How bills move stock: inventory receives

When you create a bill that includes inventory items (goods for resale), Usystems does more than record an expense — it also updates your warehouse stock and posts additional GL entries to track the inventory cost.

How a bill with items affects inventory

The inventory receipt: When a bill with line items is created and confirmed, the system automatically creates an inventory receipt (sometimes called a "goods receipt"). This receipt records:

• Which items were received
• Quantity of each item
• Date received
• Cost per unit (from the bill)
• Location/warehouse where items are stored

The receipt moves the items into your active inventory, so they are available for sale or use.

How to view the receipt: Open the bill and scroll to the Receives or Inventory Movements tab. Click any receipt to see its details.

The double posting: expense AND inventory

Bills with items create two GL postings:

Entry 1 — The bill (like an expense bill):

This shows your inventory asset increased and your liability (what you owe) increased.

Entry 2 — If using periodic inventory: If your business uses periodic inventory (you count stock at year-end), the system may post an additional entry to track the cost separately until you reconcile.

Note: The exact GL accounts depend on your chart of accounts. Some businesses use "Cost of Goods Purchased" instead of "Inventory" — check with your accountant.

Cost tracking by item

Each line item on the bill is tracked individually:

• Item name and code — what you purchased
• Unit cost — price per unit (from the bill)
• Quantity — how many units
• Total cost — quantity × unit cost

The system records all three (unit cost, quantity, total) so you can later:

• Calculate the average cost of items
• Track inventory value
• Report on cost of goods sold (COGS)

Multi-currency inventory

If the bill is in a foreign currency:

• The inventory receipt records the original currency and amount.
• The GL entry converts to your base currency using the bill's exchange rate.
• Inventory valuation reports show the inventory in both currencies for reconciliation.

Receiving partial quantities

If your warehouse receives only part of the bill:

• Create a partial receipt (or ask your admin to set this up).
• The bill remains outstanding for the remaining quantity.
• When the rest arrives, create another receipt.

This keeps your inventory and purchase orders in sync.

Returns and adjustments

If you return items to the vendor or discover discrepancies:

• Issue a bill return or credit memo to reduce the bill amount.
• This reverses the original inventory receipt and reduces inventory quantity.
• The GL entry for the return reverses the original posting.

Example: You received 100 units but only 95 were good. Issue a return for 5 units; inventory quantity drops from 100 to 95.

Why inventory postings matter

• Inventory valuation: Your balance sheet shows the total cost of inventory you hold. Accurate inventory postings are critical.
• Cost of goods sold (COGS): When you sell items, COGS is calculated from the cost recorded in these inventory postings.
• Turnover and aging: You can analyze how fast items move through your warehouse.
• Reconciliation: Physical counts should match the GL inventory balance. Mismatches point to lost, stolen, or damaged items.

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