For the % Shrink to Sales calculation on the Period and Weekly Performance Statistics reports to be available, inventory adjustments must be made through StoreTrak and the Automatic Inventory Adjustment program must be activated.
The Automatic Inventory Adjustment program uses the adjustment amounts recorded by a store to automatically update the store’s inventory to reflect actual counts.
In order to utilize this feature you must complete three implementation steps:
Set System Parameter 3034
Set System Parameter 3015
Create Adjustment Cross-References through the Inventory Cross Reference Maintenance program.
This system parameter specifies whether or not you want to utilize inventory adjustments. Set the parameter as follows:
Parameter Number: 3034
Description: C-store Inv Adj
Value: Y
If you set this parameter to "N", automatic inventory adjustments will be disabled.
This parameter identifies the vendor number that the system should use when creating the adjustment invoices. Set the parameter as follows:
Parameter Number: 3015
Description: Inv. Adj. Vendor No.
Value: Enter the vendor number.
This parameter also identifies the cash vendor for StoreTrak.
The Inventory Cross Reference Maintenance program lets you create cross references to define the category code used for the inventory adjustment. When you create a cross reference, you attach the category code to the adjustment category code. (See the Inventory Cross Reference Maintenance program section for more information.)
Keep the following guidelines in mind when setting up adjustment category codes.
Preferably, you should set up alternate category codes because the alternate category code will not ask for sales information.
In the category set up, set the GL cost account to the account number that you want to charge for the inventory adjustment. This can be either a cost of goods sold account or an expense account.
For adjustment categories, the inventory account and cost accounts must be the same account. This prevents the system from posting an amount to inventory during the month end processing.
When you create cross references, you can reference all C-store category codes to a single adjustment category code or reference each category code to a unique adjustment category code.
Inventory adjustments are entered at the store level. StoreTrak allows you to enter the extended retail value of the adjustment amount. For example, your physical inventory for your grocery category is 156 dollars less than the book value of inventory. This amount is the extended retail cost of the difference. Therefore you enter an inventory adjustment of -156.00.
This adjustment will be transmitted to the home office as part of the upload. The upload file contains the following information for each adjustment:
· TMI department code (cross referenced with the category)
· Adjustment amount
· Vendor number 1000
Adjustments are identified in the upload file by a record type of "4" (position 35 in the upload file) and an invoice number "11000001" (positions 22-29 in the upload file).
When you process retail shift reports, the system will use the inventory adjustment to create an invoice with a net value of 0. The invoice contains two lines.
The first line of the invoice identifies the C-store category. The quantity for this line depends on the type of adjustment. If the adjustment is an increase, the quantity is "1". If the adjustment is a decrease, the quantity is "-1".
The second line of the invoice identifies the adjustment category code. The quantity of this line is the opposite of the quantity for line 1. For example, if the quantity of line 1 is "1", then the quantity of the adjustment category is -1 and vice versa.
Note: The system uses the inventory adjustment cross reference to identify the adjustment category to use for this entry.
Adjustments are entered at retail. Therefore, the system must calculate the cost of the adjustment. To calculate the cost the system subtracts the historic markup margin from 1 and multiplies the difference by the amount of the adjustment. Consider the following example:
Historic Markup Margin=.25
Inventory Adjustment (retail) 150.00
Cost of adjustment = (1-.25) * 150.00
Cost of adjustment = .75 * 150
Cost of adjustment = 112.50