The history of the problem is quite long and complicated so I’ll try to use simpler example. Let’s say that we made fresh implementation. We prepared Item Journal with item number, location, quantity and cost for initial inventory entry and posted it. Then we started to use the system and used it for a month. After that we found out that costs and quantities used in initial Item Journal were wrong. Of course, it means that applications of item entries were wrong, costs in item ledger entries (value entries) are wrong and that general ledger inventory and COGS accounts are wrong. What shall we do?
The only way I can see is to manually adjust item costs in value entries of initial item journal and then somehow reapply item ledger entries. Simple run of “Adjust costs” doesn’t do the work since it ignores already processed entries and I want to process just those entries. Does anyone know how to tell “Adjust costs” to reprocess all entries? Does anyone have any other idea how to correct the problem?
Ignore the general ledger for a moment. Focus just on item ledger entries, value entries and item application entries. I can fix the general ledger afterwards.
There are 2 Issues to address your problem.
Inventory qty posted is wrong
Item cost posted is wrong
For Problem 1, Use Item journal to do a negative adjustment for the qty posted and re post the correct qty by Postive adjustment.
For Problem 2, Use the Revaluation Journal to revaluate the cost for all the Items which were posted wrongly.
one question though: as far as I understand Revaluation Journal revaluates only open quantites. I need to revaluate already applied quantities.
You can revaluate applied entries too.
This is a major issue and deserves your total attention.
I have been thorugh this with a small number of items, posted at the wrong valuation price.
NEVER try to update the tables and values directly (Object Designer, Table, Run) or through reports.
Absolutley agree with and recommend the first repsonse. Managing inventory valuation is complicated and the only guaranteed method of correcting mistakes is to use the system to post correcting journals. You can test the process in a copy of the live database on a small set of data to validate the process and this may allow you to find a method for automating the work.
You are right to ignore the general ledger postings; when you correct the inventory postings the general ledger will be corrected.
There is a small ‘extra’ that you may consider. First, cancel all incorrect transactions. Second change create new G/L Accounts for inventory, revenue and COGS. Third change Posting Groups to use new account set. This will allow yout to do two tasks; check that corrections are correct and monitor new postings for validity.
If this affects a large volume of items you may also consider the potters’ favourite - start again.
Thanks to all,
I think that I can solve the problem now.
Thanks a lot again.