Reconcile Inventory and General Ledger
1. Outstanding transactions
Prior to the end of each period it is important to ensure that the following have been addressed:
- All issues made during the period must be entered onto the system
- All deliveries of stock made during the period must have been receipted on the system
- All adjustments have been entered
2. Stock write-off
As per the Stock Provision, Write Off and Disposals Policy, it is important to consider the need for:
- A provision should be made at the end of each Financial Year to provide for excessive loss in the value of stock held, likely to be incurred in the coming year, through obsolescence, damage, expired shelf life, or lack of historic and future expected movement.
- The Process Owner should be forwarded details of provisions, to record for future reference and for auditing purposes.
Stock write off
- As and when stock items need to be written off for any of the reasons above, it is essential that the appropriate authorisation is obtained according to the Financial Regulations. See Write-off Goods (88kb).
- Additionally, it is recommended that at least twice a year (ideally quarterly) a full review of stock items is made to identify slow-moving or obsolete items. Running the OX Item Demand History and Value Report - CSV (11kb) will help with this.
- As above, the Process Owner should be sent details of stock write offs.
DisposalsDisposal of items is subject to department procedures and the specific items involved. In particular, the disposal of hazardous substances or chemicals must comply with the Health and Safety Executive guidelines. See the Stock Provision, Write Off and Disposals Policy for further guidance.
3. Managing pending transactions
It is important to check the system for any pending transactions. Refer to the relevant section in Reconcile Inventory and GL (194kb) for guidance. If necessary, review previous transactions.
You may find it useful to refer also to Income and Expenditure (I & E) reports to ensure all inventory transactions are coded correctly and price variance, stock write off and stock value natural accounts are all at manageable levels. See the Run Period End Reports for Inventory (191kb) for guidance.
Where appropriate, the average cost of items may be reviewed. See Review the Average Cost for Inventory Items (104kb)
4. Data transfer
There are three elements to this procedure which should only be actioned by Departmental Administrators, Senior Finance Officers/Accountants, or the Process Owner.
- Run the transfer transactions to GL
- Run the Project Cost process up to the period end date
- View the GL transfer history to ensure that all transactions have successfully transferred to the GL. Ensure that no transfers have a status of error.
Only when all of the above processes have been completed can the Inventory Process Owner reconcile the accounts and complete the close of period routine.