Implementing Inventory Fixes in Visual ERP

They say “you learn from experience”. Then in school you are taught that “you shouldn’t copy some one else’s answers”.  Well now that we are older, we are wiser.  Copying someone else’s answers or learning from their experiences is a wise move.  Well I have done a lot of learning over the years with Visual ERP’s inventory fix utilities and wanted to share a process that I use when testing and then implementing inventory fixes.

First to give you some background.  Visual’s FIFO costing is very sophisticated.  Just think about it.  When costing is run it puts together the FIFO layers, figures out values for returns, updates work order values and creates the Inventory and WIP balance reports.  This may sound easy but Visual could be dealing with thousands or 10’s of thousands of transactions.  That’s a lot of calculating.

Periodically there may be the need to run some of the fix utilities.  It is strongly recommended that any changes like these are made in a copy of your database first.  This gives you the following advantages:

• You have an opportunity to become more familiar with the fix tools. Note – some of these will need to be run by the Visual system administrator so you will need to co-ordinate with them.  Also, some can only be run when no one is in the system. A copy of the database shouldn’t have anyone logged in so you are good in the testing phase.
• You will have an idea of the expected financial impact.
• You will be able to assess the amount of time it will take to run the fix tools & costing utilities so when you run them in your live database you are prepared.

Here are the steps to do in the COPY OF THE DATABASE:

BEFORE YOU MAKE ANY FIXES

1. Run the 1^st 2 steps of costing utilities until you get no updates performed.
2. Create all manufacturing journals.
3. Post Manufacturing Journals.
4. Obtain the General Ledger account balances for:
   • WIP
   • Inventory
   • PO Accrual
5. Make a soft copy of the following reports:
   • WIP Balance *
   • Inventory Balance *
   • Inventory Valuation *
   • PO Accrual
   • Cost of Goods Sold from Post Manufacturing Journals.

* It is pretty easy to create queries for the WIP & Inventory Balance.  And even the Inventory Valuation.  This will speed up the process.

MAKING THE CHANGES

6. Run one of the utilities. When running you typically focus on a part or work order. NEVER run on the entire database.  Details of the utilities are a topic for another day.
7. Run the 1^st 2 steps of costing utilities until you get no updates performed. Keep track of the time.
8. Create all manufacturing journals. Keep track of the time.

ASSESSING THE IMPACT

9. Review postings to the General Ledger.
   • What is the impact?
   • Are there any unexpected postings?
   • Does it make sense?
10. Post the Manufacturing Journals.
11. Obtain the General Ledger account balances for:
    • WIP
    • Inventory
    • PO Accrual
12. Get values from the following reports:
    • WIP Balance
    • Inventory Balance
    • Inventory Valuation
    • PO Accrual
    • Cost of Goods Sold from Post Manufacturing Journals.
13. Compare to the BEFORE and AFTER General Ledger balances.
14. Compare to the BEFORE and AFTER reports. You want to make sure you are comfortable with the impact of these changes.
15. You may even consider reversing some of the entries from the manufacturing batches. General Journal entries could have been done previously to account for the changes.
16. Ensure Inventory Balance = Inventory Valuation.
17. Reconcile Inventory Balance to General Ledger.
18. Once you are satisfied with the testing & results run the utilities in your live database.

These steps were developed over the years.  One of my motivations was ensuring there were no unexpected results.  Sometimes they are not always easy to explain but having a static database where the changes could be researched is extremely helpful.  I hope you find this useful and can learn from my mistakes.  As they say “Better Safe Than Sorry”.