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Detail Balancing of INV to Ledger Trial Balance

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It looks at each transaction code (assigned in SJI System Accounts) and assigns the dollars and quantities of these documents to a ledger accounts. So if you know what transaction code should be hitting your ledger account, then you know what document to be looking for when balancing.

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Stock Addition Vouchers: Debit Inventory Asset for the amount of the Line Items (IV-transaction code)Debit Inventory Asset for the amount of the service items allocated to them (IV-transaction code)Debit Expense Account for the amount of Service Items that Stand Alone (SE-Transaction code)Credit Accounts Payable for the amount of the voucher (AP-transaction code)

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Item Invoices: Debit Accounts Receivable for the amount of the invoice (AR-transaction code)Credit Inventory Sales for the amount of the Lines Items (SL-Transaction code)Credit the Sale Tax Payable for the amount of tax (S1-S4 Transaction code)Debit the Inventory Cost of Sales for the cost of the product (CS-Transaction code)Credit the Inventory Asset for the cost of the product (IV-Transaction Code)
Negative Inventory Adjustment – taking away inventory quantity or value Debit Cost of Goods Sold (AJ-Transaction code) Credit Inventory Asset (IV - Transaction code)

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Positive Inventory Adjustment – adding inventory quantity or value Debit Inventory Asset (IV - Transaction code)Credit Cost of Goods Sold (AJ-Transaction code)

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Negative Cost Adjustment – taking away inventory value Debit Cost of Goods Sold (CA-Transaction code)Credit Inventory Asset (IV - Transaction code)

Positive Cost Adjustment – adding inventory value Debit Inventory Asset (IV - Transaction code)Credit Cost of Goods Sold (CA-Transaction code)
Physical Count - Loss Debit Cost of Goods Sold (PC-Transaction code)Credit Inventory Asset of product (IV - Transaction code)
Physical Count - Gain Debit Inventory Asset of product (IV - Transaction code) Credit Cost of Goods Sold (PC-Transaction code)
Manufacturing – Making a new product from other products Debit Inventory Asset of Product being Made (IV - Transaction code)Credit Inventory Asset of product being used (IV - Transaction code)
Transferring Inventory – Making a new product from other products Debit Inventory Transfer Clearing Account at Loc of Original product (TC – Transfer Clearing)Credit Asset of Original Item product category (IV - Transaction code)Debit Asset of Receiving Item Product category at their location (IV- Transaction Code)Credit Inventory Transfer Clearing Account at their location (TC – Transfer Clearing)

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Step One:
Think about how you are balancing a transaction code on a document to the ledger. Example: balancing Inventory Asset, the transaction code that should be hitting it is IV-Inventory. And if only IV transaction codes should be hitting the Inventory Asset, then it can only be an AP Stock Addition Voucher, or an invoice, or one of the five inventory transactions (adjustment, cost adjustment, physical count, transfer, or a manufacturing. You have 7-document types that should affect this account.

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Step Two:
Build a current SJI Exec Work file that includes the current month you are trying to balance. It can include more time than the current month.

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Step Three:
Run the standard Ledger Account detail report for the AP Ledger Account. Compare the ending Transaction Total with the Trial Balance Change Amount to see if they are the same. Or the change amount from a Ledger Account Inquiry. If they are NOT, then data has been changed AFTER the SJI was created. This could be new data added or reversed, but something has been done to documents with IV transaction codes in the month that you have already gathered the data for the ledger.

Here, the amounts are $82,000.00 different. This is stating that if we re-ran the SJI's again for this time period, it would post a larger debit to the ledger. There was a document that was entered/edited/reversed using a back date, or date into a month that the SJI had already been run. What were these documents?

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Step Four:
If INV is out of balance then OTHER accounts are out of balance as well. If we can find the other accounts then it will give us a heads up of the type of voucher or disbursement record that we are looking for. Now in our example above, it's pretty obvious why it's off. But if you had your normal range of data, then just eyeballing the document would not work.Run the SJI Execution ID report called MIMIC SYSTEM JOURNAL REPORT using the parameter settings to limit this report to just entries from the IV package. SJI > Report manager > Execution ID reports > Standard Reports > MIMIC SYSTEM JOURNAL REPORT >
Key in date range to match ledger period > go to Additional Options > Answer NO to everything but INV.This will give you only the entries that posted with the INV SJI Creation Process
Compare this report to the standard SJI Entry report MIMIC EXECUTION ID REPORT. SJI > Report manager > Journal Entry Reports > Standard Reports > MIMIC EXECUTION ID REPORT >Select IV to IV for Source parameter and the current period
This gives you all the entries that did post.

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1. Get the exact date the SJI's were created from the SJI reports. You can read this from the upper-left hand corner of the reports or from the saved documents in the report spool. 4/13/14 at 7:23 pm or 19:23 hours

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2. Run an inventory audit report looking for any transaction that had a ledger date up to the ending SJI period but was actually keyed in after the SJI creation date. INV > Report Manager > Inventory Audit Reports > Standard > Inventory Audit Report – By Date Entered

   

3. This report will show everything that was keyed and when. So we are looking for anything with a ledger date of 9/30 or earlier that has a physical entry date the SJI Creation date at 7:23 PM.

This finds that I had two transactions keyed AFTER SJI creation. Reverse Inv count for 310 units at zero dollars 999-QZ0085
Stock Adjustment for 410.00 units at $200 average cost for $82,000.

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Step Five:
Make a manual ledger entry to post the backdated entries into the ledger. Debit Inventory Asset for $82,000.00Credit Cost of Goods Sold for $82,000.00

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Balancing Inventory Asset Account – 1340-6EDifference of $78,500

Step One:
Think about how you are balancing a transaction code on a document to the ledger. Seed Corn Inventory (account 1340-6E) is out of balance by $78,500. If the asset is out of balance, then another account is out of balance too.

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Step Two:
Build a current SJI Exec Work file, if one is not already built.

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Step Three:
Run the standard Ledger Account detail report for the Inventory asset account.

Compare the ending Transaction Total with the Trial Balance Change Amount to see if they are the same. Or the change amount from a Ledger Account Inquiry.

So in this case, there was no change amount in the ledger for 1340-6E and there are no documents for 1340-6E. So nothing was backdated. So there is nothing that the Exec Work Files can give us. They are zero and our change status is zero, so nothing was backdated.

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Step Four:
Now we go to see what happened to the items in this product category by running an inventory activity report for all items in 6E for the month.
Now we can see that there was a stock addition for $78,500 keyed on 9/25.So why is this not in the ledger? To further research, now go back and run the inventory audit report for this product category.INV > Report Manager > inventory Audit reports > Inventory Audit – on hand > Limit to this product category of 6E for the ledger month.
Here we find that one transaction was definitely keyed PRIOR to the SJI run of 4/13 at 19:23 pm.The second transaction, a stock addition adjustment, was keyed AFTER the SJI's were created.This means that at least some of this should have been in the SJI's.

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Step Five:
So now we must look at the Accounts Payable SJI Creation reports, looking for document #999-VA0392. This is one of the reasons that we request you keep these documents.
In this case, we can see that voucher 999-VA0392 was in the SJI Creation Process.Our problem is that AGRIS did not know where to post the IV code for 6E, thus the series of asterisks on the report.1. Setup the SJI code for future Posting.
2. Move the dollars from the system clearing into the 1340-6E account.
Debit Inventory Seed for $80,000Credit System Clearing for $80,000

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Snowball Effect of Balancing

Step One:
As you make the entries in your research we will see that the difference in the Inventory Asset is changing with each entry. Now we are only off by $1500 in Account 1340-6E. We are using each entry to find the overall issue with Accounts Payable.

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Step Two:
Now we know that we are only $1500 off and it was NOT a backdating issue per the SJI Ledger Account detail Report vs the Trial Balance change Amount.
However, we also know but they Inventory Audit report that we did have a backdated document on a product category that was not defined in the SJI System account setup. Since it was not defined in the SJI system Setup, the backdated document will not show in the work file reports. The SJI Exec Work file does not show dollars for:

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Step Three:
So the only option is to make a manual ledger entry posting the "Adjust Stock Addition Entry" manually to the ledger.
Debit Accounts Payable for $1500Credit Inventory Asset 1340-6E for $1500

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Step Five: Run your trial balance one more time to compare to the Inventory Activity Summary Report.
You are now in Balance!

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