Account groups

An inventory location account group is a subset, or subcategory, of the chart of accounts that you set up in Global Ledger

The inventory location account group is used to identify accounts. Examples of accounts are an inventory account, a default offset account, and a processing account for inventory items or a group of inventory items.

Link the inventory location account group to each inventory location. Before you can link an account group to an inventory location, the accounts must exist in Global Ledger with an Active status.

This list shows the inventory location account groups:

  • Inventory
  • Receipts
  • Issues
  • Adjustment
  • Cost variance
  • Intransit
  • Physical inventory variance
  • Add-on cost
  • Shrinkage

You must define all of them, even if you do not use them in your daily work.

Inventory location account group Description
Inventory The account where all transactions against an inventory item are posted. Inventory being received is debited and inventory being issued is credited. You can think of this account as the asset or inventory account.

The inventory transaction total amount is posted here as a debit or credit, depending on whether the transaction increases or decreases the inventory's value.

Receipts The account where inventory receipts are offset by default. Inventory being received debits the inventory account and credits the offset inventory receipts account. Purchasing users may think of this account as a work in process account, for goods being received from manufacturing into finished goods. You can override this account when adding transactions. This is not the PO Receipt Offset.
Issues The account where inventory issues are offset by default. Inventory being issued credits the inventory account and debits the offset inventory issues account. You can think of this account as the expense account.

You can set up this account as the cost of goods sold, for issuing to sales, or work in process, for issuing inventory to manufacturing or assembly. You can override this account during transaction entry.

Adjustment The account where adjustments to inventory are offset by default. Inventory being adjusted debits the inventory account and credits the offset inventory adjustment account.

You can think of this account as a variance or cost of goods sold account.

Note: You can override this account during transaction entry.
Cost variance The account used for all costing methods: Standard, Average, Last In, First Out (LIFO), First In, First Out (FIFO) when there is a difference between the order cost and the approved invoice cost, the items for the receiver are no longer available, or all or part of the received quantity for the purchase order has been issued out.
  • Standard cost

    This account is used by Purchasing when an item is approved with an invoiced cost that is different from the standard cost. You cannot override this account during transaction entry.

Actual posting does not occur until you run Global Ledger Interface in Update mode.

Intransit The account used as a temporary holding account when transferring inventory from one location to another with the Intransit Transfer option. The total transfer amount is posted from the From location's inventory account as a credit. It is posted to the To location as a debit to the intransit account. When inventory is received, the amounts are posted to the to location's inventory account as a debit. The offset is posted to the intransit account as a credit. You cannot override this account during transaction entry.
Physical inventory variance The account where the physical inventory variance is offset. The account is used to post the difference between stock on hand and what the person performing the physical count finds. The amounts posted to this account are automatically generated when you freeze physical inventory and update physical inventory counts.
Note: You cannot override this account during transaction entry.
Add-on cost The account where the add-on cost is offset by default. During intransit transfer receiving, items sometimes contain a handling charge or add-on cost that is posted to the received unit cost of the intransit item. In this situation, the inventory account is debited and the add-on cost account is credited.

The received item's value becomes the original transferred cost, plus the add-on cost.

Note: You can override this account during transaction entry. Be aware that this account is not the same as the purchase order add-on cost.
Shrinkage The account where shrinkage from returned catch weight items from Item and Order Billingcustomer orders is offset. During return processing, sometimes the returned catch weight quantity is different from the catch weight quantity that is shipped. The variance between these two quantities is posted to this account.
Note: This account is used only by Item and Order Billing.