ingredients physical inventory

The system has the option to record physical inventory transactions for both ingredients and feed. There are two types of physical inventory transactions.

• Non-Inventory: This transaction type is only used for internal reporting purposes to analyze inventory quantities. There is no quantity adjustment or valuation on this type of physical inventory transaction.
• Adjustment: The adjustment transaction is used when the difference between perpetual and physical inventory is to be reported for financial purposes. Valuation is determined at global post and the difference is reported as a shrink variance.

Regardless of the type of transaction, the user can load the existing perpetual quantities and enter the actual physical amounts. The system will calculate the difference in the perpetual and physical quantities.

In the Feed Mill registry, the noted switches determine how the physical inventory transaction is recorded.

• Inventory Cost Mode - determines if the inventory is valued based on Average Cost for the global post period or First-in First-Out (FIFO).
• Inventory Time Mode - indicates if transactions are represented by Date Only or Date Time.
• Shrink Variance Mode - if the option is set to Excluded, the physical inventory adjustment is expensed to an overhead variance account. Selecting the Inventory option will allocate the ingredient physical inventory adjustment to feed production which will then be allocated to deliveries and ending inventories.
• Unposted Product Cost Estimated Calculation - if the switch is set to true, the cost of the physical inventory adjustment will be estimated based on the transactions entered at the time of the adjustment. Global post will adjust the transactions to the actual cost. If the switch is false, the value of the adjustment will remain as zero until the global post process is run to record the adjustment at actual.

The following topics are covered in this document related to physical inventory transactions:

• Creating a Physical Inventory transaction
• Posting a Physical Inventory Transaction
• Reporting Physical Inventory Adjustments

Create a Physical Inventory Transaction

1. In FMTS>FMIM>Transactions>Ingredients, select Physical Inventory.
2. In the Ingredients Physical Inventory main index, selectto create a new inventory record.

3. From the Trans Code drop-down menu, select the transaction code. Options are:

1. • Non-Inventory: This transaction type is only used for internal reporting purposes to analyze inventory quantities. There is no valuation on this type of physical inventory transaction.

   • Adjustment: The adjustment transaction is used when the difference between perpetual and physical inventory is to be reported for financial purposes. Valuation is determined at global post and the difference is reported as a shrink variance.

4. In the Trans Date field, enter the date of the transaction. If the Registry>Feed Mill>FMIM>General>Inventory Time Mode = Date Time, the time must be entered in the Trans Date field as well. When using  the Adjustment mode and the Average Cost valuation mode is being used, the Trans Date must equal the end date of the global post period. If the FIFO mode is being used, then the Trans Date can be any date within the global post period.
5. From Feed Mill No, select the required feed mill.
6. Click 'OK'.

7. In the Ingredients Physical Inventory main screen, create a new transaction by selecting one of the following options:

• Selectto create a single record

• Click on the down arrow beside the button and select 'Auto-load From Inventory'. This will load all ingredients in inventory with the perpetual quantities available.
  

8. The Ingredient No represents the ingredient that will be recorded in the physical inventory adjustment. The ingredient will default if the auto-load option is being used or selected if the inventory is being entered for each ingredient.

9. Ingredient Name will default from Ingredient No and displays a description of the Ingredient.

10. Silo No is an optional field used to record the silo location.
11. Silo Name will default from Silo No and displays a description of the silo.

12. Lot No is an optional field used to record the lot number for the received ingredient.

13. Ref No is an optional field, and is the reference number for the physical inventory transaction.

14. The Consignment flag will be selected if the product has been received to consignment inventory. Consignment inventory is received from a Consignment Purchase Order and does not have a corresponding value until the product is transferred to inventory using a Consignment Transfer.

15. Consignment Complex PO No will be populated if ingredients are received on consignment.

16. Enter the Empty Space of the silo and hit 'F12' while still in the field. This calculates the quantity based on the dimensions of the silo, the density of the ingredient, and the empty space. Empty Space is an optional field.

17. Quantity is the amount of product in perpetual inventory. Enter the amount of actual inventory in this column.  When the record is saved, the Adjustment Quantity and the Adjustment Value will be calculated.

18. Book Quantity indicates the amount that is showing up in inventory.

19. Adjustment Quantity displays any discrepancy between Quantity and Book Quantity.

20. Adjustment Value displays the value of any adjusted quantity and will calculate based on the amount in Adjustment Quantity.

21. In the Comments field, enter any additional details related to the transaction.

Post a Physical Inventory Transaction

The Physical Inventory transaction is posted using the global post process. Global Post process will valuate the shrink adjustments and the ending inventory based on the selected valuation mode of Average Cost or FIFO.

Once the global post has been run, the posted flag will be visible in the line item and the Adjustment Value will be recorded at the actual amount for the period based on the valuation mode of Average Cost or FIFO. The ending inventory quantities and values can be viewed by generating Inventories>Ingredients.

Report Physical Inventory Adjustments

Within the system, there is a standard system report that generates the inventory details for the period and provides the calculations for the shrink variance incurred in the period. This report can be used or alternatively the report can be copied and modified as required. The report can be run from various locations and can be mapped to any screen as required. The following process outlines the process from running the report from the View All Layouts screen.

1. In MTech, select Reports>View All Layouts.
2. Locate FMIM031>Usage & Shrink Report.
3. Enter the required prompts and click the OK button.

    

   

    

4. Select Options>Print Preview to view the report details.

5. Product No - represents the ingredient that is detailed on the report
6. Product Name - description of the ingredient.
7. Type - determines if the report line is one of the following:

    

   	Metric	Imperial
   Quantity	Kgs	Lbs
   Per Unit	Kgs/Value	Lbs/Value
   Amount	Value	Value

    

8. Beg. Inv - represents the beginning inventory for the ingredient
9. Received - indicates the amount of the ingredient received in the period from purchases, external transfers, facility transfers.
10. Used - indicates the amount of ingredient used in the period by feed production, sales or facility transfers.
11. Adj - displays the amounts entered in Ingredients>Adjustments for the period.
12. End Inv - is the ending inventory for the period.

                           Ending Inventory = Beginning Inventory + Received - Used +/- Adjustments

13. Phyiscal - displays the perpetual inventory quantity .

14. Shrink - represents the adjustment between the perpetual inventory quantity and the actual inventory quantity.

15. % Shrink - calculated field that represents the shrink percentage for the period.

                                          % Shrink = Shrink / Ending Inventory x 100