Choosing the Correct Inventory Date
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.
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.
Consistency is Critical
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.
Posting Inventory = Posting Adjustments
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.
Inventory Adjustments posted to accounting will be sent as journal entries that affect the expense and inventory asset categories mapped as shown on the Accounting > Categories page.
See an example inventory adjustment entry:
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 a credit that category’s COGS (liability) 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 (asset) account and a debit to that category’s COGS (liability) 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.
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 to select the inventory account corresponding with the account in the “accounting system account” column.
Ready to Post!
To post an Inventory Adjustment to accounting, go Inventory > Inventory Summary and select the Starting Inventory and Ending Inventory you would like to post an adjustment for.
- Because we are not posting inventories but inventory adjustments to your accounting system, you will need to have at least 2 inventories in MarginEdge to post an adjustment to your accounting system
- Please note that only adjustments between end-of-period inventories can be posted to accounting.
Because we use the ending inventory of the previous period as the starting inventory value of the current period the dates of the starting inventory as seen on this screen will be one day after the date that/those inventory dates were counted. (so in the example pictured below, this restaurant took their inventory on the last day of their previous period [8/9] but it appears with the next day[8/10] as it is acting for these purposes as the starting inventory value of their next period).
Once you have selected a starting inventory and ending inventory, you can post the adjustment by pressing the "Post to Accounting" button.
Once "posted", Inventory Adjustments in MarginEdge are exported to the accounting system like invoices or sales entries, this can be set to export manually, or automatically by going to the Setup > Integrations page and clicking on your accounting system highlighted in green. Once here, you can set choose your desired settings.