INVENTORY ADJUSTMENTS

[bobs96]

Does anyone do this for anything else but price increases.

Ask your Accounting Department to post journal entries to record the monthly parts adjustment, keeping your Parts Inventory value in sync with your General Ledger inventory value.

The Dealertrack DMS does NOT automatically create journal entries when the parts inventory is manually adjusted. The accounting office will need to create journal entries to increase or decrease the parts inventory value as appropriate. When the parts department manager adds or subtracts inventory quantity, the corresponding value must be adjusted, tracked, and properly logged to have accurate inventory quantities as well as accurate GL value. It is up to the Parts Manager and Controller (or Office Manager) to review the monthly adjustments, note if there are reoccurring issues causing discrepancies, and finally, reconcile the GL account following review. There should not be that many issues if human error is being addressed immediately.

If parts are 'missing' they need to be adjusted out in both in quantity and dollars; and if they are 'found' 2 months later they are adjusted back. If items are not placed on an invoice and are missing on regular basis, requiring adjustments, this needs to be addressed. This process should be an easy continuous monthly cycle to keep GL in sync with manual adjustments and a way to detect any error that occurs in the multitude of transactions in the parts department. A consistent monthly process will assist managers detect undue shrinkage, loss and other processing issues or errors that may be occurring. This regulars process helps deter falsifying inventory values, theft, and other deceptive practices.

Manual adjustments will ONLY affect your Parts Inventory Value. You must make accounting adjustments each month in order to have clean end of year audit.
It is highly recommended that accounting create a journal entry for recording manual adjustments. This will make it easier to track and find differences; this will allow team to address concerns as they occur each month rather than searching through 12 months of data at year end physical audit.

[sjones5677]

We are on Dealertrack as well. Not sure if this is a good way to do this but instead of doing an inventory adjustment on a part we have a count discrepancy on I create a internal counter ticket and bill it to the 688 account at cost. Thus relieving the inventory and creating a entry on the accounting side of the GL. We starting doing monthly reconciliations here after the last physical inventory.

[bobs96]

We do same on Example: 1 rotor charged instead of two or a miss cut key and put it to policy but I'm being asked why i don't let the controller make and adjustment to inventory when i adjust down or up on everything Example: a wiper insert and when i find it "for whatever reason " then let controller know so she can adjust inventory back up. They want every single adjustment no matter dollar amount reported to the controller. I know in a perfect micromanaged world this may be the correct way but also know that "correct me if I'm wrong" most will make the bulk dollar adjustment at inventory time. I'm an old parts manager that has attended many classes on inventory control and have never had this policy taught to this extreme other than the yearly adjustment. Am i too old school?? lol.

[Zep33]

We just use a service invoice for what they screw up for the month and a parts invoice for our missing or broken stuff.

We are part of a huge corporation (Group 1) and that's how they do it so anything else just sounds ridiculous and a complete waste of people's time

[Torgy]

I keep a spread sheet for every month and turn it into our office manager at the end of the month with our parts reconciliation.
She then takes care of the adjustments for the month.