In some instances in Xero you may need to create a manual journal entry to adjust the value of your inventory.
For example
Stock migration PO's: In the instance that your sock migration PO has been pushed into Xero and the value is a different value from the original inventroy balance imported from NetSuite. Then Void the Bill in Xero Note: If there is no difference in value then you simply need to VOID the stock migration Bill.
Inventory adjustment in Lightspeed: as this does not flow into Xero you need to manually create a journal to a record of this financial impact of this adjustment.
Important:
Inventory adjustments should only be used to reduce stock for specified reason that prevents the stock from being sold. Examples: damaged stock, exired (out of date), Stock consumed for internal purposes, theft, donation. To increase inventory for any other reason in Lightspeed you need to complete a purchase order to correctly record the supply price associated with the items you are adding.
How to calculate the value of your item inventory adjustment in Lightspeed
Navigate to Reports > Inventory Reports >select Avg. cost report > filter by report type "SKU name" > filter on the date > filter by the specific item 'sku name' > press search. This gives you the average cost of the item. Then avg. cost of item X quantity decreased by the inventory adjustment
Adjusting value of inventory in Xero
1. Navigate to Accounting > Manual Journal > New Journal
2. Enter the details
- Narration field - enter a description (eg. adjusting inventory to lightspeed balance)
- Date - date of adjustment
- Line 1 - Description should auto populate details entered in narration field, Account = 1400-001 Inventory, with a debit amount if increasing the value of inventory, credit amount if decreasing the value of inventory (default Tax Rate of Bas Excluded is correct)
- Line 2 - Description should auto populate etails entered in narration field , Account = 5000-200 COGS Inventory Adjustments, same amount as on the Inventory line, either debit or credit (opposite to the Inventory line. The default Tax Rate of Bas Excluded is correct.
- Review & Post
Example of Increasing inventory value
Example of reducing inventory value
Migration PO's
1. You only need to make the adjustment if the balance is different from the original inventory balance that was imported from NetSuite.
2. Once you have posted the adjsutment journal VOID the migration Stock Bill in XERO.