If you are attempting to reconcile these values, refer to the points below for assistance. Further manual calculations may be required in order to truly reconcile the values but in some instances, it may not be possible to reconcile them via any method.

General Considerations

When Sage Manufacturing is not used, the default reconciliation method will be to compare the overall current balance of the Stock Asset Nominal code with the overall total shown at the bottom of the Stock Valuation report (when ran without changing the date, as doing so makes the report Retrospective). The Stock Asset nominal code will be affected by all types of stock transactions, such as Add Stock, Record POP Invoice, Write Offs and SOP Confirm Goods Despatched.

On the Stock Valuation report, there will be 2 'Value' columns shown. Ideally for reconciliation, both of these columns should show the same figure. If not, it means that there is ‘Unconfirmed’ stock present which will use Average Buying Price for the costs regardless of Costing Method. This is normally due to the POP Setting for ‘Update Price When Goods Are Received’ or, in Manufacturing, it may be that a Works Order (or Sub-Assembly level) has been Completed but not yet Closed.

On the Nominal ledger side, similar to when performing an Aged Debtors/Creditors reconciliation, you need to exclude from the balance any transactions that have been made direct to the Asset nominal code, for example, opening balance journals. This is because such transactions represent those that have not come from a source associated with a ‘Stock’ module e.g. Stock/Sales Order Processing / Purchase Order Processing / Manufacturing.

WIP Nominal Code (Manufacturing)

The ‘Work In Progress’ nominal code is a temporary holding place for the value of the stock that has been issued to a Works Order that is in the process of being built. Other costs may include Operations, and also sub-contracting if an external supplier is involved as part of the process. Once everything has been completed, the Works Order is then Closed and the costs are rolled-up to form the overall cost of the finished item. At this point, the Work In Progress balance for this Works Order should be zero.

Therefore, when reconciling with Manufacturing is involved, you also need to consider the balance on the WIP Nominal Code as well as the balance on the Asset Nominal code. This is due to the fact that Works Orders should not be marked as Closed until all costs have been accounted for, but this could take a while in ‘real life’ – for example, completing a Works Order will affect the Stock Levels, but only Closing will affect the Nominal ledger.

Standard Cost (Variance)

When a Stock Item is set to the Standard Costing method and it is sold/used, the cost value will be calculated based on the Standard Cost specified on the Stock record. Any difference in price will be recorded as a Standard Cost Variance, which can be posted to the Nominal ledger via the POP Maintenance option, when the ‘Reset Variances’ feature is used.

Example:

• Stock Item has a Standard Cost of £10 entered on the stock record.
• Stock is bought in (via Purchase Order Processing or Stock) for an actual price of £12.
• Stock is now sold/used – the Cost value used (i.e. for Cost of Sales postings) will be £10.
• This leaves a difference of £2 in the Asset of Stock nominal code, meaning trying to Reconcile at this point would mean that Stock and Nominal would be ‘out’ by £2.
• The Standard Cost Variance feature needs to be processed to account for this difference, post nominal journals and therefore aid reconciliation.

Retrospective Stock Valuation

When running the Stock Valuation report, the default report will use information held in the MovementBalance database table. If the Valuation Date criteria is changed when running the report this changes the Valuation report to be Retrospective. This means that:

• The (Stock) TransactionHistory database table will be used to obtain values.
• Only ‘Confirmed’ stock will be shown (and therefore only one Value column will be displayed).
  
  

Nominal postings – Waiting/Deferred

When reconciling, there must be an awareness of transaction dates. By default, running most stock reports will show the effect that any transactions have had on the stock levels, but this is largely independent of date. However, on the Nominal side, the date is extremely important and in order to reconcile, the user may need to consider 3 separate areas.

• Posted - for example, looking at the overall balance of the nominal code.
• Pending/Waiting postings - An Accounting Period may have been opened but Waiting Postings not updated yet.
• Deferred – Any transactions dated future to the current Period, or where an Accounting Period has not been opened yet.

Unconfirmed Stock Value:

In order to establish where the ‘Unconfirmed’ stock value is coming from, it would be beneficial to look in the following areas:

• POP Order and Return Accruals feature – The ‘Value to be Accrued’ column will show the value of the items that have been received but not yet invoiced.
• Run the (POP) ‘Fully Received not Fully Invoiced’ report to give similar information.
• Manufacturing – If a Works Order cannot be Closed, run (WOP) ‘Works Orders Unconfirmed Costs’ report to find out why.

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