We recommend starting the process at the end of the day when you leave your desk. Note: Including a Limit-To Date lengthens the processing time significantly and can tie up your machine for systems with larger data sets. It considers all inventory lot and inventory usage records dated on or before that date. Limit-To Date used - The process uses the specified date for the General Journal entry. ![]() The Limit-To Date allows you to backdate a COGS reconciliation: If applicable, enter the Limit-To Date (see below), then click Yes.At the list view, click Actions > Generate COGS Reconciliation.Navigate from Main Menu > Accounting > General Journal.If you run the COGS Reconciliation process without running the Accrued COGS Reconciliation process, your financials may become skewed by the sales and costs from unallocated inventory usage being accounted for in different periods.Ĭonversely, if you run the Accrued COGS Reconciliation process without running the COGS Reconciliation process first, it may create accrued COGS entries for inventory usage records that could be allocated during the COGS reconciliation process. If you execute this process manually, remember to also run the Generate Accrued COGS Reconciliation (available in the same GJ Actions list). We recommend running them after work hours in order to avoid interfering with users' daily workflows. If you customize the timing of these schedules, be aware that they can take a long time to complete. These automated entries always use the current date for the resulting General Journal entries. By default, one schedule runs every Sunday evening, while the other runs on the last night of every month. There are two schedules titled Generate COGS Reconciliation. System administrators can set up your system to run the COGS process automatically (Main Menu > System Admin > System Preferences > Automation Schedules). The COGS reconciliation process typically runs as part of the Generate COGS Reconciliation automation schedule, but you can also run it manually. The COGS reconciliation process also makes entries in the General Journal, removing 10 textbooks from inventory and expensing them to the GL account Cost of Sales. Instead, the relevant records will be displayed in the inventory lot record that aACE pulled from. If this is the case, aACE will not display the inventory usage and out-going shipment in the Inventory COGS section. This means that aACE may use inventory from a previous inventory lot. The Inventory COGS section now links to the relevant inventory usage and out-going shipment. Current inventory has been depleted and the units are now noted as used. The COGS process also updates the inventory lot record. The Inventory COGS section now displays the relevant inventory lot and purchase order. ![]() When the COGS process runs, it updates the inventory usage record so the 10 used units now show as allocated. The COGS reconciliation process allocates inventory usage records to inventory lot records in order to calculate the actual cost. The Inventory COGS section at the bottom displays no entries. This creates the following inventory usage record, showing that 10 units have been used, but none of them have been allocated. The Inventory COGS section at the bottom displays no entries.ĪACE generates inventory usage records whenever inventoried items are part of out-going shipments.Ĭontinuing our example, suppose a sales order including the 10 received textbooks is shipped. Each textbook is estimated to be valued at $135.00. Using a sample inventory product, we'll trace the three aspects of the COGS process:ĪACE generates inventory lot records whenever inventoried LICs are procured or produced.įor this example, the Inventory Lots module shows that we have received a partial shipment of ten textbooks into current inventory. The COGS reconciliation process requires that your aACE system is set up for inventory tracking. This enables aACE to determine the true cost of goods and to create the necessary COGS GL entries. The COGS process allocates inventory usage records to inventory lot records using the applicable actual cost method (e.g. Note: This explanation of the cost of goods sold (COGS) process assumes that you understand the relationships between aACE inventory lot, usage, and transaction records. This guide explains what the aACE COGS process does and how you can use it.
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