Sage 100

We have a customer that is experiencing a number of ""Negative Quantity Adjustments"" in their production warehouse. They have a warehouse setup that they use to collect raw materials then use Bill of Materials to create finished goods. Once created those items are transferred out to warehouses for sale. For some reason, they occasionally get these Negative Quantity Adjustments that throw off the value but not the count in the warehouse. The dollar values are insignificant compared to total inventory (less than 0.10%) but their auditors wonder why reports sometimes show items with a zero count yet a value in the warehouse. They are using average cost for valuation thus they get the occasional IZ or BZ transaction types. I've done some research on this and know how to make adjustments but I would just like to give them some procedures to avoid the problem going forward. The amounts may be insignificant but apparently it is a sticking point with the auditors.

This is a WAG / theory that you may want to test. You mention that once finished goods is created the inventory is transferred out to a warehouse for sale. Is the transfer recorded using an inventory transaction entry? If so, if the cost used in the transfer out is different than the cost used when the item was received into the source warehouse there would be a variance... For example if there was a quantity 1 of item abc at $1.05 in warehouse 000 and quantity 1 of item abc is transferred to warehouse 999 using a cost of $1.00 there would be $.05 value remaining in warehouse 000. Not really a value because there would be no quantity left in warehouse 000 but an orphaned value.... 0 qty, but a $.05 value.

Is it the FG or the raw that are having the issues?