This report identifies SKUs in your system that have significant negative value or have negative quantity on hand month after month. This condition can indicate a purchasing issue or a Keep Stock Info misconfiguration. Significant negative value in ending inventory can obscure dollar value and can cause erroneous shrinkage to be reported. Generally, stores exclude negative value from their reported ending inventory by utilizing an option within their RIV report. However, this option is not consistently set across stores or even within the same store (different options for month-end and year-end). Because of these adverse accounting risks, negative value should be minimized. This report is part of Level 2 - Dollar Accuracy Boundary reports.

• • The Keep Stock Info 'N' field is used for SKUs that the system doesn't order automatically or when QOH info doesn't need to be kept. Examples of this: Dump SKUs (for fasteners or screen repair), General Department ring SKUs (30, 40, 50).

  Steps to process this report:

   

  1. Determine if the SKU is a "dump SKU", or if the SKU was not received correctly. 

   

  Dump SKUs should have their "Keep Stock Info" set to N in the codes tab of Inventory Maintenance. This will blank out the SKU's QOH but keep sales information. This is the correct setting for SKUs like your general fastener sales (or dump) SKU.

  

  • • When negative quantity on hand is corrected via PIP/IMU, it will create a positive shrinkage or swell in the store's Shrinkage system (RPH). If the negative value corrected is significant enough, it will create accounting headaches and, more importantly, it will completely mask any true shrinkage in the store. Therefore, before a store can begin to measure shrinkage in an accurate way, a store must deal with its negative value.
      
      
    • A lesser risk, but not completely uncommon, is when a store includes a negative value for their month-end RIV report but not their year-end report (or vice versa). If negative value is significant, this condition will make large swings in ending inventory value and cause all kinds of accounting headaches and inventory imbalance.
      
      
    • An even lesser risk (but we've been involved with a few of these) is when a forensic inventory audit is performed (for bank or insurance purposes) on a store's inventory file. The entire inventory file is exported to Excel and a value is obtained by summing all SKU's inventory value (QOH x Cost). To the extent negative quantities on hand are present in the store's inventory file, they will reduce the final inventory balance. A banker or insurance adjuster may not know to look and exclude these SKUs!

    For these reasons, Mango will subtract from your store's Level 2 - Dollar Accuracy to the extent a store continues to run with significant negative value.

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• • The Track Inventory toggle is used for SKUs that the system doesn't order automatically or when QOH info doesn't need to be kept. Examples of this: Dump SKUs (for fasteners or screen repair), General Department ring SKUs (30, 40, 50).

  Steps to process this report:

   

  1. Determine if the SKU is a "dump SKU", or if the SKU was not received correctly. 

   

  Dump SKUs should have their "Track Inventory?" toggled Off in the Stock & Sell Tab under the Products menu. This will blank out the SKU's QOH but keep sales information. This is the correct setting for SKUs like your general fastener sales (or dump) SKU.

  

  • • When negative quantity on hand is corrected via Physical Inventory, it will create a positive shrinkage or swell in the store's Shrinkage system. If the negative value corrected is significant enough, it will create accounting headaches and, more importantly, it will completely mask any true shrinkage in the store. Therefore, before a store can begin to measure shrinkage in an accurate way, a store must deal with its negative value.
      
      
    • A lesser risk, but not completely uncommon, is when a store includes a negative value for their month-end RIV report but not their year-end report (or vice versa). If negative value is significant, this condition will make large swings in ending inventory value and cause all kinds of accounting headaches and inventory imbalance.
      
      
    • An even lesser risk (but we've been involved with a few of these) is when a forensic inventory audit is performed (for bank or insurance purposes) on a store's inventory file. The entire inventory file is exported to Excel and a value is obtained by summing all SKU's inventory value (QOH x Cost). To the extent negative quantities on hand are present in the store's inventory file, they will reduce the final inventory balance. A banker or insurance adjuster may not know to look and exclude these SKUs!

    For these reasons, Mango will subtract from your store's Level 2 - Dollar Accuracy to the extent a store continues to run with significant negative value.

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