Inventory Reporting and Best Practices in MarginEdge

 

When Should I do Inventory?

A full inventory is typically done on the last day of each accounting period and should be taken after the close of business. 

To ensure your inventory matches your sales data it is essential that the dates are set correctly.

When entering new counts into MarginEdge, you will be prompted to enter a date: The date you enter represents the last day of business that will be included in your inventory. Remember: it does not matter what date you enter the data, ALWAYs use the date the inventory was physically counted.

Your ending inventories taken on the last day of the period/month will automatically be used as the starting inventories for the following period/month. Reports in MarginEdge will reflect a one day offset from the date the inventory was taken. 

What to Include in Inventory

It is imperative that what is being counted is consistent each time you take inventory. When comparing any two inventories any Product counted on either inventory but not accounted for in the other, will be reported as having a count of zero on the date when it was not inventoried. Because of this, when comparing inventories, it is essential to compare apples to apples: Compare spot inventories to spot inventories and full inventories to full inventories.

Spot inventories are helpful for tracking key items over the short term; however, the only inventories that can be posted to accounting are the end-of-period inventories.

When an inventory is closed, it becomes eligible to be posted to accounting as an inventory adjustment journal entry. It must be reviewed by someone who holds Manager or Restaurant Admin status for your restaurant in MarginEdge before it can be posted. Important! Once it has been posted, it can no longer be modified in MarginEdge.

Mapping Your Inventory Accounts

Before you can post your inventory to accounting in MarginEdge, there’s one last step. You’ll have to map your inventory accounts, so we know which accounts to post inventory adjustments to in your accounting system.

Go to Accounting > Categories. On this screen, you will see your categories in MarginEdge and how they’ve been mapped to your chart of accounts. To the right of the “Accounting System Account” line you will see a column titled “Inventory accounts’. If you double click this field a drop-down menu will appear, allowing you select the asset account corresponding with the liability account in the “accounting system account” column.

 

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Posting Inventory to Accounting in MarginEdge

When you post inventory to accounting in MarginEdge, we do not post the full value of your inventory; what we post is an inventory adjustment entry, which is a journal entry that records the difference between the value of your last posted inventory and the value of your current inventory.

The inventory adjustment is a balanced journal entry recording increases in value between the last and current inventory as a debit in the assets/inventory account for each category and a credit to the liability/COGS account for each category. Here’s an example:

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Specifically, any increase in the value of your inventory between the previous (starting) inventory and the current (ending) inventory for a particular category will be logged as a debit to that category’s inventory account and credit that category’s COGS account.

The opposite is also true: if there is a decrease in the value of your inventory for a particular category, it will be recorded as a credit to that category’s inventory account and a debit to that category’s COGS account.

In the example above, the difference between the inventories’ value for beverages was $662.29. The journal entry would go to your accounting recording a debit of $662.29 to the beverages inventory account and a credit of $662.29 to the beverages COGS account.

Conversely, the difference in the inventories’ value for misc. food was -$24.27. The inventory adjustment journal entry would go to your accounting recording a credit of $24.27 to the misc. food/food-other inventory account and a debit of $24.27 to the misc. food/food-other COGS account. 

Inventory adjustments will appear in your budgets and can be viewed in detail under the Accounting> Inventory entries.

 

 

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