Aspects of restrictions on the amount of accounting balances in terms of automation systems
The problem of negative balances in commodity accounting often arises in the segments of retail, restaurant management and manufacturing. In other segments of the business (say, wholesale), this problem also makes itself felt, but probably to a lesser extent.
The essence of the problem is that the commodity item actually sold or spent for production may not be present in sufficient quantities on the accounting balance. Further, I will call this phenomenon “accounting deficit of goods” or simply “deficit”. I suppose the reader is well acquainted with the causes of the accounting deficit, and therefore I will not go into their description. The purpose of the article is to consider ways to solve this problem in software automation systems.
And so, the first answer of the system to the accounting deficit is a simple permission to have a negative balance of the goods.
This is a fairly common practice, with obvious advantages:
The disadvantages of this option are less obvious, but significant:
The second approach to the problem of accounting deficit consists in total blocking of operations, leading to negative balances.
All the minuses of the assumption of negative balances disappear, but the problem of constant obstacles to entering the documents for registering the expenditure of commodity nomenclature arises in full growth. This difficulty very quickly disappoints users and management of the enterprise in the automation of accounting, because the absence or unacceptable delay in registering transactions is perceived much worse than the disorder arising from negative balances.
The third approach is the most difficult. It consists in blocking operations leading to deficits, combined with mechanisms to combat deficits and compensate for deficits.
I will list measures to combat the accounting deficit and the technique of compensation.
The correct restriction on the non-negativity of balances should include not only the current value, but also apply to any date. That is, when creating or modifying a document retroactively, the system must check and recalculate the balances so that at no point in time the balances of the goods included in this document become negative.
Ignoring this rule either makes the restriction senseless or makes it block the creation and modification of documents retroactively (which does not completely solve the problem and causes a lot of complaints from users).
An additional restriction on the amount of the balance arises with batch accounting. It consists in the prohibition of exceeding the remainder by lot of the value that was originally capitalized. The meaning of this restriction is less obvious than for negative residues. An example is the report on (un) paid balances of the goods of the supplier. If the specified rule is violated, the report will be distorted.
Most often, the need to control the upper limit of the balance of the lot arises during the return operations.
The described aspects of restrictions on the value of commodity balances are formulated on the basis of experience in the development and operation of the Petroglyph company’s Papyrus enterprise management system, which implements tight control of batch stocks in combination with the mechanisms considered.
The essence of the problem is that the commodity item actually sold or spent for production may not be present in sufficient quantities on the accounting balance. Further, I will call this phenomenon “accounting deficit of goods” or simply “deficit”. I suppose the reader is well acquainted with the causes of the accounting deficit, and therefore I will not go into their description. The purpose of the article is to consider ways to solve this problem in software automation systems.
I
And so, the first answer of the system to the accounting deficit is a simple permission to have a negative balance of the goods.
This is a fairly common practice, with obvious advantages:
- The personnel of the enterprise responsible for recording the write-off of goods (sales, write-off of raw materials, etc.) do not have to worry about the correctness of accounting by other employees - it simply does its job quickly and without interruption.
- The cost of developing a system with this approach is noticeably lower than with other options.
The disadvantages of this option are less obvious, but significant:
- When analyzing the activities of the enterprise it is impossible to identify the moment of occurrence of the deficit for a particular commodity position. That is, if you see a balance of -100pcs, you will not be able to determine whether this deficit arose yesterday, a month ago, or accumulated over the course of a year.
- A continuation of the previous paragraph is the inability to determine the nature of the occurrence of the deficit over time. No one will be able to remember whether there was a shortage due to over-sorting, because they shipped orange juice instead of apple juice, or forgot to enter a purchase invoice, or if sellers on the trading floor handed over cheap cheese to customers sticking an expensive one on it.
- In the event that deficit problems are not resolved quickly, then all commodity accounting loses its meaning, since the accumulated problems greatly distort the analysis results. And the longer the decision drags on, the greater the mess. In the end, management usually conducts a total inventory and starts accounting from scratch (which quickly turns into the same as it was before the inventory).
- The difficulty following the first advantage: as long as the personnel registering expendable goods transactions are not limited by the presence of accounting balances, then (without the tough pressure of the management, which is expensive), it will not respond to deficit events. Accordingly, the aggravation of the problem will get an avalanche-like character, and we return to the previous paragraph.
II
The second approach to the problem of accounting deficit consists in total blocking of operations, leading to negative balances.
All the minuses of the assumption of negative balances disappear, but the problem of constant obstacles to entering the documents for registering the expenditure of commodity nomenclature arises in full growth. This difficulty very quickly disappoints users and management of the enterprise in the automation of accounting, because the absence or unacceptable delay in registering transactions is perceived much worse than the disorder arising from negative balances.
III
The third approach is the most difficult. It consists in blocking operations leading to deficits, combined with mechanisms to combat deficits and compensate for deficits.
I will list measures to combat the accounting deficit and the technique of compensation.
- A simple conclusion is that the accounting balance of such and such goods is not enough to complete the operation.
The most uncomplicated method, simply informing employees about the problem and leaving to their discretion options for its manual elimination to perform the required operation. This, of course, is not, in the full sense, a measure to combat the accounting deficit, but an instrument of control, of course. Much better than a simple message, "Operation not completed." - Storage of a structured history of accounting deficits associated with a particular function of write-offs from balances.
Step towards improvement. The idea is that some operation, in which a shortage is possible, stores information about scarce goods and how many are missing for analysis and correction.
This technique works great when writing off box office retail sessions. Since the cash session is stored in the database, the association with it of a set of goods that could not be written off from the accounting balance due to a deficit seems to be easily implemented. The operator can immediately see the problems, solve them and then repeat the operation, so that the system writes down those sales, the balances of which were restored as a result of the decisions made.
A good help in eliminating difficulties in this case is the possibility of substitution: the operator finds out that the goods passed through the cash register are listed on the balance under a different nomenclature name and substitute this name instead of the scarce one. The system replaces the substitute instead of the original product. It goes without saying that management should be able to analyze such permutations. - Forced formation of the remnants of the missing goods, by automatically creating a receipt document.
The idea of the method is quite simple - the system, having discovered the accounting deficit, creates a receipt document in which there are all the deficient goods in the quantity necessary for the operation. After that, it remains to manually or automatically repeat the main operation.
This is a crude method of eliminating deficit problems, similar to the primitive approach with the assumption of negative residues, but slightly better, because it makes it possible to track and analyze documents that form artificial residues.
Ultimately, you still have to choose a way to get rid of the capitalized balances or somehow level their existence (at least in sum terms, otherwise, after the next inventory, employees will arrange a riot). - Functions of compensation for the deficit due to balances in other warehouses or through picking (manufacturing of missing goods), provided that the system “knows” how to pick them.
The most subtle and complex method of resolving the accounting deficit problem. It should be noted that it is applicable only to the so-called retroactive accounting processes. That is, when auxiliary operations (transfer between accounting storage areas, production of products for direct order, etc.) are normalized and are not entered manually. Schedules of reverse write-offs are often used in the restaurant business and in retail trade when accounting for their own production (salads, pastries, etc.).
In contrast to the reverse process, in the direct accounting process, all auxiliary operations are taken into account just-in-time and there can be no “normal” deficit (at least, it should not).
And so, the deficit compensation consists in the fact that the system, identifying the deficit by the item names that can be "picked up" from another warehouse or made, automatically performs the corresponding operations according to the rules specified in the configuration. There are several technical difficulties, typical, however, for most developers of automation systems:- Writing off production can be cascading: some of the ingredients of the final product being manufactured are themselves production objects. Here the use of MRP tables comes to the rescue.
- A combined write-off is possible in the form of generating production documents in one warehouse and transferring it to the final write-off warehouse (workshop -> trading floor). A rather serious problem requiring the definition of a complex configuration and well-known programming skills.
- The components of manufactured products themselves may be in a deficit, in which case we return to the beginning of the discussion, but with additional difficulties.
By the way, the reverse write-off technique with strict restriction on the non-negativity of balances eliminates the need for artificially dividing the item into a product / set, because if the product is not in stock and the system has a production rule, it will be created from existing components. If there is a balance, it will write off what is.
Add nuances
The correct restriction on the non-negativity of balances should include not only the current value, but also apply to any date. That is, when creating or modifying a document retroactively, the system must check and recalculate the balances so that at no point in time the balances of the goods included in this document become negative.
Ignoring this rule either makes the restriction senseless or makes it block the creation and modification of documents retroactively (which does not completely solve the problem and causes a lot of complaints from users).
An additional restriction on the amount of the balance arises with batch accounting. It consists in the prohibition of exceeding the remainder by lot of the value that was originally capitalized. The meaning of this restriction is less obvious than for negative residues. An example is the report on (un) paid balances of the goods of the supplier. If the specified rule is violated, the report will be distorted.
Most often, the need to control the upper limit of the balance of the lot arises during the return operations.
As an afterword
The described aspects of restrictions on the value of commodity balances are formulated on the basis of experience in the development and operation of the Petroglyph company’s Papyrus enterprise management system, which implements tight control of batch stocks in combination with the mechanisms considered.