--- title: "Reconciling stock to the General Ledger" canonical: "https://kb.myframeworks.com.au/space/PROSTIXV48DOC/31100282/Reconciling%20stock%20to%20the%20General%20Ledger" format: markdown --- This process explains how to reconcile Stock to the General Ledger. Refer to the following processes for further information: Introduction ProStix has a Stock Movement audit for the purpose of Reconciling Stock Valuations to the General Ledger Stock Balances. It does this via two reports. The first is a report that runs automatically each night to compare G/L Stock Balances to the Stock Valuation. If there are discrepancies found by this report, then they can be further investigated using the second report, the 'Stock Movement Reconciliation'. This second report can narrow down to a Branch, Product Group or Product to search for any reasons why the GL Balance does not match the Stock Valuation. Both reports rely on Stock G/L Accounts being defined at a Product Group/Branch level. The reports will not work if there is just a single Stock Account defined for all Product Groups within a Company. Balancing General Ledger to Stock (G/L Stock Balance Report) This report will generally be run overnight (as a scheduled task). The reason for this is that during the day, both the G/L Stock Balances and the Stock itself are constantly changing. If the Balancing routine were to execute at that time, it would never balance because as soon it retrieved a G/L Stock Balance, the Stock it is trying to balance to would change, therefore never allowing it to balance. When this option runs each night, it reconciles each Stock G/L Account to the actual stock that it represents. This association may be as simple as one G/L Stock Account per Product Group per Branch, or one G/L Stock Account per many Product Groups within a Major Product Group at Branch. In each case, the Balance of the G/L Account will be matched to the value of Stock holdings within the Group/Branches linked to that G/L Account. Example 1 - One G/L Account to a single One Product Group at the Branch G/L Account 100206 will be reconciled to the Stock Holdings of Product Group 2100 at Branch 1 and so on. Example 2 - One G/L account to a Major Group at the Branch G/L Account 101000 will be reconciled to the Stock Holdings of Product Group 2100, 2200 and 2300 at Branch 1 and so on. Each morning there will be a report spooled detailing any discrepancies between the G/L Stock Balances and the actual stock. Accessing overnight reports Overnight reports produced in this manner get stored in the ProStix spooler and are not printed. It spools the reports for the user defined in tailoring options (Codes - 'AdminUser'). To access this report each morning, perform the following: 1. select in ProStix to access the spooler and you will see the report listed for that user. You can view it and then print it if necessary. The report may show one of three things: 1. No errors . This means that all G/L Balances (within the range of branches you selected to report on) match the actual Stock Holdings for those branches, and there's no further action. 2. That the G/L Balance does not match the actual Stock Holdings . If they don't match, the report will show the G/L Balance and the Value of Stock Holdings of each Product Group associated with that G/L Account. It will then show a variance between the two of them. If this is the case you will need to run the Stock Movement Reconciliation Report to try and determine why there is a discrepancy. From the ProStix Main Menu select 'Systems Administration' then 'Security' then 'Audit Log Enquiries' then 'Inventory Audit Reconciliation'. 3.That the actual Stock Holdings only match to the G/L Balance in the next period . This can happen when an invoice dated in the following month is released. This doesn't actually signify a problem, however it is reported anyway as an explanation why the Stock Holdings don't match the current G/L Balance. The report can be run during the day however as the warning states (when you select it), be absolutely sure that there are no active Prostix users for the duration of the balancing routine. 2. Simply select the branch range to balance, then select a printer to send the report to. Inventory Audit Reconciliation As mentioned above, the Inventory Audit Reconciliation should only be needed when a discrepancy is found using the overnight balancing routine (G/L Stock Balance Report). The Inventory Audit Reconciliation reconciles stock by winding all stock movements back from a selected point in time, and checking for discrepancies that might explain the variances shown in the Stock Balance Report. As it does this it verifies that the status of given stock item was the same at the start of a stock transaction as it was at the end of the previous transaction for that same stock item. After verifying the stock transactions the report performs one other task. Another way of causing the Stock G/L Balances to not match the actual Stock is to perform a G/L Journal. A G/L Journal that is applied to a Stock G/L Account has no corresponding Stock Movement and therefore creates a discrepancy. The second half of the Reconciliation attempts to find any of these Journals. When selecting this report the following options will be available: The first three ranges are fairly straight forward. Simply select the Branch, Groups and Products you want to reconcile. Usually you would choose a single branch and a product group range as this would most likely represent a single discrepancy found on the overnight balancing routine. The date range defaults to yesterday's date until now. It does this because it assumes that you are checking the overnight balances each morning and therefore will only ever want to reconcile from the previous day. To run the reconciliation for another date range, simply change the dates. If the report is run up until the current date, the reconciliation will run from the current stock status and reconcile backwards from there, however if the report is run for a date range not including the current day, then the reconciliation will start winding back from the last transaction on the 'Date to Reconcile Up To'. This transaction itself also needs to be reconciled, so the reconciliation will in reality start from the next transaction after that date. Example Currently a sample product has 180 On Hand at a cost of $1.20 If the reconciliation were run for the 19/11/02 only, then those transactions in italics would be reconciled. This is to ensure that the transaction at both the start and end of the date range selected balance completely. If there had been no transactions on the 21/11/02 in the example shown, then in the absence of any future transactions, the reconciliation for the 19/11/02 would have had no choice but to reconcile from the current stock values. If 'yes' is selected at the 'Products with Discrepancies Only' prompt, the reconciliation will only print details of any products that do not reconcile or are of a suspicious nature.Selecting 'no' here will cause all products within the range selected to print on the report irrespective of whether or not discrepancies are found. If 'yes' is selected at the ' Show only Unreconciled Audit Entries per Product ' prompt, for the products that print on the report - see previous option - the reconciliation will only print transactions that either don't reconcile or are suspect. By selecting 'no' here, all transactions will be shown for the products printed on the report. The report output is in Branch then Product Group order. Each product appearing on the report will display basic product details followed by its transactions starting from the newest transaction and moving down to the oldest transaction. If any discrepancies are found then an alert will be shown following that transaction. The table below shows each alert and the course of action to take regarding it. Reconciliation Alerts The following table lists the possible alerts that may appear below a transaction (shown on the report). Where specific data is shown within the alert message sample, an approximate format is shown. On the right hand side of the table, the possible causes are listed along with action that can be taken if necessary. In all cases, if the suggested cause is not found to be true, or the suggested action doesn't rectify the problem, contact Sterland Computing for further assistance. As mentioned, there is also a second section of the report that attempts to find any G/L journals applied to the G/L Stock Accounts. Any Journals found will be reported in the second section of the report and could well explain a variance found in the Stock Balance Report.