Inventory

Question

I currently have Sage 50 in my business. Sometimes a sale invoice is produced before the new item is received into inventory mainly because my customers want to make a payment on the item. When I do the sales invoice it puts my inventory into a negative and it produces the COGS to be zero. Then when i put in the purchase invoice the item in the sales invoices COGS still stays at zero. So therefore when looking at the sales invoice I sold the item for a profit but it didn&rsquo;t.cost anything which was wrong . My profit should be the difference from the sale minus the cost. Do I need to go back adjust these or do they adjust themselves in the income statement or am I reporting the wrong figures. Please help

Erzsi_I · Answer

Hi Mary Dimmer , Thanks for reaching out. I see that you didn't receive an answer to your other post with this question, so I'll answer it here and remove the duplicate. It looks like you are encountering a common issue where sales invoices are created before the inventory items are actually received, leading to an incorrect Cost of Goods Sold (COGS) calculation. 
 Here are the steps you can take to adjust the COGS on an existing sales invoice and ensure accurate reporting:

Adjust the Sales Invoice : If you have already processed a sales invoice, you'll need to adjust it to reflect the correct COGS. According to KB 13592, you can adjust a sales invoice and then use CTRL + J to view the COGS journal entry before reprocessing it.

Verify Inventory Transactions : To understand why COGS was not affected, run an Inventory Transaction report: 
 
 Go to Reports, then Inventory & Services, and select Transaction. 
 Set the filter to Inventory by Item and select the item in question. 
 Ensure all boxes, including Balance forward, are checked and set the date range to cover the date of the invoice.

Void and Replace the Invoice : If new invoices are using the COGS account correctly, but the previous one did not: 
 
 Void the incorrect invoice. 
 Create a new invoice to replace it, ensuring that it records a COGS entry.

Inventory Timing : If you sold items before you purchased them: 
 
 Verify the item number on the purchase invoice and ensure it matches the item number used on the sales invoice.

Remember, Sage 50 doesn't automatically adjust COGS for processed invoices when inventory values change. You must manually adjust the invoice to correct the COGS. 
 If the COGS is still incorrect, even after the above adjustments, consider if there have been any backdated purchase invoices or adjustments entered after the sales invoice was posted. These can affect the inventory balance, causing discrepancies. 
 Should you need further assistance or clarification, please feel free to reach out to Sage 50 Canada support for additional help. 
 Please let us know if there's anything else we can do for you. Warm Regards, Erzsi

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