INVENTORY SET UP LESSON 6. Lesson 6: Inventory Set up LEARNING OUTCOME LEARNING OBJECTIVES

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INVENTORY SET UP

LESSON 6

LEARNING OUTCOME

The purpose of this lesson is to successfully set up the Inventory Module’s defaults and master files.

LEARNING OBJECTIVES

On completion of this lesson, you will be able to:

A. Set Inventory defaults. B. Create Inventory Master Files

Requirements: Carry on working in the Mikes Photo Shop Company.

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LESSON OVERVIEW

A

INVENTORY

Having created your Company database, Suppliers and Customer create the Inventory Master File.

Before commencing with any particular module, it is always advisable to first make sure that the defaults for that

at the default settings for t

1. From the system tree select the

2. Click on the Defaults Lesson 6: Section B

Create Inventory Master Files.

Lesson 6: Section A

Inventory defaults.

LESSON OVERVIEW

INVENTORY DEFAULTS

Having created your Company database, Suppliers and Customers, you are now ready to create the Inventory Master File. Inventory is also known as stock.

Before commencing with any particular module, it is always advisable to first make sure that defaults for that particular module are set-up to suit your business

at the default settings for the Inventory Module:

From the system tree select the Inventory Module and select Maintenance

Defaults Dialog. : Section B

Create Inventory Master Files.

: Section A

defaults.

, you are now ready to

Before commencing with any particular module, it is always advisable to first make sure that up to suit your business’s structure. Let us look

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Pastel Evolution © Pastel

3. The Inventory Defaults screen will display:

4. The screen defaults to the General

The following table explains the different options available

Option Explanation

Inventory Prices

Set-up how you would like the system to default the Inventory prices.

• •

Hint: [Ctrl] [F5] on documents will toggle between Inclusive and Exclusive.

Evolution Practitioner Cor

screen will display:

General tab.

different options available at this stage:

Explanation

up how you would like the system to default the Inventory prices.

Inclusive - shows the prices inclusive of Tax Exclusive - shows the prices exclusive of Tax. : [Ctrl] [F5] on documents will toggle between Inclusive and Exclusive.

ore Course Lesson 6• 3

up how you would like the system to default the Inventory

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Method of Integration

This option determines how Pastel Evolution processes the cost movements in the General Ledger.

1. Perpetual - This method continually posts the cost value

of the applicable transaction to the General Ledger cost of sales. This keeps the value of the Inventory control account in the General Ledger balanced to the Stock Value in the inventory module.

2. Periodic - A method of inventory valuation for financial

reporting purposes where a physical count of the inventory is performed at specific intervals. This accounting method for inventory valuation only keeps track of the inventory at the beginning of a period, the purchases made and the sales during the same period and is recorded under the asset section of the balance sheet. With this valuation method, it is much harder to track which individual items were destroyed or stolen, but a cross-reference can be made with the sales revenue to get a rough estimate of what was sold versus what was not. Many see this method as being inferior to the perpetual inventory method, which keeps track of inventory at the point of sale.

Which method to use?

To find assistance on this you can work through the Discussion on General Ledger Integration by pressing [F1] while your inventory defaults are on the screen.

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Pastel Evolution © Pastel Evolution Practitioner Core Course Lesson 6• 5

Allow Negative Inventory Quantities

This will allow transactions to take place even if it will result in a negative stock-on-hand value. This is usually left

deselected in which case Pastel Evolution will prevent your stock levels from going into negative values.

Do not use this option to allow items to be invoiced that you do not purchase normally e.g. buy-outs or labour, rather use the service stock item on the inventory item maintenance. This method is however, not recommended as it will have a direct and immediate impact on your stock costing.

Show Inactive Items in Lookup

When inventory items have been discontinued, you are able to de-activate them. Pastel Evolution will still allow historical look-ups of the product as well as the reprinting of documents such as Invoices and Goods Received Vouchers. When printing reports and so on you would usually not want them to appear.

As an example, perhaps a specific code has previously been discontinued and your company has now purchased the product again. If you do not make the product active again, you will not be able to select the product to process your Goods Received Voucher. If you attempt to re-create the item you will be warned that the item already exists.

You may now also select whether you want Pastel Evolution to post your sales rep and projects per document or per line. In a case where you have more than one salesperson making a sale, you may now log this on the document e.g. Stock Item A on Line 1 for Rep Peter, Stock Item C on line 2 for Rep James and so on.

Likewise with the projects you could also specify to allocate a different project per line.

Decimal Places

Pastel Evolution allows you to set your decimal places for quantity and values. Internally the values are stored to 13 decimal but the option selected here determines how accurate you would want values to be captured and displayed.

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Option Sales Representative Options Project Options Price Lists Force Options

5. Select the Inventory

The following table explains the options available on the screen above:

Option

Invoice Numbering

Automatic Numbering

Explanation

Sales Representative

You may now also select whether you want Pastel Evolution to post your sales rep and projects per document of per line. In a case where you have more that one salesperson making a sale, you may now log this on the document e.g. Stock Item A on Line 1 for Rep Peter, Stock Item C on line 2 for Rep James and so on.

Project Options With the projects you could now also specify to

different project per line.

This area will detail the different price lists available. If not created yet, right click and select Add

screen that appears and click OK.

Force Options Use these tabs to force agents to complete the projects

and/or sales reps field when processing transactions. Inventory tab:

Explanation

Invoice Numbering Here you will be able to set the numbering of your inventory

codes to automatic or manual.

Automatic Numbering You can specify the length and the alpha portion of the

number e.g. 6:3 for Hand Polish would generate a code HAN003 or 5:2 would generate a code HA003.

You may now also select whether you want Pastel Evolution to post your sales rep and projects per document of per line. where you have more that one salesperson making a sale, you may now log this on the document e.g. Stock Item A on Line 1 for Rep Peter, Stock Item C on line 2 for Rep

ith the projects you could now also specify to allocate a

This area will detail the different price lists available. If not Add / Edit. Complete the

agents to complete the projects and/or sales reps field when processing transactions.

set the numbering of your inventory

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Code Start As with all other modules, enabling the filter option is useful

for a large database. Where this option is selected, the agent will have to enter the specified number of characters before Pastel will begin to search for the item.

Tax Types The Tax Type defaults can

Lot Status You can assign a lot status to inventory.

6. Click on the Invoices tab. The following screen will appear:

This screen allows you to set up your numbering preferences for

7. Click on the Credit Notes tab. The following screen displays, allowing you to set your numbering preferences with regard to Credit Notes.

Explanation

As with all other modules, enabling the filter option is useful for a large database. Where this option is selected, the agent will have to enter the specified number of characters before Pastel will begin to search for the item.

The Tax Type defaults can be adjusted if need be. You can assign a lot status to inventory.

tab. The following screen will appear:

This screen allows you to set up your numbering preferences for Invoices and Quotes. tab. The following screen displays, allowing you to set your numbering preferences with regard to Credit Notes.

As with all other modules, enabling the filter option is useful for a large database. Where this option is selected, the agent will have to enter the specified number of characters before

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8. Click on the Goods Received Vouchers tab. The following screen will appear:

The following table will explain the options available on this screen: Option Goods Received Voucher Numbering Automatic Numbering Separate GRV from Suppliers Invoice

Advantage

invoiced out as soon as the inventory is received in the system Disadvantage

value on the suppliers invoice

Variance account (GL) that will need to be journalised to the correct COS/Purchases account.

not updated with the actual cost when processed.

Click on the Goods Received Vouchers tab. The following screen will appear:

wing table will explain the options available on this screen: Explanation

Goods Received Voucher Numbering

Here you will be able to set the numbering of your Goods Received Vouchers as well as specify

Evolution will link them to the general ledger.

Automatic Numbering

If selected, you can specify the number of characters to extend the number by. You are also able to specify a prefix to use.

If your company has various branches you may want to set prefix before the GRV, for example, MC GRV is Mayberry Central Goods Received Notes. This makes it easier to establish which branch’s Goods Received is being queried when the document number is quoted.

Separate GRV from Suppliers Invoice

This allows you to receive inventory into the system at a value (usually average or latest cost). You can then invoice out the inventory without the inventory going into negative stock. Once the supplier’s invoice is received the actual pricing can be captured on the GRV and the correct values can be transferred to the suppliers account.

Advantage of splitting the GRV from the suppliers invoice is that Inventory can be invoiced out as soon as the inventory is received in the system

Disadvantage is when the value, as accepted on the GRV

value on the suppliers invoice. The system will then have an amount in the Cost Variance account (GL) that will need to be journalised to the correct

COS/Purchases account. The inventory item’s cost, in the inventory module not updated with the actual cost, if the Supplier Invoice is di

when processed.

Click on the Goods Received Vouchers tab. The following screen will appear:

wing table will explain the options available on this screen:

Here you will be able to set the numbering of your Goods Received Vouchers as well as specifying how Pastel Evolution will link them to the general ledger.

If selected, you can specify the number of characters to extend the number by. You are also able to specify a prefix to

If your company has various branches you may want to set a before the GRV, for example, MC GRV is Mayberry

. This makes it easier to establish which branch’s Goods Received is being queried

ted.

This allows you to receive inventory into the system at a value (usually average or latest cost). You can then invoice out the inventory without the inventory going into negative

is received the actual on the GRV and the correct values can be transferred to the suppliers account.

of splitting the GRV from the suppliers invoice is that Inventory can be invoiced out as soon as the inventory is received in the system.

as accepted on the GRV, is different to the have an amount in the Cost Variance account (GL) that will need to be journalised to the correct

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GRV Transaction Code

Select the transaction code for Pastel Evolution to use when processing a Goods Received Note transaction. Here you can specify both a transaction code for the supplier’s invoice as well as the Goods Received Vouchers.

Use Automatic discount

Select this option to activate automatic calculations of discounts when processing the GRVs. On each supplier a discount percentage can be specified. Those that do not have a discount percentage will be left as zero.

The Use Automatic Discount option needs to be selected if you are going to allow automatic discounts while using this transaction and settlement discounts.

Transaction Reference

The transaction reference is important for using when querying transactions on the supplier’s statement. By selecting Supplier Invoice Number, Pastel Evolution will set the default reference to the supplier’s invoice number although you will still be able to trace your internal GRV number.

Importation Split

Importation Type’s Split Tax option is used for processing of Goods Received vouchers where additional costs such as freight and customs duty are incurred. Usually you receive the invoice from the foreign stock supplier as well as your freight clearing agent. The freight clearing agent will then invoice you for additional costs as well as taxes. The default tax type is selected here but you will still be able to change this on the transaction lines of the GRV.

The following table explains how entries will be posted in the system: When posting a GRV the system will post the following entries: Inventory

Module Quantity on hand will be increased by the GRV quantity

General Ledger (GL)

Excluding Tax Total GRV Value Dr - Inventory Control

Cr - Purchases Accrual Payables

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When posting the supplier’s invoice, the system will post the following entries: Inventory Module General Ledger (GL) - Payables Module

9. Click on the Return to Suppliers

your numbering preference and coding structures.

10. Click on the Adjustments

When posting the supplier’s invoice, the system will post the following entries:

Quantity on hand will be increased by the GRV quantity

General Ledger Dr Purchases Accrual

Dr Vat Account Cr Payables Control

Increase the suppliers balance by the value (Incl Vat) of the GRV

Return to Suppliers tab. The following screen displays, allowing you to set your numbering preference and coding structures.

Adjustments tab to set your numbering and coding preferences. When posting the supplier’s invoice, the system will post the following entries:

Quantity on hand will be increased by the GRV quantity

Increase the suppliers balance by the value (Incl Vat) of the GRV

tab. The following screen displays, allowing you to set

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11. Click on the Warehouse Transfers tab and Serial Number Tracking ta numbering and filters. If you are not registered for these modules, you

If you are not registered for these modules, the defaults tab will be This means that the system will not allow any defaults or processing modules.

12. The next tab is the Templates tab. The screen displays as follows:

This screen allows you to set you template numbering preferences.

13. Click on the Segmented Inventory tab to set your inventory segment preferences.

If you are going to use a Segmented Inventory system, Pastel will need to

restarted. For more information on Segmented inventory press F1.

Click on the Warehouse Transfers tab and Serial Number Tracking tab to set the numbering and filters. If you are not registered for these modules, you cannot access

If you are not registered for these modules, the defaults tab will be greyed out This means that the system will not allow any defaults or processing in these

The next tab is the Templates tab. The screen displays as follows:

This screen allows you to set you template numbering preferences.

Click on the Segmented Inventory tab to set your inventory segment preferences.

If you are going to use a Segmented Inventory system, Pastel will need to For more information on Segmented inventory press F1.

cannot access. greyed out.

in these

Click on the Segmented Inventory tab to set your inventory segment preferences.

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14. Click on the Costing

Option

Cost Method

The system will prompt you if you did not set all the required defaults.

Recommendation: You must

Latest Cost or Manual Cost the variances when purchasing are posted to this account.

Costing tab. The following screen will appear:

Explanation

You would now select the costing method to use when valuating your stock on hand.

The three methods are:

1. Weighted Average - Pastel Evolution will calculate the

value at the average cost of all stock being brought into the database.

2. Latest Cost - Pastel Evolution will calculate the value at

the cost of the last purchase of stock being brought into the database.

3. Manual Cost – Pastel Evolution

fixed cost for inventory items and does not change unless you change it manually in

You are able to change the method used at a later stage. If you do change the method used, you will need to reconfirm the balances on the inventory module to the balance on the general ledger stock control account. Provided that you are satisfied at that point that the cost price per item is correct, you will need to process a journal to adjust the values in the general ledger.

Recommendation: You must create a Stock Variance Account so that when using Latest Cost or Manual Cost the variances when purchasing are posted to this account.

now select the costing method to use when

Pastel Evolution will calculate the value at the average cost of all stock being brought into Pastel Evolution will calculate the value at of stock being brought into Pastel Evolution allows you to specify a fixed cost for inventory items and does not change unless you change it manually in the system.

You are able to change the method used at a later stage. If you do change the method used, you will need to reconfirm the balances on the inventory module to the balance on the general ledger stock control account. Provided that you are satisfied at that point that the cost price per item is correct, you will need to process a journal to adjust the values in the

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Before we continue do the following activity.

ACTIVITY 6 - 1

The objective of this activity is to set Set Mike’s Photoshop Inventory default

For more assistance ask your facilitator or trainer.

B

CREATE INVENTORY

During this section of the lesson we will create

CREATE DELIVERY METHODS

This section of the lesson will be covered by means of the following activity:

ACTIVITY 6 - 2

The objective of this activity is to create Mike’s Photoshop will require the following • Courier • Collection • By hand 1. Go to Maintenance…Inventory... Inventory…Maintenance…Delivery Methods 2. Click on Add.

3. Type in Courier in the text box and method.

4. Click OK.

Before we continue do the following activity.

set Inventory defaults.

s Photoshop Inventory defaults as displayed in the screens on the previous pages.

your facilitator or trainer.

INVENTORY MASTER FILES

During this section of the lesson we will create inventory master files.

DELIVERY METHODS

The objective of this activity is to create new delivery methods. Mike’s Photoshop will require the following delivery methods:

...Delivery Methods or from the system tree Delivery Methods.

Type in Courier in the text box and if needed a specific comment related to the delivery

your facilitator or trainer.

n the previous pages.

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CREATE INVENTORY GROUPS / CATEGORIES

Having confirmed and adjusted your inventory defaults, you will now be able to create your Inventory Items. You will start by creating a list of stock items that Mike’s Photo Shop will be using. You will then create a logical sequence of stock codes as well as groupings of items. There are two types of inventory items, namely:

Physical inventory item

This is an item that can be purchased and sold whilst keeping track of the quantity that is left in stock. It is an item that can be seen “in the flesh”.

Service stock item

This is generally an item that does not get purchased but is only sold. Examples include labour or delivery fees. The quantity on hand in Pastel Evolution is not maintained for service stock items.

Before you can group your inventory items, you need to analyse the business as

well as the stock items you are selling.

ACTIVITY 6 - 3

The objective of this activity is to create inventory groups.

Create the following for Mike’s Photoshop groups (only codes and descriptions, leave rest of

the options blank):

Code: Description:

GLOSS Gloss finished photos MATT Matt finished photos FRA Photo Frames

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2. Click on Add.

3. Complete the screen by entering the code and description of the groups. 4. Click OK.

5. Create the rest of the groups.

After creating all of the groups, your screen should display the following:

CREATE INVENTORY ITEMS

A generic process of setting up your product

This section of the lesson will be covered by means of the following activity: Cost Price Add Mark up %

by entering the code and description of the groups.

After creating all of the groups, your screen should display the following:

A generic process of setting up your product’s selling prices is:

This section of the lesson will be covered by means of the following activity: Add Mark up % Selling Price

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ACTIVITY 6 - 4

The objective of this activity is to create inventory items. This is Mike’s Photoshop’s comprehensive price list.

No. Code: Item: Group Pack

code Cost

Selling Price (excl) Price list 1 Price list 2 Price list 3 1 PHO001 Individual Photos Standard Size Matt MATT Ea 0.50 2.00 4.00 10.00 2 PHO002 Individual Photos Standard Size Gloss GLOSS Ea 0.50 2.50 5.00 12.00 3 PHO003 Individual Photos A5 Matt MATT Ea 2.00 4.00 8.00 20.00 4 PHO004 Individual Photos A5 Gloss GLOSS Ea 2.50 5.00 10.00 24.00 5 PHO005 Individual Photos A4 Matt MATT Ea 5.00 10.00 16.00 45.00 6 PHO006 Individual Photos A4 Gloss GLOSS Ea 6.00 12.00 18.00 54.00 7 FRA001 Photo Frames Wooden Finish Std FRA Ea 7.00 15.00 25.00 50.00 8 FRA002 Photo Frames Specials All Sizes Silver FRA Ea 11.00 25.00 25.00 50.00 9 FRA003 Photo Frames A5 Silver FRA Ea 15.00 40.00 80.00 120.00 10 FRA004 Photo Frames A4 Silver FRA Ea 30.00 80.00 120.00 160.00

Let us create inventory items now.

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3. The following screen appears:

4. Complete the screen by entering the code in the description in the Description 1 box.

5. Let us look at the option on the Item Type screen: • Ensure that the Active box is

• If the inventory item is a commissionable item, indicate it by ticking the box in the Type section as displayed in the screen above. This means that Sale Reps can earn commission on these items when sold to customers.

• By default any item is seen as a physic box in the Item Type screen.

• The rest of the screen is dependent on the specific add on module that needs to be registered on the system. They are:

o Serial Number Tracking o Warehousing

o Lot tracking

You can record serial numbers in one of the description boxes when creating the

item.

Complete the screen by entering the code in the Simple Code block followed by a detailed box.

Let us look at the option on the Item Type screen:

ticked in the Item Type section.

nventory item is a commissionable item, indicate it by ticking the box in the section as displayed in the screen above. This means that Sale Reps can earn commission on these items when sold to customers.

By default any item is seen as a physical item. When creating a Service item, tick the

The rest of the screen is dependent on the specific add on module that needs to be registered on the system. They are:

can record serial numbers in one of the description boxes when creating the

block followed by a detailed

nventory item is a commissionable item, indicate it by ticking the box in the Item section as displayed in the screen above. This means that Sale Reps can earn

, tick the

The rest of the screen is dependent on the specific add on module that needs to be

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6. Click on the Information

7. Compete this screen by selecting the group, bin location, pack codes and bar codes where applicable. If only one option applies to the item leave the rest of the screen blank.

In the Ordering

stock at any given time. For Mike’s Photoshop this will not apply yet, because his customers order on demand.

In the Linked Supplier

Click on New to create a new supplier or click on from the list that appears.

Information tab. The following screen appears:

Compete this screen by selecting the group, bin location, pack codes and bar codes where If only one option applies to the item leave the rest of the screen blank.

Ordering Information Section you can specify the levels of items that need to be in stock at any given time. For Mike’s Photoshop this will not apply yet, because his

mers order on demand.

Linked Supplier section you can link specific suppliers to the items being sold. to create a new supplier or click on Select to select the applicable supplier from the list that appears.

Compete this screen by selecting the group, bin location, pack codes and bar codes where If only one option applies to the item leave the rest of the screen blank.

Section you can specify the levels of items that need to be in stock at any given time. For Mike’s Photoshop this will not apply yet, because his

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8. Click on the Pricing tab. The following screen appears:

Set up the pricing structure for the item as follows:

Remember to select the correct applicable costing method. This screen also allows you to structure markup percentages where necessary by ticking the box in the

and specifying the percentage in the

9. The Defaults tab details the general ledger accounts involved when processing the specific inventory item.

10. The Incident History tab details the incidents that were

ab. The following screen appears:

Set up the pricing structure for the item as follows:

Remember to select the correct applicable costing method. This screen also allows you to structure markup percentages where necessary by ticking the box in the Markup Column and specifying the percentage in the Markup % column.

e general ledger accounts involved when processing the tab details the incidents that were created with regard to the item.

Remember to select the correct applicable costing method. This screen also allows you to Column e general ledger accounts involved when processing the

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11. The Images tab gives you the opportunity to import a picture of the item.

Click on Insert and browse to find the picture to insert. Click on the photo and click on Open. The picture will be imported and click

Refer to the data disc for pictures to import.

12. Click OK when you have completed all the relevant information pertaining to the item. 13. Create the rest of the inventory items.

For more assistance

tab gives you the opportunity to import a picture of the item.

and browse to find the picture to insert. Click on the photo and click on . The picture will be imported and click Save to save the changes.

Refer to the data disc for pictures to import.

when you have completed all the relevant information pertaining to the item. Create the rest of the inventory items.

tab gives you the opportunity to import a picture of the item.

and browse to find the picture to insert. Click on the photo and click on to save the changes.

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CREATE LOT TRACKING STATUS

Pastel Evolution has 4 default lot tracking 1. Not Approved

2. Approved 3. Rejected 4. Expired

If you wish to create additional lot tracking statuses, follow the next process: 1. Select Lot Tracking Status from any Inventory menu.

2. Click Add.

3. The following screen will display:

4. Complete the screen.

CREATE INVENTORY PACKS

A pack code is useful to specify how your inventory items are packaged e.g. Dozen.

You will then be able to calculate values based on these pack sizes on your documents and reports. E.g. 24 items or 2 Dozen items.

This section of the lesson will be demonstrated by means of the following activity:

ACTIVITY 6 – 5

The objective of this activity is to create inventory packs Mike has the following pack code:

Code Description

Ea Each

PK001 Pack of 2 A5 Silver Frames PK002 Pack of A5 and A4 Silver Frames

Mike’s Photoshop does not really require packs at this stage. 1. Select Packs from any Inventory menu.

2. Click Add.

LOT TRACKING STATUS

Pastel Evolution has 4 default lot tracking statuses, namely:

If you wish to create additional lot tracking statuses, follow the next process: from any Inventory menu.

A pack code is useful to specify how your inventory items are packaged e.g. Dozen.

You will then be able to calculate values based on these pack sizes on your documents and reports. E.g. 24 items or 2 Dozen items.

section of the lesson will be demonstrated by means of the following activity:

create inventory packs.

Size 1 2 Pack of A5 and A4 Silver Frames 2

Mike’s Photoshop does not really require packs at this stage.

s from any Inventory menu.

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3. Complete the following screen with the information supplied.

4. Click OK.

NAME PRICE LISTS

ACTIVITY

The objective of this activity is to Mike has the following price lists:

Create the abovementioned lists by going to any Pricelist names and then select

Complete the following screen with the information supplied.

PRICE LISTS

ACTIVITY 6 - 6

The objective of this activity is to name price lists. Mike has the following price lists:

Create the abovementioned lists by going to any Inventory menu…Maintenance

and then select Add. Name the price lists as depicted in the screen above This section of the lesson will be demonstrated by means of the following activity:

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CREATE TRANSACTION TYPES

When entries are posted throughout Pastel Evolution, the system needs to default certain processes. This includes the posting of the entries to the General Ledger and to the particular Module.

The correct set-up of these transaction types is vital to ens

the transactions becomes a simple task for the data capturer without having to have an understanding of the accounting processes that is occurring in the background.

This section of the lesson will be covered by means o

ACTIVITY 6 - 7

The objective of this activity is to edit and/or create transaction types. 1. Select Transaction Types from any menu.

2. The following screen will appear, listing the default transaction types of the system.

3. For this activity, highlight transaction type

4. Right click and select Edit, now you can change the name of the transaction type.

CREATE TRANSACTION TYPES

When entries are posted throughout Pastel Evolution, the system needs to default certain processes. This includes the posting of the entries to the General Ledger and to the particular

up of these transaction types is vital to ensuring that the actual processing of the transactions becomes a simple task for the data capturer without having to have an understanding of the accounting processes that is occurring in the background.

The objective of this activity is to edit and/or create transaction types. from any menu.

The following screen will appear, listing the default transaction types of the system.

For this activity, highlight transaction type INV (Invoice).

now you can change the name of the transaction type.

When entries are posted throughout Pastel Evolution, the system needs to default certain processes. This includes the posting of the entries to the General Ledger and to the particular

uring that the actual processing of the transactions becomes a simple task for the data capturer without having to have an

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5. The following screen displays:

6. Highlight the description

7. The following table contains guidelines with regard to the different areas that needs to be completed on this screen:

Option Description Debit / Credit Link another Transaction Type Other - Tax Other – Rep

The following screen displays:

Highlight the description Invoicing and change the name to Invoicing Invent

The following table contains guidelines with regard to the different areas that needs to be completed on this screen:

Explanation

This is the description that Pastel Evolution will default to each time that the INV transaction is selected.

Debit / Credit

This specifies how the transaction must appear on the Supplier statement e.g. an invoice will be a debit and a receipt will be a credit.

Link another Transaction Type

This option is selected when one transaction results in two General Ledger transactions e.g. when a payment is the supplier and received a discount

will link the discount transaction to the You will need to activate the tax option and (

specify the default tax type for this transaction type. By defaulting the tax type, you reduce the risk of the agent selecting the incorrect tax type and thereby affecting the standard Tax report resulting in incorrect Tax reporting to the Authorities.

This is greyed out because Sales Reps are not applicable to this module.

Invoicing Inventory. The following table contains guidelines with regard to the different areas that needs to be

s the description that Pastel Evolution will default to transaction is selected.

pecifies how the transaction must appear on the statement e.g. an invoice will be a debit and a

his option is selected when one transaction results in two General Ledger transactions e.g. when a payment is made to

received a discount at the same time, you will link the discount transaction to the payment transaction

will need to activate the tax option and (optionally) also specify the default tax type for this transaction type. By defaulting the tax type, you reduce the risk of the agent selecting the incorrect tax type and thereby affecting the

esulting in incorrect Tax reporting to the

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Debit/Credit Ledger Accounts

With transaction types the debit / credit refers to the relevant control account on that module. So with inventory you must specify whether the ‘stock / inventory’ account will be debited or credited as well as specify the correct control account.

Debit Tax Account

The tax account now needs to be selected. Only the tax portion of the transaction will be posted to this account. Usually and by default here, you will select the Vat Control account.

Always Prompt for Debit Ledger Account

Can be activated if you wish to specify the contra GL account each time that the transaction is posted. Pastel Evolution will default to the second GL account specified above but will allow you to change it on processing. When you are

prompted for the GL account, you will also have an option to split the GL side.

Always split Debit Ledger Accounts

The “always split” option will always prompt you for the Split General Ledger accounts when the transaction is posted.

8. Highlight the area that needs editing, change it and click OK to save the changes.

9. To add a new transaction type, click on Add and a blank screen will display. Complete the screen with the information for the transaction type and click OK to save the addition.

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SUMMARY

In this lesson we generated the master files for the Inventory Module. Here are some learning points to reflect on:

• If the correct value of the stock purchased is known at the time of processing the GRV there will be no difference posted in the General Ledger.

• When you did not set all the required defaults the system will prompt you to go back and complete it.

• Creating different types of Master Accounts such as Groups, Inventory items, packs, lot tracking statuses, price lists and so on.

• Remember that a lot of add on modules are linked to the Inventory module, thus,

whenever you have a screen that is greyed out, you know you require a add on module to make use of those functions.

• You do not need to create pack codes, bin locations, groups etc. if your business does not require it.

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FORMATIVE ASSESSMENT

Answer the following questions:

1. What is the difference between physical and service stock items?

2. What are pack orders?

3. Explain the different types of costing methods?

[15 marks]