Expense Account (Expense)
This account is used when posting item type A/P Invoices that contain non-inventory items. The expense account will be debited (normally the purchase of an inventoried item debits the inventory account).
Revenue Account (Revenue)
This account is used when posting A/R Invoices or A/R Reserve Invoices. The revenue account will be credited.
Inventory Account (Asset)
The inventory account is used for all postings dealing with inventory (Delivery, Return, A/R Invoice, A/R Credit Memo, Goods Receipt PO, Goods Return, A/P Invoice, A/P Credit Memo, Goods Receipt, Goods Issue, Inventory Transfer, Inventory Revaluation and Stock Posting). Debits and credits depend on the direction of stock movement.
Cost of Goods Sold Account (Cost of Goods Sold)
This account is utilized when posting item type deliveries (or A/R Invoices not based on Deliveries) for inventoried items. The COGS account will be debited.
Allocation Account (Liability)
This account is used when posting Goods Receipt PO’s for inventoried items. This is a clearing account that will be credited when you post a GRPO and debited when the linked A/P Invoice is created. This account can also be cleared by manually closing GRPO’s. In this case, the Allocation Account is debited and the Goods Clearing Account is credited.
Variance Account (Expense)
The Variance Account is used in conjunction with standard cost inventory items. Any time the stock level of a standard cost item increases, there is potential for a difference between the cost input into the document, and the standard cost identified for the item. This variance will be posted to the Variance Account. For example Item A has a standard cost of $5. A GRPO is posted for 1 unit of Item A at a price of $7. The difference between $7 – $5 = $2. That $2 will be debited to the Variance Account and $5 will be debited to the Inventory Account.
Price Difference Account (Cost of Goods Sold)
The Price Difference Account is used with inventory items managed by either FIFO or Moving Average Cost. When the price on an A/P Invoice is different from that of the base GRPO, the difference must be accounted for as this directly affects inventory costing. There are three possible scenarios:
- If the inventory received on the GRPO is still in stock, the price difference will be applied to the inventory and the cost adjusted.
- If there is no longer any inventory, the price difference will be posted to the Price Difference Account as it can’t be applied to inventory. It's recommended that the Price Difference Account be a Cost of Goods Sold Account.
- If some stock exists and is revalued, the remaining price difference is sent to the Price Difference Account.
Negative Inventory Adjustment Account (Expense)
This account is used if you allow inventory to enter into a negative state.
For more information on negative inventory and how it can impact your financials, please contact our Support team: email@example.com.
Inventory Offset – Decrease Account (Expense)
This is the default offsetting account used when posting a Goods Issue. This decrease account will be debited. It is also used in the inventory count process as the default offsetting account when inventory is being written off/reduced.
Inventory Offset – Increase Account (Expense)
This is the default offsetting account used when posting a Goods Receipt. This increase account will be credited. It is also used in the inventory count processes as the default offsetting account when inventory is being received/increased.
Sales Returns Account (Asset)
This account is used when posting a Return or an A/R Credit Memo. This is where the inventory value of the returned stock will be posted. It is highly recommended that this is set to the same account as your inventory account.
Exchange Rate Differences Account (Expense)
This account is used when a target document such as an A/P Invoice has a different exchange rate than the base document (GRPO) for items with foreign currency prices. A local currency variance is created due to the differing exchange rates which get posted to this account.
Goods Clearing Account (Expense)
This account is posted to when manually closing a Goods Receipt PO. See Allocation Account for further details.
G/L Decrease Account (Expense)
This is the default offsetting account when performing a material revaluation and inventory value is being decreased.
G/L Increase Account (Expense)
This is the default offsetting account when performing a material revaluation and inventory value is being increased.
WIP Inventory Account (Asset)
This account is used as the default offsetting account when posting Goods Issues for production. Inventory will be credited and WIP will be debited. The WIP Account is cleared when performing receipts for production.
WIP Inventory Variance Account (Expense)
On a production order, it's possible that the sum of the component costs don't add up to the cost of the finished product. In this scenario, the variance is posted to the WIP Variance Account upon closing the production order. This scenario happens frequently when finished products are managed by standard cost.
Expense Clearing Account (Liability)
This account is used in conjunction with the Allocation Account when additional expenses are involved. A GRPO posted with additional expenses will credit both the Allocation Account for the inventory, as well as the Expense Clearing Account for additional expenses/freight.
Stock In Transit Account (Asset)
This account is debited when an A/P Reserve Invoice is used. Once the inventory has arrived and a GRPO has been posted this account will be credited.
Sales Credit Account (Revenue)
When performing an A/R Credit Memo the revenue will be returned to the Sales Credit Account. It is recommended that this be set to the same account as your Revenue Account.
Purchase Credit Account (Expense)
When posting an A/P Credit Memo for a non-inventory item, this is the account where the expense will be returned to. It is recommended that this is set to the same account as your Expense Account.