What is Inventory ledger Integration

In Pastel accounting software, the processing of sales and purchase transactions updates both the customers’ control accounts and supplier control accounts in the general ledgers. A contra entry is created to balance the general ledger in what is known as inventory ledger Integration.

Two methods of Inventory integration in Pastel

Partial integration.

The income statement sale account is updated by Sales transactions while income statement accounts for purchases are updated by purchase accounts. The inventory doesn’t integrate into the general ledgers.

Full integration.

Pastel keeps an inventory balance sheet account that often reflects your inventory cost value. This is referred to as the perpetual inventory method. Extra entries to the GL are created to gain full integration, e.g, when items are sold, the value cost of the item will move from the GL inventory account to the cost of sales account.When not fully integrated, the GL does not reflect any activity in the inventory. For a meaningful balance sheet, you will enter journals manually in order to make the inventory account updated. You will get the values for these journals from the inventory reports.

Which Method Should You go for?

There is no straight answer to this question. But here are some few suggestions:

1. When you are primarily a service organization, and you don't sell many physical items, don't integrate inventory.
2. If mainly you sell physical goods, should consider integration.
3. If you control your inventory accurately, and you do not allow the theoretical quantity on hand to be negative, you should integrate inventory
4. If your theoretical quantity on hand is often negative, and inventory costs vary considerably, non-integration is a better way to go.

Changing Integration Methods

1. You can turn integration on or off at any time, but it is likely to bring an overlap in the general ledger. If you wish to change the field, it is advisable to do it at the beginning of the month. Producing financial statements will reveal months that have inventory from the ones excluded.
2. If you switch from non-integrated to integrated, you must put through an adjusting journal to your inventory control account(s) to reflect the cost value of your inventory. The contra account will be a linked purchase account to the cost of sales, financial category.

Tip: Choose one integration method and stick with it. Unless you have a good reason to do otherwise, choose full integration.

Creating and Editing Inventory Groups

You create and edit inventory groups in the Setup>>Inventory menu option, in the Integration / Groups tab.

Creating and Editing General Ledger Accounts

You use the Edit>>General Ledger>>Accounts menu option to create and maintain general ledger accounts. A screen like this appears

 To create a general ledger main account

1. Click on edit
2. Click on general ledger
3. Click on accounts
4. Enter the details as above
5. Choose P to save and enter a new one
6. Click Ï to abandon the entry
7. Click Close to quit the general ledger accounts window

To create a general ledger sub-Account

1. Click on edit
2. Click on general ledger
3. Click on accounts
4. Select new
5. Enter the main account number and the sub-account number, then the account description
6. Choose P to save and enter a new one
7. Click Ï to abandon the entry
8. Click Close to quit the general ledger accounts window

In the Details tab you enter static information, the Balances tab shows you the account balances, and in the Notes tab you can attach notes to the account:If you use the Setup Assistant to create a company, Pastel creates general ledger accounts that match your type of business. You can then create additional accounts or delete those you do not need.

Deleting General Ledger Accounts

You use the Data Remote facility to delete accounts. Before deleting a general ledger account, Pastel first checks whether it can in fact be deleted. The rules are:

1. Pastel can only delete an account that has a zero balance.
2. Even if the account's balance is zero, you cannot delete the account if it has transaction history. Each time you process to an account, Pastel creates a transaction. Pastel stores these transactions for two financial years. This means that you can only delete a general ledger account if it has been inactive for two financial years.
3. You cannot delete a main account if it has sub accounts. You should delete the sub accounts.
4. You cannot delete an account if it is a control account.

To delete a general ledger account

1. Use the Data Remote's navigation buttons to locate the account.
2. Click the Delete button. Pastel checks if it can delete the account.