This is the third in a series of pages that examine the financial processes in the applications of the Inventory module. They demonstrate, using examples and screenshots, how the debit and credit GL account fields are derived. A summary is provided at the end of each page.

This series will include:

  1. Storerooms/Locations control accounts, GL defaulting in Item Master
  2. GL defaulting in Inventory – Adjustments
  3. GL defaulting in Inventory – Issues and Returns
  4. GL defaulting in Inventory – Transfers
  5. GL defaulting in Inventory – Kitting
  6. GL defaulting in Issues and Transfers
  7. GL defaulting in Inventory Usage and Shipment Receiving
  8. GL defaulting in Stocked Tools

This page will examine:

  • Issue Current Item
  • Issue Current Item (Return)
  • FIFO/LIFO Processing
  • Summary – Inventory Issue/Return Transactions (MATUSETRANS)

Issue Current Item

When we use the Issue Current Item action with a transaction type of ISSUE the GL Debit Account will initially be filled by the Inventory Resource Code for the item’s Commodity Group, which in this case is ????-???-200 for Commodity Group MECH. Inventory Resource Codes will be found in the action Resource Codes in the Chart of Accounts application.

You will be issuing to a work order, location or asset and the GL Debit Account will be merged from the work order’s GL Account which is in itself merged from the GL Account on a PM, Asset, or Location. In this case I entered work order 1338, whose primary location is OFF301 which has a single asset, A7800, the work order’s GL Account is 6100-200-300. The 3rd GL segment from the work order’s GLACCOUNT has been replaced as part of the merge to form 6100-200-200.

The Issue Current Item action creates a transaction with issue type of ISSUE and is written to the object/table MATUSETRANS.

  • GL Debit Account (MATUSETRANS.GLDEBITACCT) is the work order, location or asset’s GLACCOUNT merged with the inventory resource code for the commodity group. 
  • GL Credit Account (MATUSETRANS.GLCREDITACCT) is the item’s Inventory Control Account (INVCOST.CONTROLACCOUNT) which is derived from the Control Account for the Storeroom (LOCATIONS.CONTROLACC). 

If the item is capitalized, the item’s Capital GL account is used for the GL Credit Account on the MATUSETRANS record. 

For a new item 1044 – Electric Cordless Drill, I originally made it a capitalized item, then changed it to non-capitalized, and changed it again to capitalized so that I could add a Capital GL Account of 6200-300-400.

When I issue the item the GL Credit Account is the Capital GL Account. The Line Cost is always zero for capitalized items. The Capital GL Account is held in INVCOST.CONTROLACCOUNT, and so if you need to have control over this, then display the Inventory Control Account in the Inventory Cost table window of the Inventory application. 

Issue Current Item (Return)

When we use the Issue Current Item action with a Transaction Type of RETURN the GL Debit Account will initially be filled by the Inventory Resource Code for the item’s Commodity Group, which in this case is ????-???-200 for Commodity Group MECH. Inventory Resource Codes will be found in the action Resource Codes in the Chart of Accounts application.

You should be referencing a work order, location or asset. Assuming you are returning from a work order the resource code’s GL account will be merged from the work order’s GL Account which is in itself merged from the GL Account on a PM, Asset, or Location. In this case I entered work order 1338, whose primary location is OFF301 which has a single asset, A7800, the work order’s GL Account is 6100-200-300. The 3rd GL segment from the work order’s GLACCOUNT has been replaced as part of the merge to form 6100-200-200.

The Issue Current Item action (when returning) creates a transaction with issue type of RETURN and is written to the object/table MATUSETRANS.

  • GL Debit Account (MATUSETRANS.GLDEBITACCT) is the work order, location or asset’s GLACCOUNT merged with the inventory resource code for the commodity group. 
  • GL Credit Account (MATUSETRANS.GLCREDITACCT) is the item’s Inventory Control Account (INVCOST.CONTROLACCOUNT) which is derived from the Control Account for the Storeroom (LOCATIONS.CONTROLACC). 

If the item is capitalized, the item’s Capital GL account is used for the GL Credit Account on the MATUSETRANS record, it is stored in INVCOST.CONTROLACCOUNT.

The debit and credit GL accounts for an ISSUE and a RETURN are identical. The difference is that:

  • an ISSUE has a negative Quantity and a positive Line Cost (reduce storeroom quantity, charge WO)
  • a RETURN has a positive Quantity and a negative Line Cost (increase storeroom quantity, refund WO)

FIFO/LIFO Processing

The inventory issue transactions are a little different when dealing with an item that has an Issue Cost Type of FIFO (First In First Out) or LIFO (Last In First Out). The GL accounts used come from the INVENTORY object/table rather than INVCOST. There is no INVCOST record when the Issue Cost Type is LIFO or FIFO.

I’ve created a new rotating item 1064 – Apple MacBook Pro 32GB RAM which I have added to the CENTRAL storeroom with an Issue Cost Type of FIFO (First In First Out). I have raised and received three POs the first with quantity 2 at $2,450 each, the next with quantity 1 at $2,350 and finally a quantity 1 at $2,550, giving a current balance of 4.00. The four assets were 2171, 2172, 2173, 2174. Asset 2174 has the purchase price of $2,550.

I have now performed three issues of quantity one each, but not selecting the rotating items in the order they were received. The order in which the rotating assets were issued was in fact 2174, 2171, then 2172, and asset 2173 is still in the CENTRAL storeroom. The first issue at 18:33 was for rotating asset 2174 which has the highest purchase price of $2,550 but the actual cost is according to the FIFO principle, the first in was assets 2171 and 2172 at a purchase price of $2,450, hence this first issue is at $2,450. The second issue at 18:36 was rotating asset 2171, with an actual cost also of $2,450, which was the cost of the second asset to be added to the CENTRAL storeroom. The third asset to be added to the storeroom was at a purchase price of $2,350, hence this is the actual cost of the third asset to be issued.

If you are wondering why the second issue transaction at 18:37 has 2174 in the asset column, it is because OFFICE had no assets when the first issue of asset 2174 was made. When the second issue occurred OFFICE already had asset 2174, and Maximo defaults in the asset when the location is selected and there is only one asset at the location, hence why 2174 is referenced on the second issue. By the time we come to the third issue to the OFFICE location at 18:39 there were now two assets in OFFICE, 2174, and 2171, hence no asset is referenced. The Asset column does not show the rotating asset issued; if you want to see this then you need to display the rotating asset (MATUSETRANS.ROTASSETNUM).

From a GL defaulting point of view when an item exists with a cost type of FIFO or LIFO there is no INVCOST record, but there are records in INVLIFOFIFOCOST which is the base object behind the table window called Inventory LIFO/FIFO Costs. The finance guide references that certain GL transaction accounts default from GL attributes in table INVLIFOFIFOCOST but there are no GL account fields in this table. For LIFO and FIFO items the GL control account defaults from the INVENTORY table instead, the CONTROLACC attribute. 

I’ll now demonstrate that when issuing the remaining rotating asset (2173) that the GL Credit Account is being derived from the inventory control account (INVENTORY.CONTROLACC). You can see that the unit cost is $2,550 which is the last price in which we received an asset for item 1064 with a cost type of FIFO. The GL Credit Account 6600-800-800 is the same in both the control accounts in Inventory and the Storerooms application. I will use the Cancel button and change the Inventory Control Account for item 1064.

I’ve added the three Inventory GL Accounts:

  • GL Control Account (INVENTORY.CONTROLACC)
  • Shrinkage GL Account (INVENTORY.SHRINKAGEACC)
  • Cost Adjustment GL Account (INVENTORY.INVCOSTADJACC)

All three fields are enterable. I’ve added the GLNAVIGATOR lookup and changed the GL Control Account to 6600-800-200. 

You can see that when I go to issue the same item the GL Credit Account is 6600-800-200 which has been defaulted from the INVENTORY table and the CONTROLACC attribute. 

There is no third element to the GL Debit Account because there is no Commodity Group for item 1064, and location OFFICE has a partial GL account of 6220-300-???.

Summary – Inventory Issue/Return Transactions (MATUSETRANS)

The GL account codes on actual materials (MATUSETRANS) entered via the Inventory application is not unsurprisingly identical to that entered directly through Work Order Tracking or Quick Reporting, they are defaulted on both the debit (blue) and credit side (mauve). The diagram and summary text are identical to that which you will find in the page Financial Processes on Work Orders (2 of 3).

On the debit side (GLDEBITACCT):

  • The commodity group of the item being issued or returned has a partial GL account (GLDEFAULT) defined in Inventory Resource Codes in Chart of Accounts application. This is merged with that from the work order’s GLACCOUNT, with elements from Inventory Resource Code taking priority.
  • The Work Order’s GLACCOUNT is itself merged from the GLACCOUNT fields on PM, Asset, Location in that priority order.

On the credit side (GLCREDITACCT):

  • If the item has an Average or Standard Issue Cost Type, then the credit account is derived from the Inventory Cost (INVCOST) table. If the item has a FIFO or LIFO Issue Cost Type, then the credit account is derived from the Inventory (INVENTORY) table.
  • These two control accounts are derived from the storerooms GL Control Account (LOCATIONS.CONTROLACC) but they can be modified in the Inventory application.
  • In the Item Master application, the item can be set to be capitalized or not. Capitalized items have zero cost when issued. The Capital GL Account is manually entered when you use the Change Capitalized Status action, there is no default for it. The GL Account you enter is recorded in the Inventory Cost Control Account (INVCOST.CONTROLACCOUNT)

On the Inventory application the control and other GL accounts are normally hidden, but if displayed they can be modified.

The debit and credit GL accounts for an ISSUE and a RETURN are identical. The difference is that:

  • an ISSUE has a negative Quantity and a positive Line Cost (reduce storeroom quantity, charge WO)
  • a RETURN has a positive Quantity and a negative Line Cost (increase storeroom quantity, refund WO)