SM-J-C Reconcile Inventory On-Hand

Purpose of Program

Use this program to reconcile all your inventory-related data files so that all balances among the files are in agreement with one another.  The program also performs a series of housekeeping functions on these files, including deleting blank or duplicate records and correcting mis-matching or missing records.

You can run the reconciliation report in Report only mode and then for real.  In Report only mode it will show you the changes that will be made; when you run the report for real it actually applies the changes to the files.

SM-J-C is useful as a diagnostic tool.  For example, if you suspect a particular program is not updating any aspect of inventory correctly, you can run SM-J-C just before and right after running the suspect program.  If the suspect program created any errors, they would immediately show up on the reconciliation report.

When you reconcile inventory you have a choice of reconciling at the Master Level or at the Transaction Level.

Master Level Reconciliation

The Master Level reconciliation insures that the main inventory master files are properly synchronized with one another and that all their respective records are cleaned up for duplicates, mis-matches, etc.  Generally you would reconcile at the master level first, then at the transaction level (see below) second.

The inventory master files are the inventory master (BKICMSTR.B*), the manufacturing inventory master (MTICMSTR.B*), the location master (BKICLOCM.B*), the location detail file (BKICLOC.B*), the item class master (CLASMSTR.B*), and the class/location file (CLASS.B*).  The order and allocation status is also reconciled with the the sales order line item file (BKARINVL.B*), the purchase order line item file (BKAPPOL.B*), and the work order bill of material file (WOBOM.B*).

If you want to know precisely what is done by the master reconciliation, SM-J-C provides a printout with full details of all the reconciliation steps.

Transaction Level Reconciliation

The Transaction Level reconciliation is primarily for the purpose of reconciling the on-hand inventory and stock status fields held in the inventory master files with the detail found in the inventory transaction file and the open sales order, purchase order, and work order files.

You can choose to force the inventory On-Hand to agree with the transaction detail, or you can force the transaction detail to agree with the current On-Hand quantity.  The stock status fields (on sales order, on backorder, on purchase order, in QC inspection, on work order, allocated, in WIP) are recalculated from scratch from the various detail files.

The master files that are reconciled with the detail are the inventory masters (BKICMSTR.B* and MTICMSTR.B*), and the location detail (BKICLOC.B*).  The detail files that are reconciled with these master files are the inventory transactions file (INVTXN.B*). , the sales order line item file (BKARINVL.B*), the purchase order line item file (BKAPPOL.B*), and the work order bill of material file (WOBOM.B*).

General Program Operation

If you are running SM-J-C and plan to make actual changes to the files, it should not be run while others are using the system; otherwise, they could post to inventory-related files while changes to them are taking place.  If all you are doing is running SM-J-C in report mode only, it is safe to use the program while others are in the system.

When you first start the program you are presented with a documentation file in a display window that explains how SM-J-C is used and specifically what it does to the various files.  You can either read this on the screen or press F10 (or click on the Print button) to print it out.  You can close this window by pressing <Esc> (or by clicking on the Exit button).

You can then choose to reconcile at the master level or the transaction level or both by entering a Y in either the Perform Master Level reconciliation? field or in the Perform Transaction Level reconciliation? field.

If you want to first get a report before any actual changes are made to any files, enter a Y in the Use report only mode (no data changes made)? field.  You will still get a report if you enter an N; however, the changes will be made to the files and the report serves to tell you what was done after-the-fact.

You can then indicate whether to include the Stock Status corrections on the report.  By excluding them, you can get a more manageable report that only contains significant items such as duplicate or missing records.

If you had chosen to reconcile at the transaction level, you can specify one of two methods in the Choose the Transaction Level reconciliation method field.

Enter an A if you want to force the inventory transaction file to agree with the current inventory On-Hand quantity.  This method creates an adjusting entry in the inventory transaction file that brings it into balance with the current On-Hand.  You might use this method immediately after a physical inventory, for example, when you know the On-Hand is the most accurate figure.

Enter a B if you want to force the inventory On-Hand quantity to agree with the net units calculated from the actual inventory transactions.  You might use this method when you are confident that your inventory transactions are accurate and that somehow the On-Hand quantities got off.

Finally, you can limit the reconciliation to a from/thru range of Item numbers and a from/thru range of Item classes.

If you had answered N to Use report only mode (no data changes made)? previously, you are then given a warning to get all users out of the system before processing begins.  The program will not run until you do so.  Press any key and processing will begin.  You will see the various records listed on the screen as they are searched and/or changed.  When processing is completed, you will get a standard report prompt asking if you want to view the report on the screen, send it to the printer, or send it to a disk file.

Suggested Sequence of Events

The following is a sound way of running SM-J-C that minimizes "surprises" and gets the most out of the program.

One, run a Master Level reconciliation in report-only mode.  This will give you a feel for the extent of necessary changes and you can then decide whether or not to proceed with them.

Two, after reviewing the report go ahead and run the Master Level reconciliation "for real."  You'll get a second report that indicates the actual changes that were made.

Three, now run a Transaction Level reconciliation, but in report-only mode so that you can preview the changes it will be making.

Four, after review the report, go ahead and run the Transaction Level reconciliation, this time "for real."

You can run the Master Level and Transaction Level reconciliations in report-only mode at the same time; however, the transaction report will be more meaningful if you first run the Master Level reconciliation "for real", which may correct some things that can shorten what the Transaction Level reconciliation might also try to correct.  If you don't care to preview your changes, you can also run both reconciliations "for real" at the same time.  In this case the program runs the Master Level reconciliation first and then runs the Transaction Level reconciliation.

If you want to reduce the size of the report, you can run IN-L-S Rebuild Stock Status first so that teh stock status values are already accurate and SM-J-C does not need to address them.

Adjusting the General Ledger for Inventory Changes

If changes are made to any inventory On-Hand quantities, this will affect the book value of the items' inventory asset accounts on your balance sheet.  Any changes made by the reconciliation that affect the General Ledger are marked with dollar signs ($) on the reconciliation report to bring it to your attention.

If you see any such changes listed after the reconciliation has been run "for real", you should run the IN-F  Print Inventory Value report and compare your General Ledger inventory asset accounts with the revised inventory values.  You will then need to make general journal adjustments through GL-B  Enter/Print General Journal Trxns to bring the inventory accounts into compliance with the inventory value figures.  A debit or credit is made to your inventory account(s), and the offsetting entry is either made to your Cost of Goods Sold account or to a variance account for inventory adjustments.