Month End Inventory Balance Report (Non- ERRM)

Use the Month-End Inventory Balance Report to review inventory value as of a selected month-end date.

This article explains how RFMS gathers inventory information for the Month-End Inventory Balance Report when your company does not use Enhanced Real-time Revenue Management (ERRM).

For the full month-end close workflow, see RFMS Month-End Close: Steps, Reports, and Reconciliation.

Before you begin

Before running or reviewing this report:

Confirm that your company does not use ERRM.
Run the report for the last day of the month being closed.
Use the same store or Combine selection that you use when comparing the report to the General Ledger or journal balance.
Review costed inventory, uncosted inventory, cut or delivered lines, and percent partial billings when investigating a difference.

How RFMS calculates roll and item inventory value

RFMS reviews roll and item inventory records to determine which records should be included on the report.

A roll or item inventory record is considered for the report when:

The record has been received.
The record has an invoice date that is not blank and the invoice date is on or before the report date.
The date received is on or before the report date.

RFMS also includes records that have a received date after the selected report date if the invoice date is on or before the selected report date.

After RFMS identifies the applicable inventory records, it gathers the value of records that have an amount in the available column.

Inventory value calculation notes

For roll and item inventory, RFMS calculates value using the inventory cost and available amount.

Value = Cost × Available amount

RFMS gets the unit cost from the roll or item header record.

RFMS does not use inventory history to determine the unit cost for this report.

When a received and costed inventory record is later edited and the cost is changed, RFMS creates a new record with the new cost. This helps preserve the original cost record for accounting accuracy.

Sold material added back to inventory value

After RFMS gathers the inventory records that meet the report criteria, it checks Order Entry line records to determine whether inventory was available during the selected month but sold after the report date.

RFMS adds the value back to the report when:

The inventory record was received on or before the selected report date, and
The related line was sold after the selected report date.

RFMS also adds the value back when:

The line has a cut date after the selected report date, or
The line is in reserved status, or
The job cost date is after the selected report date.

This allows the report to reflect inventory that was still available as of the selected month-end date, even if it was sold, cut, delivered, or job costed in a later month.

Example

You print the Month-End Inventory Balance Report for February 2019.

RFMS finds an inventory record that meets the date criteria, but the amount available is zero.

RFMS checks the Order Entry line file and finds that the roll or item was sold in March 2019.

Because the inventory was still available during February, RFMS adds the value back to the February report.

Inventory adjustments

RFMS also reviews inventory history to determine whether any adjustments need to be added back or subtracted from the report value.

RFMS includes an adjustment when:

The adjustment amount used is not zero.
The transaction date is after the selected report date.
The adjustment is not a batch move.

RFMS does not include these adjustment types:

Batch move adjustments
Transfer adjustments
Consolidation adjustments

If an included adjustment is found, RFMS adds or subtracts the adjustment value so the report reflects inventory value as of the selected month-end date.

Summary: Roll and item inventory value

For roll and item inventory, RFMS:

Reviews roll and item inventory records.
Includes records that meet the received date and invoice date criteria.
Uses the unit cost from the roll or item header record.
Adds back the value of material that was available during the selected month but sold, cut, delivered, or job costed after the report date.
Adds or subtracts qualifying inventory adjustments made after the selected report date.
Excludes batch move adjustments, transfer adjustments, and consolidation adjustments.

Need more detail about why a record appears?

For a focused explanation of how RFMS decides whether a specific inventory record or customer order line appears on this report, see How RFMS Selects Inventory for the Month-End Inventory Balance Report.

Uncosted rolls and items

Uncosted rolls and items are inventory records that have been received but have not been costed using the supplier invoice.

This includes records where:

The date received is on or before the selected report date, and
The record has no invoice date, or
The invoice date is in a future month.

When RFMS gathers the roll and item inventory value, uncosted records are included in the inventory value. However, these records have not been posted to the journal because no A/P has been posted. Because of this, RFMS subtracts the value of uncosted rolls and items from the report total.

Note: Uncosted inventory displays at received cost, even if the inventory record has been modified.

Cut and delivered value from lines

For Non-ERRM systems, RFMS reviews cut and delivered Order Entry lines to determine whether value should be added back to the report.

RFMS adds value back when a line is in cut or delivered status but has not been job costed, or when the line was job costed after the selected report date.

RFMS reviews the Order Entry line file and looks for lines where:

The line is in cut or delivered status, and
The cut date is on or before the selected report date.

RFMS also looks for records where:

The job cost date is after the selected report date, and
The cut date is on or before the selected report date.

These values are added back because the material was cut or delivered during the selected period but had not fully moved through job costing as of the report date.

Percent partial billings

For Non-ERRM systems, RFMS also reviews percent partial billings.

When an order is percent partial billed and the billing group is not final billed at the time of job costing, the percent partial billing value of the inventory is credited to the inventory GL account code. The Month-End Inventory Balance Report subtracts that value from the report total.

RFMS includes percent partial billing activity when:

The line is related to percent partial billing.
The delivery date is not blank.
The delivery date is on or before the selected report date.

This adjustment helps the report reflect the correct inventory balance for the selected period.

If the inventory balance does not tie, review percent partial billed orders where the billing group was not final billed at the time of job costing.