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Frequently Asked Questions - mInventory

Who are the best customers for mInventory ?

mInventory is a simple and straightforward software system for managing inventory. It offers the small business a set of purchasing, sales and inventory management functions that can greatly simplify the complexities around establishing, tracking and reporting on your inventory levels. Many small businesses face challenges when it comes to managing inventory, many of which are addressed with business accounting software programs like QuickBooks. However, many of these programs offer a broad range of functions, and don’t typically do a good job with basic inventory management. Additionally, many small businesses find that the complexity of these applications can be overwhelming. We have written mInventory to support the needs of the small businesses that need the functions offered in more sophisticated products without all of the complexity. We hope you agree that we have hit the mark with this product.


What are the major functions supported by your program ?

We believe that we cover the major workflows around inventory management including vendor management, purchasing and a complete sales processes. This, combined with our compete inventory management support provides a full featured set of software. The diagram below outlines the interactions between these functions and provides an overview of the workflows we support:





How can I get more details on the workflow processes that you support ?

The best option is to review the mInventory Guide that we put together. This can be found on our Online Support screen. 
 

Help me understand how you manage inventory levels in mInventory ?

mInventory automatically adjusts inventory levels based on actions you take in the program. You don't just manually key in the quantity of an inventory item. Inventory levels are increased when you make purchases and are reduced when you make sales. This ensures that you maintain accurate inventory levels. If you need to adjust an inventory level, you can manually make an adjustment. This approach also drives accountability in that you can produce reports on actions that you have taken on an inventory item.


What inventory levels do you keep track of ?

mInventory keeps track of the following states of inventory:

Available - This is the amount of available inventory or On Hand inventory for this item. Available inventory is ready for sale. Available inventory is increased by purchases and decreased by sales. It can also be decreased through the creation of assemblies and allocation of inventory to another item. See Allocated below.

Allocated - Allocated inventory is the quantity of an item that has been used in the configuration of another item (an assembly). For those items that are “assemblies” the items that have been assembled are listed in the components table on the bottom half of the inventory screen. It is these items that will have an “allocated” quantity on their item record. Allocated is somewhat like available, in that the amount of the item is still in your inventory. The difference is that it’s allocated to another item. The allocated count is reduced when you sell the “Assembly” and increased when you build new assemblies.

On Order - The quantity of an item that is part of an outstanding purchase order. This is a purchase order that has been created, but not yet received.

On Hold - The quantity of an item that is part of an outstanding sale. This sale has been created in the system, but not yet marked as shipped.

Sold - This is the number of units of this item that have been sold.


How do you handle Inventory Costing ?

There are several was to value inventory. These are:

FIFO Costing – This is the First-In, First-Out inventory method.  In this model the first item that was received into inventory is the first item that is sold. This is typically used for perishable goods that have a limited shelf life.  The actual cost if each item is recorded and used when calculating inventory cost or cost of goods sold.

LIFO Costing – This is the Last-In, First-Out inventory method. In this model it really doesn’t matter which order the items are received and sold. A good example here is a bin of screws at a hardware store.  They are all the same and typically the bin of screws is refilled by adding new screws on top of existing.  The actual cost if each item is recorded and used when calculating inventory cost or cost of goods sold.

Average Cost – This model can be used with both FIFO and LIFO tracking but inventory cost is handled differently.  For each item, an average cost is calculated based on historic purchases.  When an item is valued or sold, this average cost is used.

Last Cost – Similar to average cost, but the last purchase price of the inventory item is used instead.

mInventory supports Last Cost and Average Cost methods of inventory cost accounting. We recommend that you use Average Cost as it better represents the true cost of an item. You can configure whether the program uses Average Cost or Last Cost in the preferences screen.


How do I change the cost of an item that I am selling ?

You don't.   See the discussion on Inventory Costing above.    When you sell an item, mInventory uses either the Last Cost or Average Cost methods to determine the cost of the item that you are selling.   You have control over which is used and this is set in the preferences screen.   As we discuss in the Guide, we recommend using Average Cost as it better approximates cost when you sell items if they have been purchased at different prices.

It should be noted that the cost of an item you sell is only used to calculate the profit on the sales order.  it has no impact on inventory valuation.


I am creating a Sales Order / Purchase Order, how do I edit the Quantity and Cost/Price ?

We'll try and make this clearer in a future release as it's not obvious and we have received a number of questions here.   The answer is that you edited them directly in the table of items on your sales order/ purchase order.  See below...

When creating a Sales Order.  You can edit the QUANTITY and PRICE for each item that you put on the sales order.   This is done by double clicking on the quantity or price field.   Alternatively, you can press the enter key when the item is highlighted and the edit will be made available.  Update the first value and then press tab to the second and edit it.

When creating a Purchase Order, it's the same as the sales order with the exception that you can edit the QUANTITY and UNIT COST.