accounting from a to z advanced accounting st louis / april 2007 presenter: kathleen graw
TRANSCRIPT
Why do you care what I have to say?• I’ve worked in a Johnstone operation for 9
years, 11 months, 27 days…• I’ve been a Database user for 9 years, 11
months, 13 days…• I’ve been teaching DST classes for over 4
years…• I’ve been a DST consultant for accounting
related jobs & issues for over 3 years….• I have a Bachelor’s & a Master’s Degree from
Texas Tech & California State Universities…• I think I am smart and I like to hear myself
talk…
Class Objectives:
•To expose you to as many facets of the DST accounting package as possible.
•To demonstrate as many of those features as possible.
•To facilitate an exchange of ideas between users.
Ground Rules:• PLEASE ask questions – I don’t mind being
interrupted.
• NO question is stupid.
• Please keep questions relevant to the group as a whole.
• “Can it be done” versus “Should it be done”?
• MY way isn’t the ONLY way.
Kathleen’s Silver Rule:
The system is really hard to break – not much that you can do that we can’t undo
with a Journal Entry, Programmer’s Magic or
some fast thinking!
Class Structure:
-We have A LOT of ground to cover and FOUR hours just SEEMS like a long
time.
-Tried to give you as many screenshots as I could to cut down on your note taking.
-One break at halfway point (15 minutes)
System Modules
YOUR System
Accounts Payable – Close is dependant on the user. Can post to future periods.
General Ledger –Close is dependant on the user. Multiple GL periods can be open at the same time; however, can only run statements for current period.
Accounts Receivable -Close happens on the last day of the month. Only one AR period can be open at a time.
How it all ties together...
ft
Create a folder on C drive” pick
Enter “ft” at any printer select prompt
Will be called “ft.txt” in C:\\pick
Text file or convert to Excel format
File Transfer
Menu 12.2 Summary
12.2.7 & 12.2.8
Edit, Add or Delete Customer Classes and Types
Assign Tax Rate percentages by jurisdiction
*Recommend Regular Review
12.2.10
Define the Terms Code used in the system
(Affects AR & AP)
12.2.11
Menu 12.2
Terms Code ‘NC’
• M-12.2.11 New terms code of ‘NC’ assign to customers in customer master maintenance. Only allows cash or CC in OE.
• Prevent flagged accounts from paying by check.
• Requirements: Set in customer master. M-12.2.2.2, screen 2, field 23
• Extra line of defense against bad checks.
Taxable & Non Taxable
Customer (Cust.Mast)
Invoice
GOV’T = E
TAXABLE = Y
NON TAX = N
TAXABLE = Y
NO TAX
TAXED
TAXED
TAXED
Part (Prod.Det)
Y
Y
Y
N
NNON TAX = N / GOV’T = E
NO TAX
Aging Options
•M-35.6, Screen 2 field 18 Set the parameter, run through eod, see how it works.
• AR Aging options for system to age based on month-end, due date, or invoice date.
• Find the AR aging method that works best for how you do your business.
Aging Options cont’d:
• Month-end - same aging calculation as before except that the credits will not age against overdue balances.
• Due Date – invoices will age based on the number of days past the due date.
• Invoice Date – Aging will be based on the number of days since the invoice was run.
• Secret Option #4
Bank Reconciliation Report:
• Prompt for bank first and not limit input by company.• Starting balance for the report will be based on the cash
account balance from the last general ledger close. • Stores that do not use the general ledger component of
the system will need to have DST hardcode their January 1 balance each year and the report will populate from there.
Impact Inventory (Detail)? YES NOStock Adjustments XReceive in Inventory XVoucher/Accounts Payable XMonth End Journal Entries X
Detail
General Ledger Implications
Impact Inventory (Summary)? YES NOStock Adjustments XReceive in Inventory XVoucher/Accounts Payable XMonth End Journal Entries X
Summary
General Ledger Implications
Potential Problems:
• 1) Product has been received but not yet vouchered into the Accounts Payable system - Inventory value is updated at receiving time (i.e. as soon as the on-hand increases due to a PO receipt). However, the G/L Inventory is not updated until the vendor invoice has been vouchered and the Inventory G/L account debited for the amount of the merchandise received.
• 2) Inventory adjustments have not been properly entered into the General Ledger via a Journal Entry - The Daily Inventory Transaction Audit Report that runs with each Day End lists all inventory adjustments that have been made for the day. These adjustments directly affect the product on-hand quantity and consequently the inventory value. A journal entry must be made to the Inventory G/L account for all inventory adjustments made throughout the month to properly reflect these changes in the General Ledger inventory value.
Potential Problems (cont’d):
• 3) The difference between the PO receipt cost and the vendor-invoiced cost does not agree - It is necessary to properly record any differences between the product cost at PO receiving time and the actual cost invoiced from the vendor.
• 4) Incorrect use of the Warranty System…vendor credits do not match credits issued through the warranty claim - When closing warranty claims, vouchers should be expensed only to the Warranty A/R account. Also, when issuing vendor credits, the actual credit amount from the vendor should be used.
• 5) Incorrect or non-posting of the Inventory Buyback. The Buybacks (rotational or annual) reduces on-hand (and subsequently inventory value). It is therefore necessary to make a journal entry to reflect this change in the G/L inventory value.
Potential Problems (cont’d):
• 6) Incorrect or non-posting of the Physical Inventory variance - The Physical Inventory process updates on-hand (and subsequently inventory value) at the time the inventory is updated. It is therefore necessary to make a journal entry to reflect this change in the G/L inventory value.
• 7) PO Receipts posting of items not carried as inventory - Products such as C99 and Z95 items should have then Inventory Bypass flag set to ‘Y’es to avoid updating their on-hand (and subsequently inventory) values. Also, these items should not be received, as their on-hand value should always remain at zero.
Potential Problems (cont’d):
• 8) Failure to utilize 13.20.2 Purchase Order Receipts Update to A/P to record vendor invoices and cost changes - 13.20.2 is the only supported process by which stores, whose desire is to balance Inventory Value to General Inventory, can ensure that what is being entered into the inventory system via PO receipts posting matches that which is entered into the A/P system and subsequently the General Ledger. Care must be taken to match all PO receipts to vendor invoices, with reconciliation and cost discrepancies entered through the Purchase Order Receipts Update to A/P process (13.20.2).
Average Cost Impact
122*22.97 + (120*24.417 - 120*22.952) = 2802.34 + (2930.04-2754.24) = 2978.14/122 = 24.410 for average cost
122*24.410 + (120*24.417 - 120*22.952) = 2978.02 + (2930.04-2754.24) = 3153.82/122 = 25.850122*25.85 + (120*23.69 - 120*22.952) = 3153.70 + (2842.80-2754.24) = 3242.26/122 = 26.578
Calculation
Step OneStep One Step TwoStep Two End ResultEnd Result
QOH x Average
Cost
New Average
Cost
Diff. on Inv v. PO
QOH = 300 jugs w/ Average Cost = $60.00ea
Order/Receive 200 more @ $60.00ea
Average Cost still = $60.00ea
Vendor Invoice = 200 @ $70.00ea
Average Cost Example
QOH x Average Cost (400 * $60) $24,000.00
PLUS
Difference on Invoice vs. PO (200*$70) – (200*60) $2000.00
_________________________
QOH (400)
Average Cost Example (sold 100 jugs)
Balance Sheet & Income StatementBalance Sheet & Income Statement
Inventory Valuation Impact
• Overstate Inventory $
• Overstate Profits
• Overpay Commissions
• Understate Inventory $
• Understate Profits
• Underpay Commissions
WidespreadImpact
Average Cost Impact – one SKU
Inventory Value
@ $60 = $24,000
@ $65 = $26,000
Understated by$2,000
Sell 400 @ $90:
@ $60 = $12,000
@ $65 = $10,000
Overstated by$2000
Net Income
Commissions @ 3% of GP:
@ $60 = $360
@ $65 = $300
Overpaid by $60
Commissions
400 jugs
Average Cost Impact
Inventory Value
Devalued your Company by understating
your inventory.
Paying taxes on income that you
didn’t really realize.
Net Income
Paid out more to sales people than
you needed to and inaccurately
reduced your bottom line & affected cash
flow.
Commissions
Bad Avg. Cost
Accurate reflection of Gross Profit by month
Accurate reflection of Gross Profit by part
Accurate reflection of Net Income
No large inventory adjustments at year end
Better handle on inventory value and turns
Average Cost reflects true cost
Average Cost Impact
Use Menu 13.20.2 and 13.20.3
Run Menu 13.20.7 at month end and use for reversing Journal Entry
Inventory XXXXX Inv. Accr XXXXX
Inventory Journal Entry #1
Multi Stores: EOM Account for inventory transfers S01/S02/S03
Inventory Journal Entry #2(Can be automated)
J/E for Store #1
Debit Inventory 02 $20960.79 Credit Inventory 01 $20960.79
Inventory Journal Entry #2Scenario One
Inventory Journal Entry #2Scenario Two
J/E for Store #1
Debit Inventory 02 $20960.79 Credit Intercompany 02 $20960.79Debit Intercompany 01 $20960.79 Credit Inventory 01 $20960.79
Reopening Receivers
If you do it – have to reopen the first & only receiver on the PO
OR
It can throw out your AP/GL Reconciliation
** Doesn’t work with Dropship POs
Reopening Purchase Orders
Physical Inventory
Be sure to make note of the final variance amount that you update since you will need to make the journal entry on the books to balance the detail to the summary.
You debit/credit inventory and an income statement account with this variance amount.
Buyback•Corp is set up as customer 00000. Field 17 (Inv.sfer) in 12.2.2.3 is set to "1." This is so that the invoices will not show on the Invoice and Credit Memo Register and will not figure in the Gross Profit Report.
•Menu 19.7a &7b are updated so that these transactions can be seen in the inventory history.
•Also, A/R is not created and the G/L is not automatically updated.
•Since the General Ledger is not automatically updated, you have to do a journal entry to relieve inventory. We credit inventory and debit “buyback expense”. Then when we get the credit in from Corp, we credit buyback expense. The difference left in the account and gives us an idea of what expense we incurred (write off of dead inventory) as a result of the buyback.
Buyback
•The sales analysis files are not updated so they do not show up in sales. This is important since we don't want to pay 1% to Corp on the buyback sales. **An additional note along those same lines: the report that you get off at the end of the day that shows the invoices to customer 0000 at sell price. So using the report, figure out the average cost per invoice by using the sell and the GP figures. This is the number that you want to relieve inventory by (with journal entry).
•There may be multiple invoices for the buyback. It usually doesn't happen on just one invoice. Usually all the invoices for the buyback are generated the same day; however, if not, just make sure to stay in contact with the warehouse so that you know whenever an invoice is generated.
1 Credit Memo (m1.2) 10 12 12 10
2 Warranty Update (ME) 10 10
3 Create Claim (m15.3) 10 10
CREDIT REC'D
4 Post Credit-Claim (m15.10) 15 15
5 Voucher Credit (m13.20.1) 25 25
RECEVING
4 Replacement (m15.11) 10 10
Inven Sales A/R COGS Warr Pend Warr A/R Warr Discrep A/P
WidgetAvg. cost = $10Sale Price = $12Credit from Vendor = $25
Warranty & the General Ledger
Journal Entries
1. Enter JE 14.1.3 or 14.1.4
2. Print & Review JE 14.1.13 & 14.1.14
3. Update Trial Balance 14.2.4
Reoccurring Journal Entries
Enter JE 14.1.5
Review JE 14.1.15
Update JE 14.1.16
Update Trial Balance 14.2.4