If you ever tried to reconcile your inventory balances with your ledger balances, you might have come across the inventory value report. This report and its setup is described in many blog posts and white papers. Yet, despite all the available information, the setup of this report often remains unclear for many finance users due to the numerous setup options and missing “best practice” guidelines.
This posts aims to close this gap by focusing on the different setup parts of the report and by providing you with some specific finance backgrounds on the selection of the one or the other report parameter. For this purpose, I divided the report setup into the following five blocks:
(Please note that this blog post will be split into three separate blog posts for reasons of readability and due to its length).
Setup the default date interval that is pre-populated when opening the inventory value report
Select “posting date” or “transaction date”. Note that the transaction date option was introduced with the moving average inventory valuation model. For additional details, see this website.
The dimension set allows you – in combination with the column setup of the inventory value report (see further below) – a direct comparison of the inventory and the ledger balances. This is realized by showing a financial section at the end of the report. See the following screenshot for an example.
Running the inventory value report with the main account financial dimension set is fine as long as no difference between the inventory values and ledger balances exist. Yet, once the report shows a discrepancy, running the report with a dimension set consisting of the main account and item ID can help you identifying the discrepancy faster. Example:
Please note that running the inventory value report with the main account and item ID financial dimension set requires that the General Ledger account structures include the item ID as a financial dimension and that all items are setup with their item IDs as illustrated in the next screenshots.
Please note that this setup needs to be in line with the setup of the storage dimension groups. As an example, selecting the “Palled ID” dimension does not make much sense if financial inventory values are not tracked at this level.
From a “best practice” perspective, the setup of different inventory value reports with different levels of details can help you identifying discrepancies faster and easier by successively running the different report versions.
…to be continued in the next post.