Tuesday, May 18, 2010

Dual Personality: Inventory Transfer Entry

What do you think of when I say "Inventory Transfer Entry"? If you are like most folks, you think of the window that allows you to transfer an item from site to site. But, actually, that window is Item Transfer Entry (Transactions>>Inventory). Inventory Transfer Entry is actually a project accounting window (Transactions>>Project) with a variety of uses.

If you use Project Accounting with Inventory, you are most likely familiar with this window as the next step after receiving an item associated with a project. The purchasing and inventory process for project accounting looks something like this:

  • Record purchase order for inventory item and associate it with a project and cost category, which increases the committed cost on the project budget.
  • Receive the purchase order, which decreases committed cost. Item is received in to inventory (not on to the project).
  • Transfer item from inventory to project using Inventory Transfer Entry window.

This process involves a bit of a learning curve for new users, since the receiving process receives the item in to inventory NOT on to the project. It is the inventory transfer transaction that moves the item from inventory to the project. For non-inventory items, the receiving process DOES post the item directly to the project.

But what if you do not use inventory? Why would you care about the Inventory Transfer Entry window? You can use it to "transfer" non-inventory items to a project. Look at this example:

  • Payables transaction entry used to record an expense for office supplies.
  • After posting the payable, it is discovered that the transaction should have been associated with a project.
  • Use Inventory Transfer Entry to "transfer" the non-inventory item to the project.

This can be very useful when "fixing" issues with costs that were not posted to projects properly.

Inventory Transfer Entry has two different transaction types, Standard and Return. Standard is used for the scenarios above, to transfer an item TO a project. A return can be used to transfer an item FROM a project (thereby reducing the project costs). This can be very useful when an item (inventory or non-inventory) is posted to the wrong project. Consider this:

  • Item 123 is a non-inventory item that has been received to Project ABC.
  • It is then discovered that it should have been received to Project XYZ.
  • Record an Inventory Transfer Return to remove the item from Project ABC.
  • Then record a Inventory Transfer Standard to add the item to Project XYZ.
  • Easy peasy fix!

Well, hope you enjoyed some ramblings on the Inventory Transfer Entry window in Project Accounting :) I just wanted to drive home the point that the window can serve a variety of purposes, not just the typical inventory item transfer scenario.

4 comments:

Frank said...

We buy a lot of items that we do not want to charge to inventory but to a project directly, but we want to keep a "database" of these non-inventory items. The only way I thought about doing this was to set up these items in Inventory and then use POP to purchase these said items directly to a project. I've gotten as far as creating the item with an Inventory and inventory off-set account. I use a Project Number and Cost Category (marked as Inventory) but when I look at the distribution the PURCHASE account is blank.

Do you know of a way I can charge these items directly to the project without receiving them into inventory or a way to have a non-inventory database of frequently purchased items in GP?

Thanks
Frank

Christina Phillips said...

Hey Frank!

Set up your items with a type of "Service", which will allow them to be tracked in the item master and received and then transferred on to a project. But they will not track quantities or values in inventory.

Take care,
Christina

Chad Merritt said...

We here at ITC Global currently purchase to both Projects, and to Inventory. Its become a concern, because there is no way to track/trace items purchased to the project. So we switched to purchasing everything to inventory, so that it can then be depleted to the Project/Job.

Does this sound logical? Im a fairly new user to GP.

thanks
Chad Merritt

Christina Phillips said...

Hi Chad-

I am not sure if it makes sense or not. You can record a PO with specific projects on it. Then the amounts associated show up as committed costs on the project. Once that is done, when you receive the items, then you can do the inventory transfer to actually consume them. Feel free to email me at cphillips@bkd.com if needed.

Take care,
Christina