Before setting up invoicing constants for transfers, refer to the basic accounting equation that applies to inventory.
Beginning Inventory + Purchases – Sales = Ending Inventory
With the invoicing constants, you'll define your approach to keeping this equation in balance when creating transfers. When a transfer is shipped, the From-store inventory is decreased. You can account for this decrease (and keep the accounting equation in balance) using one of the following methods:
Treat transfers like sales, so the equation is:
Beginning Inventory + Purchases – (Sales + Transfers) = Ending Inventory
or
Treat transfers like "negative purchases", so the equation is
Beginning Inventory + (Purchases – Transfers) – Sales = Ending Inventory
Your approach depends on whether you want transfers reflected in the history of the From-store. Therefore, when setting up the invoicing constants, you only answer Y (yes) to one of the following two fields:
Update Purchase History at From-store
Update Inventory Sales History at From-store
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