With the Pantheon program package, you can take inventory at the end of the year or for shorter accounting periods.

The process for taking inventory will be described below.

1. Enter information

Differences between the actual, physical inventory as determined by an inventory count and warehouse records can be found using the Inventory Count module. There are two ways to enter information in the module:

a.) An inventory count sheet can be entered directly in the program (using portable scanners, by direct entry or by scanning).

b.) You can create an inventory  count sheet by taking an inventory count on paper and entering it in the program.

2. Compare Inventories

Once an inventory count has been taken and entered in the program, it must be compared with the program's records. You will be comparing the actual, physical inventory with the inventory recorded on warehouse cards.

This comparison will reveal any variances between the actual balance and the posted balance. Later, these will be appropriately posted.

3. Reconciling Inventory

The next step is reconciling the inventory. Variances revealed through the inventory count are carefully examined on the level of the entire company. Why?

3.1. Excess at One Warehouse, Shortage at Another

During the year you might have made mistakes when using the program. If you're dealing with more than one warehouse, it often happens that you create a receipt or transfer for the wrong warehouse. In this case, the inventory count will reveal an excess at one warehouse and a shortage at another. In order to fix this, you need to create a transfer from the warehouse where the excess was discovered to the warehouse with an inventory shortage.

First, let's take a look at the warehouse card for this item at the warehouse with the shortage. If a warehouse card reveals a negative inventory of the daily stock, you need to create a transfer for before the date the negative stock appears on the warehouse card. This will solve two problems at once: you'll repair the negative stock, and consequently the quantity, of the warehouse with the shortage and also fix the excess at the other warehouse. Of course, you must be careful that the warehouse card at the warehouse with the excess does not show a negative stock following the transfer. Because you can also create multiple transfers, warehouse cards can be balanced through suitable arrangement.

Example

At warehouse A there's a shortage of 30 pieces; at warehouse B, there's an excess of 21 pieces.

The warehouse card for article XXX at warehouse A reads:

The warehouse card for article XXX at warehouse B reads:

As you can see, the stock at warehouse A goes negative on 18.7.1999. You need to create a transfer from warehouse B to warehouse A for before this date. How much will you transfer? The warehouse card of warehouse B shows that there were seven pieces in stock on 18.7.1999, which means that up to seven pieces can be tranferred without creating a negative stock at warehouse B.

With the receipt on 6.8.1999, there's enough stock at warehouse B to create a new transfer with the quantity (21 - 7) pieces.

Let's take a look at the warehouse cards following a reconciliation:

The warehouse card for article XXX at warehouse A reads:

The warehouse card for article XXX at warehouse B reads:

As you can see, the transfers have partially straightened out the warehouse cards. What do you do now?

3.2 Shortages at a Warehouse

Shortages at a warehouse are a reliable indicator that all necessary documents might not have been entered or that they were entered incorrectly. In this case, you should also start by printing out a warehouse card to see if a negative stock appeared at any time. If you see that it has, you have to clean up the warehouse card (following the instructions for cleaning up warehouse cards) before you can continue your work.

3.3. Excesses at a Warehouse

Excesses at a warehouse could indicate that an inventory count is incorrect, that some issues were not entered, or that some receipts were entered twice. We also recommend that you carefully examine excesses.  

After each change in materials management in the period before the inventory count, you must recalculate variances from the inventory!

4. Confirming an Inventory

Once you've reconciled an inventory, excesses and shortages must be appropriately recorded.

For all items with an inventory excess, appropriate excess documents (essentially documents for receipts at the warehouse) must be created. For all items with an inventory shortage, appropriate shortage documents must be created (essentially documents for issues from the warehouse).

Documents for excesses and shortages must be created separately for each warehouse used in the program.

Because excess and shortage documents will only balance the physical inventory with the book inventory, they must be appropriately posted in the general ledger.