Inventory Zero Out Costs Routine

Overview

The Inventory Zero Out Costs routine corrects inventory valuation issues when an item has no inventory remaining but still carries an inventory value or an incorrect unit cost.

Typical issues include:

• Qty. Base on Hand = 0, but Inventory Value ≠ 0
• Negative or incorrect Unit Cost

These discrepancies are typically caused by rounding differences, interrupted transactions, or incomplete inventory costing.

When to Run the Routine

Run the Inventory Zero Out Costs routine when:

• An item has zero quantity on hand but a remaining inventory value.
• Inventory valuation is incorrect even though inventory has been fully consumed.
• The xZero Out Costs view contains records.

Review Items with Cost Issues

Navigate to:

Items → xZero Out Costs

This view displays items meeting all of the following conditions:

• Qty. Base on Hand = 0
• Expected Cost = 0
• Inventory Value ≠ 0

Review the Item Ledger Entries for these items to identify any obvious posting issues before running the routine.

Optional: Correct Items with Remaining Inventory

The Zero Out Costs routine only corrects items with zero inventory on hand.

If an item still has inventory but you need to reset its costs:

1. Record the current inventory quantities by:
   • Warehouse
   • Bin
   • Unit of Measure
   • Lot Number
   • Serial Number
2. Use the Item Adjustment Journal to reduce the inventory quantity to zero.
3. Complete the Zero Out Costs process.
4. Restore the inventory quantities after the correction is complete using the Item Adjustment Journal.

Use the latest Unit Cost when restoring inventory.

Outstanding Cost Transactions

Before running the Zero Out Costs routine, ensure there are no outstanding inventory costs.

For example:

• Invoice any Purchase Receipts that have been received but not invoiced.
• Finish and cost any Work Orders that have output but have not yet been fully costed.

Step 1 — Run the Daily Adjust Cost Routine

Before calculating Zero Out Cost entries, run the Daily Adjust Cost Routine.

This ensures all existing inventory costs have been finalized before additional correction entries are created.

Step 2 — Calculate Zero Out Cost Entries

Navigate to:

Inventory Resync → Zero Out Costs

Click Calculate Zero Out Cost Entries.

You may:

• Specify a single Item, or
• Leave the Item field blank to calculate entries for all qualifying items (up to the first 500 items).

Batch Size

If your organization has a large number of Item Ledger Entries, Salesforce Governor Limits may be encountered.

To reduce the processing size, create the following Custom Setting:

GL Ledger Assignment

When Multi-Ledger Accounting is enabled:

• If inventory valuation is segregated by Item, GoldFinch uses the GL Ledger assigned to the Item.
• If inventory valuation is segregated by Warehouse, GoldFinch uses the GL Ledger assigned to the Warehouse.

Step 3 — Post Zero Out Cost Entries

Review the calculated entries.

Select the entries you want to post and click Post Zero Out Cost Entries.

GoldFinch creates additional Cost Entries with:

• Zero Quantity
• Non-zero Invoice Cost

These entries eliminate the remaining inventory value while preserving inventory quantities.

Step 4 — Run the Daily Adjust Cost Routine Again

After posting the Zero Out Cost Entries, run the Daily Adjust Cost Routine again.

This generates the necessary General Ledger Entries for the newly created Cost Entries and updates inventory valuation.

Step 5 — Restore Inventory (If Applicable)

If inventory quantities were temporarily reduced to zero before running the routine:

1. Use the Item Adjustment Journal to restore the inventory.
2. Restore the quantities by:
   • Warehouse
   • Bin
   • Unit of Measure
   • Lot Number
   • Serial Number
3. Use the most current Unit Cost when restoring inventory.

Verify the Results

Return to:

Items → xZero Out Costs

Verify that no items remain in the list.

An empty xZero Out Costs view indicates that all qualifying inventory valuation discrepancies have been corrected.

Best Practices

• Always run the Daily Adjust Cost Routine before and after the Zero Out Costs process.
• Ensure all Purchase Receipts and Work Orders have been fully invoiced or costed before correcting inventory values.
• Review the calculated entries before posting.
• If recurring valuation issues continue to appear, investigate the underlying inventory transactions rather than repeatedly running the Zero Out Costs routine.
• Perform this routine before month-end inventory reconciliation whenever items appear in the xZero Out Costs view.

More Information

Resolve the “Too Many Query Rows” Error When Zeroing Out Inventory Costs – GoldFinch Clientcare