Perpetual Inventory

Overview

BOS Professional supports the Perpetual and Periodic Accounting model for Inventory.

Inventory pricing must be carefully managed especially with perpetual accounting. If a mistake is made on a Purchase Order or on a Material Movement's transaction (for instance, an incorrect unit is selected), the inventory price is immediately updated and will reflect an incorrect price that affects all the subsequent inventory transactions linked to the Item.

How to Setup the Perpetual Model

• The following Entry Types and Settings are required:

• The Accounting checkbox must be checked for the final status of each of the entry types.

• If an Inventory and Cost of Sales account is set on Materials, it will override the accounts set up in the default Entry Types.

• 1. • Entry Type: Inventory Received (MMR)  

     • VAT: No VAT 

     • Debit Account: Inventory

     • Credit Account: Accrual / Suspense

• 1. • Entry Type: Inventory Issued (MMI)  

     • VAT: No VAT 

     • Debit Account: Cost of Sales

     • Credit Account: Inventory

• 1. • Entry Type: Inventory Returned (MMT) 

     • VAT: No VAT 

     • Debit Account: Inventory 

     • Credit Account: Cost of Sales

The debit side of the Accrual / Suspense account is as follows:

• Entry Type: Supplier Invoice - Inventory items purchased

• VAT: VAT applies if the supplier charges VAT 

• Debit Account: Accrual / Suspense

• Credit Account: Supplier Account