inventory. (See Step 5.1: Analyzing the Item Quantities for an example.)
Figure: The availability calculation settings that apply to the LAPTOP12 item assigned to the STOCKITEM item class
More information is provided in the sections below.

Quantities on the Inventory Summary Form
Quantities on Data Entry Forms
Quantities on the Inventory Allocation Details Form
Modifying Availability Calculation Settings
Quantities on the Inventory Summary Form

On the Inventory Summary form (IN401000; Distribution > Inventory > Work Area > Explore), you
can see the summarized quantities of the selected item in inventory (see the screenshot below). For
the selected item, warehouse, and warehouse location, the form shows the available quantities and
subtotals by different allocation types. For all categories, the quantities are presented in the base
unit of measure. In the configuration with one warehouse, the quantities are presented for the only
warehouse MAIN.
The quantities that are displayed on the Inventory Summary form (IN401000) are stored in the
database and retrieved when you select an item on the form. In accordance with the availability
calculation settings, the summarized quantities are updated in the database every time when users
modify quantities on inventory transactions and documents in the system and save the changes.
The available and available for shipping quantities are also updated on every change in the on-hand
quantity. Based on the available and available for shipping quantities retrieved from the database, the
system calculates the quantities that are displayed on data entry forms.
Figure: The summarized quantities of the inventory item
Quantities on Data Entry Forms

The on-hand, available, and available for shipping quantities are displayed for users on the following
data entry forms:
Inventory transaction entry forms in the Inventory module (on the Receipts form, in the purchase
unit of measure; on the Issues form, in the sales unit of measure; on the Adjustments form, in
the base unit of measure)
Sales order and shipment entry forms in the Sales Orders module (in the sales unit of measure)
Purchase receipt entry form in the Purchase Orders module (in the purchase unit of measure)
Available quantity shows the maximum quantity that can be selected in the line according to the
availability calculation settings (the quantities are presented for each line individually without the
impact that the line might have on the available quantity). The system removes the line impact from
the available quantity according to the availability calculation settings. For deductive lines (issue lines),
the line quantity is added to the available quantity, for additive lines (receipt lines), the line quantity
is subtracted from the available quantity and the result is displayed on the form. The quantities are
retrieved from the database when you select an item in a document line or save the document. The
quantities are recalculated for the document lines every time you change the line quantity. To re-fetch
the quantities from the database, you can also click (Refresh) on the table toolbar as shown on the
screenshot. The lines of fully processed documents have no impact on the available quantity, therefore
the available quantity is displayed in the processed documents as retrieved from the database.
The quantities are displayed for the warehouse and location that are specified in the document line.
In the example of this course, the quantities are displayed for the only warehouse in the system,
MAIN, and warehouse locations are not used. The screenshot below shows the on-hand and available
quantities of the LAPTOP12 item in the MAIN warehouse with respect to the first line of the inventory
issue, which is selected by default as soon as you open a transaction or document. The issue has been
releasedthat is, processed to the end, therefore the quantity of the issue line doesn't impact the
available quantity retrieved from the database.
Figure: On-hand and available quantities of the item with respect to the issue line
Quantities on the Inventory Allocation Details Form

To review all transactions and documents that are in progress with an item at the moment, you can use
the Inventory Allocation Details form (IN402000; Distribution > Inventory > Work Area > Explore). The
form displays all lines with the item that aren't yet fully processed in the system. Lines are summed
up by allocation type, and the subtotals are displayed on the form along with the on-hand quantity. All
quantities are presented in the base unit of measure.
Availability calculation settings of item classes define which subtotals affect the available quantity. The
sums of subtotals that affect the available quantity are displayed in the Total Addition and Total
Deduction boxes on this form. Subtotals that affect the available quantity are marked with a check
box (see the screenshot below). Thus, the IN Issues quantity is added to the total deduction because
the Deduct Qty. on Issues check box is selected for the item class of the LAPTOP12 item. The IN
Receipts quantity is not added to the total addition because the Include Qty. on Receipts is not
selected for the item class.
Figure: Subtotals that affect (IN Issues) and don't affect (IN Receipts) the available quantity
Subtotals correspond to allocation types. You can filter lines by the Allocation Type column to view
the lines from which a particular subtotal is calculated. For information on which quantities fall under the
allocation types, see Appendix A: Allocation Types.
Suppose that you have entered an inventory issue of three LAPTOP12 laptops and now the transaction
has the On Hold status. The lines of the inventory issue appear on the Inventory Allocation Details
form (IN402000) as the next screenshot shows. According to the availability calculation settings that
apply to the LAPTOP12 item, the quantity on issues that haven't yet been released reduces the available
quantity of the item. The total quantity of the issue lines with the LAPTOP12 item is equal to 3. This
quantity is displayed in IN Issues subtotal, which is added up to the Total Deduction quantity. The
total deduction has been subtracted from On Hand to obtain the Available quantity, which is now
equal to 0 units (3 on hand - 3 total deduction = 0 available).
The Available for Shipping quantity always excludes the quantity on issues that haven't yet been
released and has the On Hold or Balanced status. Therefore, the Available for Shipping quantity is
also equal to 0 units (3 on hand - 3 IN Issues = 0 available for shipping).
The quantities are recalculated on the form as soon as you select an inventory item on the Inventory
Allocation Details form (IN402000) or click (Refresh) on the form. The quantities are presented
for the warehouse and location that you can select on the form if you use multiple warehouses and
warehouse locations correspondingly. In this example, the quantities are presented for the only
warehouse in the system, MAIN, which has the only location.
Figure: The available quantity reduced by the quantity to be issued of the item
You can double-click the document line in the table to view the document. If you double-click an issue line
in the table, the transaction will open on the Issues form (IN302000).
If you open the issue on the Issues form (IN302000), you can see the available quantity of the item
with respect to each line of the issue. The available quantity that has been retrieved from the database
is 0 units. If you click the first line, you will see the available quantity of 1 unit, which equals 0 units
available plus the quantity of 1 unit in the first line. For the second line, the available quantity is 2
units, which equals 0 units plus the quantity of 2 units in the line. On data entry forms, for not yet
processed documents and transactions, the Available and Available for Shipping quantities are
displayed for the currently selected line without the impact of that line.
Figure: The available quantities with respect to each line of the transaction or document
Modifying Availability Calculation Settings

If you change the availability calculation settings for an item class or modify the availability of items
in certain warehouse locations, you have to recalculate the item quantities in the system after you
have changed the settings. To recalculate quantities, you have to open the Validate Inventory form
(IN505000; Distribution > Inventory > Processes > Closing), select the warehouse, and run the process
for items in the warehouse. You will see an example of recalculation later in this course.
The Inventory Allocation Details form (IN402000) always shows actual quantities of an item, which
are recalculated according to the availability calculation settings retrieved at the moment of opening
or reloading the form. Recalculation is required to update the item quantities that are stored in the
database and retrieved to the data entry forms when you select the item in a transaction or document
line.
The same quantities that require recalculation are reflected on the Inventory Summary form
(IN401000; Distribution > Inventory > Work Area > Explore). If you change the availability calculation
settings for an item class, the quantities on the Inventory Allocation Details form (IN402000) may
differ from the quantities retrieved from the database and displayed to the Inventory Summary form
(IN401000) until you recalculate the quantities.
| Appendix F: Processing an Issue to a Negative Inventory | 370
Appendix F: Processing an Issue to a Negative

Inventory
If you enter inventory receipts and inventory issues asynchronously, the issues might be created before
the receipts are processed. By default, you cannot release an inventory issue with a greater quantity
than the on-hand one. You have to release the inventory receipts to update the on-hand quantity and
then you can release inventory issues.
If you need to process inventory issues before the receipts are processed, you can configure the system
to allow negative inventory for a certain item class. The processing of issues that result in negative
inventory have limitations. However, there is the Allow Negative Quantity check box in the item class
settings that allows the processing of inventory issues below zero (see the screenshot below). Note that
this setting applies to all items assigned to the item class.
If you process an issue to a negative on-hand quantity of an item, the system issues the missing units
at the average cost from the cost statistics of the item or at the last cost from the costs statistics if the
average cost is zero. Later upon the subsequent receipt, the system adjusts the issued cost. (You can
also adjust a negative quantity and cost manually by processing an inventory adjustment.)
If you need to process shipments and invoices in the Sales Orders module with the oversold quantities,
you can select the Add Zero Lines for Items Not in Stock check box on the Sales Orders Preferences
form (SO101000) and the system will add lines to shipments and invoices with the items for which
negative inventory quantity is allowed, if these items are missing in stock at the moment of the
shipment or invoice creation. In this case, the line shipping rule is ignored.
Figure: On-hand quantity of the items assigned to the STOCKITEM class cannot go below zero
Consider an example. Suppose that you need to release an inventory issue of 15 keyboards while the
on-hand quantity is 10 and the inventory receipt of 12 keyboards hasn't been released yet. Analyze how
the negative cost is recorded by the issue and then updated on the processing of the receipt:
select the STOCKITEM class, on the General Settings tab, select the Allow Negative
Quantity check box and save the settings.
To be able to issue more than on-hand quantity of an item, you have to allow negative quantity
in the item class to which the item is assigned. The keyboard item (KEYBOARD) is assigned to
the STOCKITEM class, therefore you have to select the Allow Negative Quantity check box
for this item class. Note that all items that are assigned to the STOCKITEM class can now have
negative on-hand quantity in the system.
2. Process the issue of 15 keyboards on 5/15/2014:
a. On the Issues form (IN302000), create and save an inventory issue with the following
information:
Date: 5/15/2014
Description: Keyboards sold
Control Qty: 15.00
Tran. Type: Invoice
Quantity: 15.00
UOM: PC
After you save the issue, you will see the warning as the screenshot below shows. The
quantity of the KEYBOARD item in the line is greater than the on-hand quantity of the
item in inventory, 15 is greater than 10. This warning notifies you that the item's on-hand
quantity will be negative after you process the issue.
Figure: Negative on-hand quantity warning
b. Clear the Hold check box and release the inventory issue.
You can process the issue because you have selected the Allow Negative Quantity
check box for the item class to which the KEYBOARD item is assigned. Otherwise, you
wouldn't be able to process an issue of more than 10 keyboards, you will get an error on
attempting to release such issue.
3. After the inventory issue has been released, open the batch of the general ledger transactions
that have been generated on release of the issue (see the screenshot below).
The transaction contains two credit entries to the inventory account. The first entry credits the
account by $150, which is the cost of 10 units issued from inventory on hand. The second entry
credits the inventory account by $75, which is an estimated cost of 5 units that were missing
on hand. When you are issuing more units than you have on hand, the system issues them at
the estimated cost that is equal to the unit cost of the last issued on-hand unit. In this example,
it was $15, therefore the total estimated cost is $75 (5 units * $15 = $75). This cost is later
adjusted to the actual cost of the receipt.
The cost of goods sold account is debited by the total amount of two entries, which is $225
($150 + $75 = $225).
Figure: The general ledger transactions generated on issuing more than on-hand quantity of units
4. Prepare the Inventory Valuation detail report (IN615500) with the following parameters to
review the inventory transactions with the KEYBOARD item:
Report Summary: Detail
The report shows two inventory transactions that have updated the inventory on issue (see
the screenshot below). One transaction removed all on-hand units at the actual unit cost from
inventory, while the second transaction removed the missing units at the estimated cost of $15.
At the moment, the inventory account is missing 5 units of the KEYBOARD item at the total cost
of $75, as the report shows.
Figure: The inventory transactions generated on issuing more units than there are on hand
5. Now process the receipt:

a. On the Receipts form (IN301000), create a new inventory receipt of keyboards for
5/15/2014 with the following information:
Date: 5/15/2014
Description: Keyboards receipt
Control Qty: 12.00
Control Cost: 240.00
b. On the Transaction Details tab, add a line for the receipt of 12 keyboards at the unit
cost of $20/piece and save the receipt:
Quantity: 12.00
UOM: PC
Unit Cost: 20.00
Make sure your receipt looks as the screenshot below shows.
Figure: Inventory receipt
c. Clear the Hold check box and release the receipt.

6. After the inventory receipt has been released, open the batch of general ledger transactions that
have been generated on release of the receipt (see the screenshot below).
Because the receipt compensates already issued units that are missing in inventory, the system
generates the journal entries that adjust the issued cost to the difference, if any. The units
should have been issued at the total cost of $100 (5 units * $20/unit = $100), however they
were issued at the estimated cost of $75 (5 units * $15 = $75), which is lower than it had to
be. The issued cost should have been higher by $25, and the balance of the inventory account
should be less by $25 now. To adjust this difference, the system debits $25 to the COGS
account, and credits the inventory account by $25. Two entries are generated to the inventory
account: a debit entry in the amount of $240 (receipt amount) and a credit entry in the amount
of $25 (cost difference).
When you process a receipt of an item that has a negative on-hand quantity, along with the
receipt transaction, the system generates general ledger transactions to adjust the difference
that should have been posted to the accounts when the missing units were issued. If the issued
cost was greater than it had to be, the system would debit the inventory account and credit the
COGS account in the amount of the difference.
Figure: The inventory account is credited in the adjusted cost of the received item
7. Prepare the Inventory Valuation detail report (IN615500) with the following parameters to
review the inventory transactions with the KEYBOARD item:
Report Summary: Detail
The report shows two extra transactions that have updated inventory after the receipt has
been processed (see the screenshot below). The highlighted transactions are the correcting
transactions for the inventory issue. The transaction in the amount of $75 returns the units
that were originally issued at the estimated cost of $15/unit. The transaction in the amount of
$100 reissues the units at the proper cost of $20/unit, which has been determined upon the
receipt. The correcting transactions that are displayed in this report are assigned the reference
number of the corrected issue. You can click the link in the report to view the issue that has
been corrected.
Figure: The inventory transactions that correct the initial issue
Below is the outline of the inventory transactions and the general ledger transactions of this
example.
Inventory General Ledger

Inventory Transactions for Item KEYBOARD Journal
Transactions
Quantity Unit Cost Total Cost
Beginning Balance of inventory 10 units @$15/unit, $150 $150

a/c
Issue of 15 units:
Issue of 10 units -10 units @15/unit -$150 Inventory a/c Cr
@15/unit, $150 $150
Issue of 5 units -5 units @15/unit -$75 Inventory a/c Cr

@15/unit, $75 $75
COGS a/c Dr
$225
Ending Balance of inventory a/c -5 units @15/unit, -$75 -$75
Receipt of 12 units @20/unit, $240:
Receipt of 12 +12 units @20/unit $240 Inventory a/c Dr
units @20/unit, $240
$240
Inventory accrual
a/c Cr $240
Issue correction: +5 units @15/unit $75 Inventory a/c Cr

+5 units @15/ $25
unit, $75
COGS a/c Dr $25
Issue correction: -5 units @20/unit -$100
-5 units @20/
unit, $100
Ending Balance of inventory a/c 7 units @20/unit, $140 $140
Related Links
The Cost of Inventory (Negative Quantities)
Receipts (IN301000)
Issues (IN302000)
| Appendix G: Initial Configuration Reference | 376
Appendix G: Initial Configuration Reference

You start this course from the F300 data that you preload to your training company by using the
Acumatica ERP Configuration Wizard. The data contains the configuration and sample documents that
you can obtain upon completion of all exercises of the F100 Financials: Basic course from the beginning
to the end.
The F300 data also includes the following entities, which are configured for use in other training
courses:
The BASE employee class defined on the Employee Classes form (EP202000)
The MAIN work calendar defined on the Work Calendar form (CS209000)
Departments defined on the Departments form (EP201500)
Administrative
Consulting
Development
Sales
Employee accounts created on the Employees form (EP203000) and linked to the user logins that
are maintained on the Users form (SM201010)
Andrews, Michael (linked to the admin user login)
Johnson, Anna
Chubb, David
| Glossary | 377
Glossary
Inventory entry. Detail line (INTran) on a data entry form of the Inventory module, such as Receipts
(IN301000), Issues (IN302000), or Adjustments (IN302000). Inventory entries are listed on the
Inventory Transaction History form (IN405000).
Inventory transaction. Inventory update record (INTranCost) that is saved in the Inventory module
on release of an inventory entry with a stock item. Inventory transactions are listed on the Inventory
Transactions by Account form (IN403000).
Ending Inventory. The quantity and total cost of items on hand in inventory. This information is
presented in the Inventory Valuation summary report (IN615500).
Stock Item. An item that is reflected in inventory; the system generates inventory transactions with
stock items and tracks the on-hand quantity of them and the cost flow.
Non-Stock Item. An item that is not reflected in inventory; the system doesn't generate inventory
transactions with non-stock items.
Non-stock item that requires a receipt. An item that has the Require Receipt check box selected
on the Non-Stock Items form (IN202000).
Non-stock item that doesn't require a receipt. An item that has the Require Receipt check box
cleared on the Non-Stock Items form (IN202000).
On-hand Quantity. The item quantity by released inventory transactions.
Receipt transaction. Transaction that debits the inventory account and credits the accrued purchases
account, which occurs when an item purchased on credit is received to inventory.
Sales transaction. Transaction that credits the sales account and debits the accounts receivable
account (or cash account), which occurs when an item is sold on credit (for cash).
Cost transaction. Transaction that credits the inventory account and debits the cost of goods sold
account, which occurs when an item is issued from inventory for sale.
Allocation Type. Quantity is allocated by some type when it is selected in a document or transaction
line that hasn't been processed to the end in the system. Unprocessed lines of documents and
transactions are classified into allocation types. You can view quantity subtotals by allocation type on
the Inventory Allocation Details form (IN402000). For information which lines classify into particular
allocation types, see Appendix A: Allocation Types.
Cost statistics. Statistical information about the item's unit cost, which include the global item's
statistics by all warehouses displayed on the Price/Cost Info tab of the Stock Items form (IN202500)
and the warehouse-specific statistics displayed on the Price/Cost Information tab of the Item
Warehouse Details form (IN204500) recorded for each item-warehouse combination. See Step 4.2:
Reviewing the Cost Statistics of an Item.
Physical count. The process of counting goods at the warehouse to find out their physical quantities.
Physical inventory. The physical count of entire inventory at the warehouse.
Historical period. Historical period in the Inventory module means that there are inventory
transactions processed to a period after that historical period in the module. Compare to last activity
period.
Last Activity Period. Last activity period in a module is the most recent period in the system to which
the transactions have been processed in the module. Compare to historical period.
Replanning of Back Orders. The process of reclassifying open quantities of items on sales order lines
from the SO Back Ordered to the SO Booked allocation type for the items that have been received to
inventory and now can be shipped. This process does not update the order status.
Return Merchandise Authorization. The process of accepting an earlier sold, but returned good from
a customer for credit, cash, or replacement on conditions that are defined by the return policy of the
company.
RMA. See Return Merchandise Authorization.

D100-Distribution Basic 6.0

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Last Revision: 10/31/2016

How to Use This Course...............................................................................8

Step 6.4: Processing the Count Result................................................................... 116

Part 2: Purchase Orders...........................................................................151

Part 3: Sales Orders.................................................................................240

Lesson 14: Introduction to Sales Orders......................................................................... 242

Practice Exercises.................................................................................... 357

Appendix A: Allocation Types...................................................................358

Appendix B: GL Transactions Outline....................................................... 359

Appendix C: Shipment Creation Troubleshooting..................................... 361

Appendix D: Custom Order Types for Sales Returns.................................362

Appendix E: Availability Calculation......................................................... 364

Appendix F: Processing an Issue to a Negative Inventory........................370

Appendix G: Initial Configuration Reference............................................ 376

2016 Acumatica, Inc.

4030 Lake Washington Blvd NE, Suite 100

Software Version - 6.0

How to Use This Course

How to Create a Company with the Needed Data

5. Click Next, and on the Confirm Configuration page, click Finish.

Company Story: Inventory

Lesson 1: Introduction to Inventory

Define the reason codes for inventory entries

Specify the minimum required configuration for the Inventory module

Integrated Financial and Distribution Modules of Acumatica

Figure: Integration of the financial and distribution modules of Acumatica ERP

Inventory Entries and Transactions

Step 1.1: Enabling the Distribution Suite in the System

Figure: The Distribution suite selected for enablement in the system

3. Click Enable on the form toolbar.

Step 1.2: Adding the General Ledger Accounts

Figure: Specifying the posting of detail journal entries to the account

190000 - AR Clearing asset account.

Step 1.3: Configuring the Reason Codes for Inventory Entries

Figure: The INRECEIPT reason code

Step 1.4: Configuring the Inventory Module

Lesson 2: Inventory Items

Create stock items

Create non-stock items

Posting Classes for Stock Items

Posting Classes for Non-Stock Items

Changing the Inventory Account for an Item

3. Specify the new inventory account in settings.

Step 2.1: Creating the Posting Classes for Processing GL

# Product Income Statement Balance Sheet

Create the posting classes as described below.

Figure: Posting settings of the LAPTOP posting class

PO Accrual Account: 230000 - Accrued Expenses

Step 2.2: Creating the Item Classes for Controlling Items in

# Product Inventory Valuation Availability Calculation Sales Purchase

Item Type: Finished Good

Figure: The STOCKITEM item class

Step 2.3: Creating a Stock Item

Figure: The LAPTOP12 stock item

2. On the Stock Items form (IN202500), create the LAPTOP14 item:

Inventory ID: HEADSET

Step 2.4: Creating a Non-Stock Item

Figure: The INSTLLTION non-stock item

2. On the Non-Stock Items form (IN202000), create the DIAGNOSTIC item:

Lesson 3: Inventory Transactions

Process an inventory receipt

Process an inventory issue

Make a cost adjustment to inventory