Adjustments vs Balance Adjustments

This article is designed to go over the basic differences between an Inventory Adjustment and an Inventory Balance Adjustment.

An Inventory Adjustment transaction is designed to add or remove inventory OnHand value at whatever the current Cost of a product is. That’s about all an Adjustment is designed to do. You can define the product, warehouse, transaction date and quantity (negative or positive) and the number entered (adjusting quantity) will be added or removed.

In the screenshot below, we can see that an Adjustment is being posted to add a quantity of 10 to warehouse D for product A121 as of 2/8/2016. Notice that no Cost is defined, only the quantity.

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The next screenshot shows the OnHand value of A121 before the Adjustment was posted, the second screenshot shows A121 after the adjustment was posted. You can see that the OnHand quantity in warehouse D increased from 14 to 24.

 

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Like an Inventory Adjustment, an Inventory Balance Adjustment can make changes to your OnHand value, but the Balance Adjustment doesn’t stop there. An Inventory Balance Adjustment can also make changes to the Cost of a product.

In the screenshot below, we can see an Inventory Balance Adjustment being posted for A121. Like the Adjustment, the Product, Warehouse and Date are defined. Unlike the Adjustment, though, notice that the Unit Cost can be defined. Also, the Quantity will pre-populate with whatever the current OnHand value is for that product in that warehouse (24).

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Unlike an Adjustment where you enter the adjusting quantity (to add 10, enter a quantity of 10) a Balance Adjustment will enter whatever your OnHand value (and cost) should be. Meaning that, if you walk into your warehouse D and count 30 of A121, the quantity you enter on the Balance Adjustment will be 30.

In the next screenshot we can see that the Quantity has been modified from 24 to 30 and the Unit Cost was changed from $2.37 to $2.5.

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Next, we can see the changes made by that Balance Adjustment on the Transactions tab of the product window for A121. Notice that the adjusting quantity is 6 as that was the number required to take the OnHand value from 24 to 30 (adjusting quantity). Also notice the Cost has been modified from $2.37 to $2.50. Even though several transactions have posted in the past which established Cost at $2.37, transactions moving forward will use the modified Unit Cost of $2.50.

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To recap, an Adjustment transaction is designed to add/remove OnHand value of a product using whatever the current cost is, and the quantity entered is the adjusting quantity. A Balance Adjustment is designed to add/remove OnHand value also, but it has the ability to make changes to the Cost of the product, and the current OnHand quantity should be entered, not the adjusting quantity. Another important difference between Adjustments and Balance Adjustments is that an Inventory Balance Adjustment will always post as the last transaction of the day. Meaning that, if a user posts a Balance Adjustment at 9 AM then posts several other transactions after that on the same day, the Balance Adjustment will effect all transactions for that day. Balance Adjustments can have several other functions as well, but those are the basic differences between Adjustments and Balance Adjustments.

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Posted in Inventory - Last modified on February 9, 2016Matt Allen
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