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 asset account corresponding with the liability account in the “accounting system account” column.
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:
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.