We have had long term problems with using Adagio Inventory for Stock Transfers and so we recently switched to using Order Entry. As suggested to us in an older post on these forums, we decided to Invoice our branches out of our stock and then Credit them back after confirmation of the delivery returning the product to their stock. Thus, moving the stock from our warehouse to theirs. It's not a great solution, but it provides better paperwork and inventory control than Adagio Inventory's Stock Transfer.

Since were are now doing a large volume of Credit Notes in this process, I have questions regarding what effect it is having on our inventory item cost.

1. We sometimes Invoice and then Credit the Invoice the same day. This gives us a message about the cost has not been processed by Day End and will use the Standard Cost. What exactly does this mean?? Should we delay enterring the Credits until the next day to avoid this? Just to explain further, we use Standard Cost as the cost for our Sales Reps. We mark up our Actual Cost (Avg Cost) slightly to cover processing and manually enter that amount in Standard Cost at the point of receiving the product from our suppliers. Later when the items is sold, our Sales Reps commission is based on a percentage of Selling Price minus the Standard Cost. So therefore our Standard Cost is always a little higher than our Actual (Avg Cost).

2. After we issue the Credit, we immediately print a Valuation Report for our branch warehouse location. The bottom of the report has note that says: "**Note: Invoices have been entered in Order Entry, but have not been costed. Items will not show correct costs until O/E Day End processing is completed". Does this mean we should wait another day after the Credit Note has been entered to print the valuation report? When we do the valuation report the same day as the Credit note, some of the items are completely missing from the valuation report because we have "restrict to nonzero qtys and costs" checked. I believe that the qty's are updated on the system immediately when the credit is issued, however, some of the costs are maybe at zero until after day end is processed therefore explaining why those items are missing from the valuation report??

Thanks for your help on this. I hope to fine tune this process ASAP.

Hi Susan,

When an invoice in OrderEntry is posted, quantity is relieved from Inventory for each item. However, the actual cost associated with the items is not determined by posting the invoice, but rather when Day End Processing is performed. This also affects the Item Valution report, as you found in your second question. Until Day End is run, an intermediary cost is assigned to the item, either Most Recent or Standard Cost, based on your item costing method.

If you create a credit note prior to running Day End, you get the warning message that you indicated. If you are satisfied with the intermediary cost (Most Recent or Standard) assigned to the invoice, then you don't have to worry about doing Day End prior to entering the Credit Note. To see what it is, you can add Unit Cost to the items grid when viewing Invoices. It will also appear on the new Credit Note when editing the detail. If you want the 'real' cost, then indeed Day End should be run first.

The Item Valuation report will not display the most up to day item quantities and costs until Day End Processing is performed. This is the reason for the Note on the report. If you require exact cost calculations on the report, they are available only immediately after running Day End and prior to creating any more invoices.

1. Standard Cost will be used for the credit, not average or actual.
2. Valuation reports are fully accurate only between Day End Processing and the next posting of Invoices - or when you calculate back to a previous date.

Inventory value is not stored per unit but as a total for all of that item code in any location.
Invoicing changes the quantity of items on hand but not the value. Day End Processing changes the value.

In GridView you can see a "shipped not costed" field that holds the quantity of items invoiced for which day end has not yet been run to change the value.

Therefore, any changes that depend on correct cost value - adjustments, credits to new invoices - should not be done until the value has been changed by "Day End"

Note that "Day End Processing" can be done at any time, though it does require exclusive access and should be preceded by a backup.

1. Is there a setting that we can change in OE so that it will use the Avg Unit Cost or the Blended Cost instead of Standard Cost when issuing Credit Notes on the same day as the Invoice? Recent Cost would be my next choice which would work except for the items that we have protated to include the cost of shipping, brokerage and duty. Where is the setting (if there is one) to change OE from using the Standard Cost on Credit Notes processed the same day as the Invoice?

2. I just created a Gridview to replace the Valuation Report using Composite Table *IC Item Loc w IC Item. Fields are Item#, I/C Item Description, I/C Item Std Cost, I/C Item Base Price. Then I created a calculated column with the name KI-QTY with the filter {Qty on Hand Plus} - {Qty Shipped not Cost} to show the Quantity on Hand including all the Invoices and Credits that have not been processed by Day End. Then I filtered everything with IF({Loc} =" KI",{KI-QTY},0) and I think it's actually working!!!

Sorry, but there is no option to determine what cost is used to pre-populate the Unit Cost for new Orders - it will be the Most Recent Cost unless your items use the Standard Costing method. The way that the Avg Unit Cost gets applied to items on the invoice is to run Day End Processing, which is the usual procedure.

You can run Day End as often as you wish - it doesn't have to be at the end of the day. Of course, you have to have people stop entering orders, so this may not be practical.

Good job on the GridView view! You are correctly dealing with the 'qty shipped not costed' to get the qty as if Day End in OE was performed.

You're right, it's not practical or efficient for us to have the whole staff removed from Adagio to perform a Day End during business hours. Because of this, we only perform Day End after hours.

The costing method on all of our inventory is "Moving Average" not "Standard Cost". Why then when we issue Credits on the same day as the Invoice was issued is Adagio using "Standard Cost" instead of "Most Recent Cost"?

I don't know offhand. It can be either Most Recent or Standard, depending on other setup choices. In sample data, all the methods I've tried write the Most Recent cost as the 'unit cost' on the order.

In any case, if you get Standard Cost, that is what it is for your company and there are no options to change this.