Sage 100

v2016 PU1 Std - Hoping someone can explain what is happening. Client is on average costing for IM (what a PITA). For many months, they have gotten intermittent weird costing when doing PO receipt of goods. Since they were on v4.4, I told them we needed to migrate to the latest and greatest, so here we are on v2016. They had another cost issue yesterday so they adjusted out, then in. As shown in the screen shot, 12 are coming out at $200+, 12 are going back in at 70. But then Sage throws in a oddball transaction (IZ - Cost Tier Adjustment) at zero quantity and some value which bumps up the average cost b $11 or so. Can any one explain why this is? Very frustrating trying to explain what is happening. TIA

I can't tell if they had a negative on hand quantity but it looks like maybe they did. if they did I think below is what is happening If an average or standard cost item has a negative on-hand quantity (item over-sold or over-issued), and a purchase order receipt (or Bill of Materials Production entry, Work Order completion, or Inventory TransactionReceipt) is processed for a different value (cost), adjustment transactions are generated. These are automatically generated because the system must make an adjustment to account for the difference between the cost of goods sold on the invoices (or issues) and the cost of the goods received.

I think they should be doing a IM receipt (not adjustment) to bring them in.

To expand on David's well-stated statement: The automatically generated adjustment transaction are the IZ activity you see.

@DavidOverholt is correct. The new xZ Transactions (4.40 and higher) are quite confusing. If an item goes negative, or if the extend value goes negative, you will see these xZ transactions (IZ, PZ, BZ, WZ,etc). After your client adjusted out the quantity, they should run the IM Trial Balance, IM Valuation and IM Stock Status using the specific check marks on the reports as defined in the attached ""how to confirm..."". That will show them if they have zero quantity but extend cost, or any quantity with a negative extend cost. There is a utility that will balance the inventory; but if I recall correctly; it too creates the xZ transactions. Some clients (and consultants) think that when the quantity on hand reaches zero, that should ""zero out"" the extend cost; as well as ""zero out"" the average unit cost. Sage 100 does not calculate in that manner.

Thanks all. Just wish life were simpler. Looks like my recommendation will be to move to another valuation (FIFO probably).

I would echo @MarkKotyla comment on doing a receipt to bring the items back in. Just be aware a receipt is a trigger to hit the defined purchases clearing account and not the adjustment account. A further GL entry would be needed to zero out the account.