Inventory Manual

Keystone Inventory User Manual and Reference Version 1.6.9 11/30/2005 Windows is a registered trademark of Microsoft Corp. Interbase is a registered trademark of Embarcadero All software, the Keystone name and related documents are the proprietary trade secrets and property of GivenHansco, Inc., Columbus, OH, USA. All rights reserved. GivenHansco is not responsible for misprints in this document. No Warranty is implied in the use of the software. Keystone is a registered trademark of GivenHansco, Inc.

Copyright 2005-2016

KEYSTONE Inventory

Manual and Reference

SYSTEM OVERVIEW

Introduction

The Keystone Inventory System is an inventory tracking and reporting application in the Keystone software suite. It reports all aspects of inventory, from ordering, through receipts and/or production of materials. It interfaces to the ticketing and billing system to relieve quantities sold. The Inventory module also features a very powerful tracking capability, allowing inventory levels to be precisely determined, including retroactively. Inventory no longer must be counted or entered during off-hours. Inventory reporting can also report discrepancies and can be used to reconcile on-hand counts. It can even generate General Ledger activity for posting to the General Ledger for lost materials. This manual contains a "Key Concepts" section. Understanding these concepts is vitally important to maintaining correct inventory counts. Please read this section thoroughly, and if a point is not very clear, please contact your GivenHansco Representative for further clarification. It is critical to maintain an audit trail of inventory transactions. After an inventory is taken, file the count sheets. These sheets may become important in reconciling on-hand quantities later.

Key Concepts

Foreword

Please read the following section carefully! The entire Inventory system is based on these key concepts. Attempting to use Inventory without a complete understanding of them increases the likelihood of inaccurate data.

Transaction Based Recording

All inventory activity is transaction based. If there are 20 sales of a product in a given day, 20 transactions are recorded in the database. During reporting, these transactions can be displayed in a summarized manner (one entry for the day, containing a total of all 20 sales), or in a detailed manner (showing each of the 20 sale transactions). Troubleshooting and adjusting is dramatically easier as a result. Transaction-based recording allows inventory to correctly identify the precise date and time of each transaction. The order in which transactions are entered is irrelevant. A transaction dated March 30 can be processed before a transaction March 1, so long as the date is accurately recorded AND a physical inventory has not been conducted (see below). Transactions include the following: Sales

Purchase Receipts Production Receipts Misc. Inventory Transactions (adjustments) Physical Inventory Counts

Time Stamping

All inventory transactions are time-stamped; allowing the system to maintain accurate counts regardless of the order of their entry, provided the correct date and time is specified. It is impossible to overstate the importance of this concept: Misdated transactions will cause unreliable on-hand counts. Once posted, the transaction will make appropriate adjustments instantly. If the on-hand quantity is incorrect because material received yesterday is not in the system, simply backdate the material received and the on-hand quantity is corrected. The time of a transaction is as vital as the date. A transaction dated at 5:00 (5:00am) takes place prior to the business day, where 17:00 (5:00pm) takes place after. Incorrect times would result in incorrect counts throughout the day. It is possible to leave the time the time field blank. This would result in a default of 00:00 (midnight, the start of the day). However this is NOT recommended as it can unnecessarily complicate troubleshooting and adjustments as well as throwing off on-hand counts for that day (see above example).

Physical Inventory

Physical inventory entries are not to be made lightly. Their impact to the system is very significant and must be thoroughly understood to avoid problems. Physical inventory sets a baseline for the on-hand count. This tells the inventory system where to begin when calculating counts. If a sale transaction pre-dates a physical inventory count, its value will not affect the count. This is a desired result. It allows inventory to be conducted during business hours. If a count takes place at noon, sales at 9:00am shouldn\’t adjust the count, while sales at 3:00pm should. However a mis-dated or mis-timed physical inventory entry can cause catastrophic results. For example, if an inventory count took place at 5:00pm on March 3, but was dated on March 1, then several days\’ worth of sales would be incorrectly deducted from the on-hand counts. Similarly, an adjusting entry that pre-dates a physical inventory entry will have no effect on the count. If an inventory count took place at 5:00pm on March 3, an adjustment dated March 1 would have no impact on counts, because the baseline value is set from the most recently dated inventory count. See Appendix A – Troubleshooting for examples and additional information.

On-Hand Counts

On-hand inventory counts are not a single value stored in the database. Instead, they are calculated as needed. The first step is to get the most recent physical inventory count. Once that value is found, all transactions prior to that date and time are ignored. Next, all activity since that point (sales, received products, etc.) are taken into account. A final adjustment is handling the tickets that have yet to be invoiced. At Keystone ticketing workstations, the On-Hand Inquiry function includes these unbilled transactions to report the most conservative on-hand. Inventory reporting on the other hand gives the user the option to include or exclude these unbilled tickets.

Diagnostics & Adjustments

Time stamping makes the timing of corrections more critical. If adjusting entries are required, they must be carefully time stamped to have the desired impact. For that reason, it is important NOT to leave the time field blank. A blank time field indicates 00:00, meaning the beginning of the day. If a correcting entry is required and it must precede the entered transaction, it would not be possible. The correcting transaction would also have to be stamped at 00:00. Under the right circumstances, this could create problems. If corrections are required to a physical inventory count, the preferred method is to simply re-key the transaction, using a time stamp of one minute after the original (incorrect) entry.

Data Flow

Product Data

Product information is entered and maintained under the Accounts Receivable File Maintenance Menu. All product-based information is entered here, including costs, product type, location, and vendor information.

Material Ordering & Receipts

As orders are entered, they are recorded for display to allow other users to see pending orders and projected on-hand quantities. As products are received or produced, the on-hand quantities are updated and pending order quantities reduced.

Raw Materials Usage

Raw materials (sand, stone, cement, etc.) are relieved from stock when the mixes containing them are batched. See the Product Setup section for additional information.

Sales Transactions

Whether via Keystone ticketing or importing data from a third party system, inventory will relieve on-hand quantities as appropriate.

Miscellaneous Inventory Transactions

Adjusting entries can be made for waste, damage, theft, etc. These entries adjust on-hand counts and can optionally be set up to generate the appropriate General Ledger activity to represent the transaction.

Physical Inventory Entry

Physical inventory counts are entered based on each operation\’s needs, whether it be weekly, monthly, quarterly or annually. Discrepancies between calculated and actual on-hand quantities are shown during data entry, so anomalies can be investigated.

Reconciliation

Inventory Reconciliation generates General Ledger activity and reports detailing discrepancies between calculated and actual on-hand quantities.

System Startup

In order to get your Inventory system started in correct alignment with your other applications, there are some special steps to take when you first get your system up and running.

1. Review your current product codes. Are they easily understood? Are they concise? Are they structured logically? Do you have multiple plants? Are your product classes split according to your reporting needs? Your GivenHansco Installation Consultant is available to answer questions and offer advice
2. Gather information about your products. Review your current costs. This is also an excellent time to evaluate your pricing policies, product descriptions and minimum quantities. What product codes are obsolete? Can some be merged?
3. Compile the mix designs for all your concrete products and enter them into the Components section of Product Maintenance.
4. Contact your GivenHansco Installation Consultant to discuss strategies on entering your product codes into the system. We can offer advice on different strategies for coding and grouping your products.
5. Review for accuracy. Once a product has sales history, the product cannot be deleted. It is a very good idea to review data for accuracy prior to going live.

Product Setup

Before inventory functions are available, products must be flagged for tracking within Inventory. This is done in Product Maintenance. Choose the product and change the STOCKED flag to "Y". This is also an excellent time to identify the Reorder quantity as well as the Standard Cost. If you do not see the STOCKED option, please contact GivenHansco Support at 800- 548-9754. Product Maintenance Screen

Product Components

While concrete itself is not a stocked item, the raw materials (components) are. Entering the mix design into Keystone offers several significant advantages:

1. Automatically relieves on-hand quantities of the ingredients used in the mix.

Note: Quantities are relieved based on TARGET weights, not actual batch weights.

1. Daily usage reports are available during ticket import.
2. Unit Cost of the mix is easily calculated and recalculated without additional data entry.

If you do not see the COMPONENTS tab, please contact GivenHansco Support. Product Components Screen = MENU OPTIONS=

Menu Navigation – Inventory Control

Menu Overview

Purchase ReceiptsUse this option to enter receipt of materials ordered from vendors. Production ReceiptsAny manufactured products are updated with this option. Misc. Inv. TransactionsThis option is used to make adjusting entries to on-hand quantities. This is most typically used for damaged, lost or stolen products. Physical Inventory EntryThis option is used to enter physical inventory counts. Inventory can be entered at any point. There is no need to shut down other Keystone functions during inventory entry. On Order MaintenanceUse this option when placing an order. As materials are received, they are deducted from the outstanding order quantity. Inventory Requirements ReportThis report is used to project inventory needs. Inventory Status ReportThis report is used to show the current state of the inventory, including historical reporting, comparisons to minimum quantities and oversold materials. Inventory Valuation ReportThis report calculates the inventory value, based on criteria selected within the report. Physical Inventory Work SheetsInventory count sheets are printed from this option. It can be run in a variety of ways to generate counting worksheets. Product Transactions ReportThis report is diagnostic in nature, used to investigate discrepancies or track movement of a product. Inventory Batch ListThis report generates a list of all pending (unposted) inventory transactions.

Purchase Receipts

Purchase Receipts are entered into the system in batches. A batch is any grouping the user chooses so long as all materials received in the batch are to be recorded in the same accounting period. (Example: January receipts should never be entered in the same batch as December). Users may choose the Batch Id, which can be reused after posting. Typically, the Batch Id is the receiving date to avoid conflicting with other unposted batches. Multi-plant operations often add a plant suffix as well. Purchase Receipts Screen

Recurring Batches

Inventory offers support for regularly occurring purchase receipts. Batches can be set up once and then applied many times. This is most frequently seen with standing orders. To establish a batch as a recurring batch, check the box. These batches can be set up with regularly occurring receipts.

Recurring Batch Option

Once a batch is established as a recurring batch, it cannot be posted. Instead, changes to the batch are considered changes to the master copy. When you bring up a recurring batch, you will need to tell the system whether you are editing the recurring batch (the master copy) or creating a batch for posting. To create a batch for posting, click NEW BATCH to create a transaction batch.

Recurring Batch Confirmation

Once a transaction batch is created, it will appear with a -T01 suffix. This represents the number of open occurrences of this batch. At this point, any changes made to the batch will be in effect for this posting only. For variable transactions, generate the posting batch first and then apply your changes to it before posting.

Posting a recurring batch

Data Entry

The Purchase Receipts screen has two sections. The left section is devoted to the receipt of the product. The date, time and quantity received and cost are all key fields. Some basic costing information appears on the right half of the screen. If there is a unit cost available, it may be entered. The total cost is then derived by multiplying the quantity times the unit cost. If there are additional charges (delivery, fuel, etc.), an alternative is to enter the total cost from the invoice amount instead. The unit cost is then calculated automatically by dividing the total by the quantity received.

Purchase Receipts Product Entry Screen

Cost Lookups

The right section of the screen contains costing information. This information is generated automatically and displayed to assist user in spotting inaccurate information.

When the batch is posted, a report (indicated below) is generated to provide an audit trail for the inventory transactions.

Purchase Receipts Cost Lookup Screen

Data Entry Fields

'Field Name'Description / Usage

Batch Information

Batch IdThis Batch Id is any field the user chooses to use to separate this group of invoices from another group of unposted invoices. It can be alphabetic or numeric characters. A Batch Id can be reused after posting. A Batch Id must be 10 characters or less. Date ReceivedThe field contains the default date of the material being received. This value can be overridden on each line if needed. DescriptionThis is a description of the batch. For short batches which will be posted quickly, it is not necessary to fill in this field. It is especially useful to fill in this field for recurring batches.

Product Information

Product IdEnter the Product received here. You may do a lookup of all stocked products by pressing the <F4> function key and entering the first few letters of the product description. DescriptionThis field is the product description and is filled in automatically after the Product Id is entered. U/MThis field contains the product\’s unit of measure and is filled in automatically after the Product Id is entered. Date RcvdEnter the date the material entered on-hand stock. This field will default to the batch\’s default, but can be overridden on a line-by-line basis. Due to the transaction-based nature of the Inventory system, this date is critical for accurate counts. Time RvcdEnter the time the material entered on-hand stock. If left blank, the time will default to the start of the day entered in the previous field.. While this will not cause problems, it is not a recommended practice, as it makes it impossible to pre-date another transaction to it if necessary. Qty RcvdEnter the quantity entering on-hand stock. If an order was filled incompletely, only enter the amount received, not the outstanding order amount. Unit CostIf there is a per-unit charge, it can be entered in this field. Once entered, it will multiply the quantity received by this value and generate the Total Cost value. Total CostThis value is derived by the system automatically. If the invoice contains additional charges not included in the unit cost of the material (eg: Fuel surcharges, etc.), then simply enter the invoice amount in this box and the system will derive the unit cost. Avg CostAverage Cost is a calculated value, taking the average cost of purchasing this material from the purchase history. Last CostThis value is the cost entered the last time this product was purchased. Std CostThis value is set by the user in Product Maintenance.

'Field Name'Description / Usage Product IdEnter the Product received here. You may do a lookup of all products by pressing the <F4> function key and entering the first few letters of the product description. DescriptionThis field is the product description and is filled in automatically after the Product Id is entered. U/MThis field contains the product\’s unit of measure and is filled in automatically after the Product Id is entered. Date ProdEnter the date this product entered inventory. Due to the transaction-based nature of the Inventory system, this date is critical for accurate counts. Time ProdEnter the time that the product entered inventory. Old O/HThe current on-hand quantity is displayed here. ProducedEnter the quantity of finished products produced. New O/HAfter entering the Produced quantity, this field contains the new on-hand quantity.

Misc. Inventory Transactions

Inventory receives transactions from physical count entries, purchases, sales and production. These transactions are logged automatically. This option is used to adjust inventory levels due to non-billing related transactions (eg: breakage, loss, theft, etc.) In the example to the right, at 11:52 on 11/3, we discovered 5 broken 6" regular blocks.

Misc. Inventory Transactions Screen

Data Entry Fields

'Field Name'Description / Usage Product IdEnter the Product here. You may do a lookup of all stocked products by pressing the <F4> function key and entering the first few letters of the product description. DescriptionThis field is the product description and is filled in automatically after the Product Id is entered. U/MThis field contains the product\’s unit of measure and is filled in automatically after the Product Id is entered. Trans DateEnter the date of the transaction here. Due to the transaction-based nature of the Inventory system, this date is critical for accurate counts. Trans TimeEnter the time of the change. Old O/HThe current on-hand quantity is displayed here. ReturnedEnter the quantity returned (ADDING) to the on-hand quantity.. IssuedEnter the quantity issued (SUBTRACTING) from the on-hand quantity. New O/HAfter entering the Returned/Issues quantity, this field contains the new on-hand quantity. Offset G/L AccountInventory can generate G/L transactions for your system using this field. This field represents the offsetting G/L account for the inventory transaction. For example, if you are issuing 5 products from stock due to theft, you would enter your G/L expense account number here. Keystone would then CR the inventory account and DB the expense account. Conversely, if material was being returned to stock, it would DB the inventory account and CR the account specified in this field.

Physical Inventory Entry

Each physical inventory must be entered into Keystone to establish accurate on-hand counts. Inventory may take place at any time. A key strength of Keystone is the ability to conduct inventory while the business is open. Owing to the time-stamp, Keystone can easily identify which sales affected the counts and which did not. For example, if a product was counted at noon, Keystone will not decrease the on-hand to reflect a 9:00am sale, but will decrease the on-hand count for a 2:00pm sale.

Physical Inventory Entry Screen

Data Entry Fields

'Field Name'Description / Usage Product IdEnter the Product counted here. You may do a lookup of all stocked products by pressing the <F4> function key and entering the first few letters of the product description. DescriptionThis field is the product description and is filled in automatically after the Product Id is entered. U/MThis field contains the product\’s unit of measure and is filled in automatically after the Product Id is entered. Date CntdEnter the date of the physical count here. Due to the transaction-based nature of the Inventory system, this date is critical for accurate counts. Any sales transactions prior to this date will NOT deduct from the on-hand. Time CntdEnter the time of the physical count. It is critically important this information is recorded on the count sheets, as any sales transactions prior to this time will NOT deduct from the on-hand. On HandThe current on-hand quantity is displayed here. CountEnter the physical count in this field VarianceThis calculated field shows the difference between the theoretical on-hand and the actual physical count. Offset G/L AccountInventory can generate G/L transactions for your system using this field. This field represents the offsetting G/L account for the inventory transaction. For example, if the variance is 10 units, you would enter your G/L expense account number here. Keystone would then CR the inventory account and DB the expense account. Conversely, if material was being returned to stock, it would DB the inventory account and CR the account specified in this field.

On Order Maintenance

'Field Name'Description / Usage As Of DateEnter the date you wish to reconcile inventory. Due to time-stamping, it is possible to generate Inventory activity in a new period before closing the previous one. Ignore Prior TransactionsBackdated transactions into a previously reconciled period can cause confusion. Checking this box will omit these backdated transactions from the current reconciliation. Accurately reconciled transactions are automatically omitted from the reconciliation. Inventory Balance ReportCheck this box to receive a copy of the Inventory Balance Report (see below). This report contains a list of all stocked products, the quantity on-hand and the newly calculated Average Cost. G/L Transaction RepotCheck this box to receive a copy of the General Ledger Transaction Report (see below). This report is generated from all the G/L transactions generated from the various Inventory adjustments (any screen allowing an offset G/L entry). Inventory Reconciliation Status Report Sample

The Inventory Reconciliation Status Report shows a list of any errors (anytime a product\’s on-hand quantity went negative any time in the period). Any such occurrence will prevent Inventory Reconciliation. Unless this report shows "NO RECONCILIATION ERRORS", Inventory cannot be reconciled. Since a negative on-hand count is an impossibility, any entries shown must be investigated and corrected. Inventory Reconciliation Balance Report Sample Inventory Reconciliation G/L Transaction Report Sample

Appendix A – Troubleshooting

General Guidelines

The overwhelming source of problems with Inventory stems not from quantities or omitted transactions, but instead problems with the date stamp entries on transactions. In general, inventory problems rarely originate from sales transactions. With sales tickets originating from Keystone or being imported, the sale date tends to be the most reliable date encountered in Inventory. This is not to say that problems will never stem from ticketing. The advice is given more as a recommendation to search elsewhere before considering sales activity. The first place to look for a problem is the most recent Physical Inventory Entry. Check the quantity first, then the date and time. A discrepancy on the timestamp is one of the most common problems.

Helpful Strategy – Divide and Conquer

The 'Product Transactions Report' is the best tool for diagnosing problems in inventory. Run this report for one product at a time. When possible, use the smallest date range as well. For example, if a product\’s on-hand count at the end of the month is incorrect, but was known to be correct on the 15th of the month, run the report from the 16th to the 31st. Check the beginning balance on the 16th. If this beginning value is correct, then the problem clearly occurred sometime after this date. Review your report. If the beginning value is wrong (but had been right before), then the problem is clearly the result of a backdated transaction. Use earlier dates on the report and see where the transaction went awry. A very common problem when entering dates is entering an invalid year. This is especially common in January and February, when people are still used to using the previous year.

Short / Negative Inventory Counts

The most common reasons for a shortage in inventory counts are:

• Future-dated Purchase Receipts/Production Receipts

(The material will not be considered on-hand until the date specified.)

• Purchase Production/Receipts that pre-date the last inventory count.

(Transactions that pre-date an Physical Inventory will not adjust)

• Misdated Physical Inventory Entries (entered earlier than actually counted)

(If a Physical Entry is pre-dated, sales activity that had already impacted the on-hand could be double-counted against the on-hand quantity)

• Incorrect quantities entered in inventory.

High Inventory Counts

The most common reasons for higher-than-expected inventory counts are:

• Back-dated Purchase Receipts/Production Receipts.
• Misdated Physical Inventory Entries (entered later than actually counted)

Appendix B – Conducting Inventory during business hours

General Guidelines

Conducting inventory during business hours is a departure for some of our customers. The following section offers tips on conducting inventory during business hours.

1. Prepare

Preparation becomes more important when timing becomes more critical. Ideally, most of the preparation should be complete the night before. This includes:

• Organize products. Group like products together to ease in counting.
• Generating count sheets
• Verify the time on your computers is accurate!
• Prepare kits for each person counting, containing:
  • Clipboard
  • Pencil
  • Time-keeping device, synchronized to the clock on the computer. (The time of the count MUST be recorded)
  • Lined paper for counting materials not on their count sheets.
• Meet before counting, emphasizing the importance of recording the time that the count took place (see next section)

2. Conducting the count

Every person conducting a count must understand the significance of the time they record on their counting sheet. If a customer is carrying merchandise that is being counted, and has yet to check out, be sure these items are included in the inventory count, as they will be relieved shortly when they bring them to the counter – due to time stamping, we want our count to include merchandise not yet sold.

3. Interruptions

Interruptions are not a problem. Simply finish the current count, record the time of the count and note where you left off. When you return, simply resuming counting and note the time.

4. Data Entry

After gathering all count sheets, data entry can begin anytime, whether it is a day or a week later. What is critical however is that the date time that the physical count took place is accurately recorded.

5. Recounts (counting errors)

If errors in the count are discovered during data entry, rather than post adjusting entries, it is better to skip that entry, recount the material and post that value with the date and time the recount took place.

6. Corrections (typographic errors)

Once entered and accepted, Physical Inventory entries cannot be adjusted. The best solution is to re-key the product and quantity, adding 1 minute to the count time from the original inventory. This assures that when the system reads the most current Physical Count, it will select the adjusted entry rather than the original (incorrect) entry.