This guide explains inventory lots, inventory usage, and inventory transactions. It is intended for advanced users.
These three records and modules interact to help you manage your inventory and calculate COGS:
- Inventory Lots — Represent the source of goods (i.e. items received or produced)
- Inventory Usage — Represent the use of goods (i.e. items shipped to customers or used in production)
- Inventory Transactions — Track the changes to the quantity balances of inventoried line items
Each of these modules is explained below.
Note: Inventory lots are related to, but distinct from, manufacturer lot tracking.
Overview of Inventory Lots
aACE uses inventory lot records to track inventoried and inventoried assembly line item codes. Navigate from Main Menu > Inventory > Inventory Lots.
Click on a specific inventory lot to display additional details:
Creating an inventory lot record can be triggered from various modules:
- Purchase Orders module — Opening a PO
Note: The lot's quantity is not populated until the shipment is received. The lot's value is initially an estimate, which is finalized when the purchase is opened. - Orders module — Through the Management tab > Procurement or Fulfillment tabs of an order by creating a PO or Job
- Jobs module
- Inventory Adjustments module — Posting an Assembly, Division, or Beginning Balance adjustment
Overview of Inventory Usage
Navigate from Main Menu > Inventory > Inventory Usage.
Click on a specific usage record to review details:
Inventory usage records are created from events in various modules, such as Jobs, Shipping Log, and Inventory Adjustments.
Inventory usage records are helpful for identifying and resolving unallocated inventory usage.
Overview of Inventory Transactions
Navigate from Main Menu > Inventory > Inventory Transactions.
Inventory transaction records are calculations that track the changes or 'movement' in inventory balances. This module is akin to a general ledger for inventory balances.
The Inventory Transactions module can help you track the various records that change inventory quantities:
- Purchase Orders — Opening a PO increases the On Order count for each line item code (LIC) on the PO. Receiving the incoming shipment reverses this count.
- Orders — Opening an order posts a negative on the Demand count for each LIC on the order. Shipping the outgoing shipment reverses this count.
- Shipments — Receiving an incoming shipment increases the On Hand count for each LIC. Shipping the outgoing shipment reverses this count.
Note: As mentioned above, incoming shipments also reverse the On Order count for PO's while outgoing shipments reverse the Demand count for orders. - Inventory adjustments — Positive adjustments increase the On Hand count for each LIC. Negative adjustments decrease this count.
- Jobs — May increase or decrease the count in On Order, Demand, or On Hand, depending on the specific tasks of the job.
Note: When you receive items that are tracked by manufacturer lot, each lot is recorded as a separate transaction. Also, when handling returns for lot-tracked inventory (and serialized inventory), the needed inventory adjustments require additional details.
Understanding Inventory Quantity Values
In both the Inventory Lots and Inventory Usage modules, quantity values are naturally positive. In other words, “We received three units” would equate to an inventory lot record with a quantity of three. Likewise, “We used three units” would equate to an inventory usage record with a quantity of three.
In contrast, the Inventory Transactions module presents a positive quantity as an increase in the balance and a negative quantity as a decrease in the balance. The On Hand values from inventory transaction records are added together to determine the current total balance. With that in mind, an inventory usage record with a quantity of three will have a corresponding inventory transaction with an On Hand quantity of negative three (i.e. the positive usage depletes three units of inventory).
The relationship between these three modules can be summarized with this equation:
