Inventory Adjustment

Process Group/Policy Details

• Subject: Inventory

• Process Group: Adjustment

• Title of Policy: Inventory Adjustment

• Effective Date: 07/01/2014

• Approved/Revision Date: 07/01/2014

• Approved by: State Controller

Process Group Description

• • The process group includes all tables necessary for inventory counts and related adjustments in each warehouse operated by the State of Colorado.

Rationale or background to policy:

• • To ensure consistency for inventories operated by the State of Colorado including adjustments and corrections, a policy is required.

Policy Statement:

INV.PO.01 Inventory Adjustment

• • Departments shall use an Inventory Adjustment (IA) Transaction when the quantities of a given commodity or unit cost of a stock item need to be adjusted for accuracy. If quantities cannot be adjusted by the IA transaction; departments shall use the Inventory Correction Transaction (IC). The Inventory Correction Transaction shall only be used to adjust for accuracy in the following events:

    •  Reserved Quantities

    •  Released Quantities

    •  In Transfer Quantities

    •  Backorder Quantities

    •  Currently Requested

    •  On Order Quantities

Procedure Statement:

INV.PO.01.PR.01 Inventory Adjustment

• • The Inventory Adjustment Transaction will be used in the event where:

1. Inventory quantities do not match physical count

2. Adjustment to cost is needed

3. Inventory is damaged and no longer consider in stock

4. Inventory has been sent back to the vendor due to recalls

• • The inventory module tracks the movement of inventory throughout the lifecycle in the Inventory Table (INVN). Moreover, the Advantage Inventory subsystem provides the ability for users to adjust inventory levels on a manual basis which allow stock items to be selected for counting, flagged for discrepancies, and on-hand quantities to be reconciled with actual quantities. Also, the module gives users the ability to adjust all inventory quantities that do not impact the on-hand quantity as they move throughout their lifecycle.

  • When creating an Inventory Adjustment transaction, it will be required that all transactions are selected for auto numbering. The following fields are required when creating an inventory adjustment transaction:

    • Header: General Information:

      • Transaction Name, Transaction Description, Record Date, and Warehouse

    • Commodity: General Information: Must insert new line to begin

      • Stock item, Stock item Suffix (if used)

    • Commodity: Adjustment Information:

      • Change in Quantity, Change in Unit Cost, Adjustment Code

    • Accounting: General Information:

      • Event Type

    • Accounting: Fund Accounting:

      • *** Save, validate, and submit

INV.PO.01.PR.02 Inventory Correction

• • The Inventory Correction will be used in the event where adjustments to quantities not available on the standard inventory adjustment transaction are needed. Access to the Inventory correction transaction should be highly restricted as actions performed can cause downstream transactions not to process correctly. It is the intention of this transaction to be used as a last resort when there is no other way to adjust quantities associated with Reserves, releases, in transfer, backorder, currently requested, or on-order.

  • It is required when creating an Inventory correction Transaction, that Auto numbering be utilized. The following information is required when creating an IC transaction:

    • Header: General Information

    • Commodity: General Information – A new line must be inserted in order to adjust

      • Stock Item, Stock Item Suffix (as needed)

    • Commodity: Adjustment Information– One of the following six situations regarding changes in Inventory must be selected from:

      • Reserved Quantities

      • Backorder Quantities

      • Released Quantities

      • Currently Requested

      • In Transfer Quantities

      • On Order Quantities