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Known issue in AccountRight - resolved in 2022.5

There was an issue in AccountRight that resulted in incorrect item average cost and cost of sales (or cost of goods sold) on an item invoice (need to know how average cost is calculated?). This occurred when you sold an item, used AccountRight's inventory adjustment function to add another item into inventory and then edited the recorded sale.

This issue has been fixed in 2022.5. How do I get the latest AccountRight version?

This issue only happens when:

  1. You're using an AccountRight version earlier than 2022.5

  2. You sold an inventory item

  3. You add more of the item into inventory using an inventory adjustment

  4. You then edited and re-recorded the sale — this results in the average cost of the item being incorrectly recalculated, creating a discrepancy between in cost of sales in the original and edited invoice.

How do I know if I'm affected by this?

You may notice that the average cost of an item (Item Information window > Profile tab > Average Cost field) looks less than it should be. When running reports, you may notice an understated Cost Of Sales amount in the Profit & Loss report and an overstated inventory value in the Balance Sheet.

Example

Suppose you:

  1. Create an inventory item.
  2. Purchase 7 units of the item for $1 each.
  3. Purchase another unit of the item for $1.20. When you do this:
    • Quantity On Hand is now 8
    • Average Cost is $1.025
    • Current Value is $8.20
    • Last Purchase Price is $1.20
  4. You then sell all 8 items. The cost of sales is 8 units x $1.025 (Average cost) = $8.20:

    in the item record:
    • Quantity On Hand is now 0
    • Average Cost is $0
    • Current Value is $0
  5. You then enter an inventory adjustment to add another unit of the item into inventory at $0 cost:
  6. You edit the invoice you created at step 4, for example, by adding a Customer PO No. or by adding a Freight amount. When you recap the invoice you notice that the cost of sales doesn't look right. It's now less than the cost of sales at step 2. That's because when you edit an item invoice in AccountRight, the items are temporarily put back into inventory, changing the average cost of the item and the cost of sales:

How we've fixed this

If you edit a recorded invoice in AccountRight 2022.5 or later, it no longer changes the item's average cost and associated cost of sales. So, you can edit the following fields:

  • Salesperson
  • Journal Memo
  • Customer PO No
  • Ship Via
  • Freight

and you can update the Tax used in the invoice line.

If you change the number of items sold in the invoice (in the Ship column), this will change the item's average cost.

 

 

 
Related topics

Making inventory adjustments

Changing or deleting a transaction

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