Driving Construction Accounting Best Practices for Contractors for 40 years
The inventory management capabilities of PENTA Construction Accounting Software consist of three key components that enable you to track inventory activities for an unlimited number of products across multiple warehouses:
- Product Management
- Inventory Control
- Sales Order Entry
As is the standard in PENTA, the inventory system is fully integrated with all PENTA modules including purchasing, job cost, work order cost, time and material billing, equipment management, general ledger, etc.
Product management is the underlying backbone of the inventory control system. It is at the product level that you define attributes such as the product’s description, status, class, type, unit of measure, taxable status, purchase to stocking ratio, etc. Link standard product codes in vendor / supplier catalogs, cross-referenced to vendor / supplier product codes to facilitate purchasing common products from multiple vendors. Optionally establish standard cost rates by product code, or by product code / warehouse for internal costing purposes. Set up pricing schedules for billing of products on sales orders or T&M jobs / work orders.
Inventory control allows for handling of products within a warehouse and ensures proper accounting of inventory transactions.
Set up any location as a warehouse where material inventories are maintained, whether that is a physical warehouse location, a job site or a service van. Optionally segregate a warehouse into multiple locations to track where specific materials are stored in a warehouse. Establish warehouse / product information such as minimum reorder point, primary location Id and inventory cycle count code.
Replenish inventory balances via the issuance of purchase orders and the recording of purchase order receipts. PENTA automatically revalues inventory balances in accordance with the cost of the received units upon PO receipt.
Move materials from a warehouse via material transfers to jobs, work orders, an equipment item for a repair, to an overhead expense account or to another warehouse. Or record the transfer of materials between any of the above. These transfer entries generate accounting transactions using either a weighted average or standard cost valuation method.
- Physical Inventory:
Physical inventory maintenance allows you to set up counts by warehouse and product according to location. Count frequency and scheduling is user-defined. PENTA automatically adjusts inventory values based on variances reported between physical inventory counts and inventory balances in the system. Audit controls help identify and track the reasons for variances.
PENTA’s sales order entry module allows you to record “over the counter” sales of products to customers. Each sales order may consist of an unlimited number of line items used to identify the products being sold, quantities, warehouse, sales price, discounts, etc. Create “drop ship” purchase orders when inventory balances are not sufficient to complete a sales order.
Products included on sales orders are systematically allocated from the designated warehouse, warehouse operators can update the status of an order upon Pick/Ship. PENTA creates accounting transactions depleting inventory and recording cost of goods sold when a sales order is “shipped”.
Customer pricing tables and discount schedules are used as the basis when issuing system generated invoices for individual sales orders, with the ability to override on a case-by-case basis as needed.