Aspects of restrictions on the value of accounting balances from the point of view of automation systems

The problem of negative balances in commodity accounting often arises in the segments of retail trade, restaurant management and production. In other business segments (say, wholesale), this problem also makes itself felt, but probably to a lesser extent.

The essence of the problem lies in the fact that the commodity item actually sold or spent for production may not be present in sufficient quantity on the accounting balance. Further, I will refer to this phenomenon as the “accounting deficit of goods” or simply “shortage”. I suppose the reader is well aware of the reasons for the occurrence of the accounting deficit, so 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 option for the system to respond to the accounting deficit is simple permission to have a negative balance of goods.

This is a fairly common practice with obvious advantages:

• The personnel of the company responsible for registering transactions for writing off goods (sales, writing off raw materials, etc.) should not be concerned about the correctness of keeping records by other employees - they simply do their work quickly and without stopping.
• The cost of developing a system with this approach is noticeably lower than with the case of other options.

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The disadvantages of this option are less obvious, but significant:

• When analyzing the activity of an enterprise, it is impossible to identify the moment of the occurrence of a deficit for a particular commodity item. That is, if you see a balance of -100pcs, then you will not be able to identify this deficit yesterday, a month ago, or accumulate within a year.
• A continuation of the previous paragraph is the impossibility in the course of time to determine the nature of the occurrence of the deficit. No one will be able to remember whether there was a shortage due to re-grading, whether they shipped orange juice instead of apple juice, or forgot to enter a delivery note, or did the sellers in the trading hall give cheap cheese to customers by sticking an expensive label on it.
• If the problems with the deficit are not resolved promptly, then the entire inventory accounting loses its meaning, since the accumulated problems greatly distort the results of the analysis. And the longer a decision is delayed, the more confusion arises. In the end, management usually performs a total inventory and starts counting from scratch (which quickly turns into the same thing as before the inventory).
• Difficulty following the first advantage: if the personnel registering the expenditure of commodity operations is not limited by the presence of accounting balances, then it will not (without the strict management pressure, which is expensive) respond to the events of the deficit. Accordingly, the aggravation of the problem will be avalanche-like, and we return to the previous paragraph.

II

The second approach to the problem of accounting deficit is the total blocking of operations, leading to negative balances.

All the disadvantages of the assumption of negative balances disappear, but the problem of constant obstacles to the entry of documents for registration of the consumption of the commodity nomenclature rises up to its full height. This difficulty very quickly frustrates users and the management of the enterprise in automating accounting, since the absence or unacceptable delay in registering transactions is perceived much worse than the confusion arising from negative balances.

III

The third approach is the most difficult. It consists in blocking operations leading to a deficit combined with mechanisms to combat the deficit and compensate for the deficit.

I will list the measures to combat the accounting deficit and the technique of its compensation.

• A simple output of information that the accounting balance of such goods is not enough to complete the operation.
  
  The most simple method that simply informs employees about the problem and leaves options for its manual removal to perform the required operation. This, of course, is not, in the full sense of the word, a measure to combat accounting deficits, but an instrument of control is unconditional. Much better than the simple message "The operation is not completed."
• Storage of a structured history of accounting deficit associated with a particular function of write-off from balances.
  
  A step towards improvement. The idea is that a certain operation, in which a shortage is possible, saves information about scarce goods and how much is missing for analysis and correction.
  
  This technique works fine when writing off cash sessions in retail. 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 balance due to the deficit seems to be easy to implement. The operator can immediately see the problems, solve them and then repeat the operation, so that the system can write down the sales, the remnants of which are restored as a result of the decisions made.
  
  A good help in eliminating the difficulties is the possibility of substitution: the operator finds out that the goods sent through the cashier are listed on the balance under another nomenclature name and substitutes this name instead of the deficit one. The system instead of the original product charges framed. It goes without saying that management should be able to analyze such substitutions.
• Forced formation of residues of missing goods by automatically creating a parish document.
  
  The idea of ​​the method is quite simple - the system, having detected an accounting deficit, creates a receipt document in which all the scarce goods are present in the quantity necessary for the operation. After that, it remains in the manual or automatically repeat the main operation.
  
  This is a crude method of troubleshooting deficit problems, similar to the primitivism approach with the assumption of negative residues, but a little better, because it makes it possible to track and analyze documents that form artificial residues.
  
  In the end, you still have to choose a way to get rid of the leftover balances or somehow level their existence (at least in sum terms, otherwise the staff will rebel after the next inventory).
• The function of compensating the deficit due to residues in other warehouses or by means of a complete set (manufacturing of missing goods), provided that the system “knows” how to complete them.
  
  The most subtle and complex method of resolving the problem of accounting deficit. It should be noted that it is applicable only to the so-called reverse accounting processes. That is, when auxiliary operations (transfer between accounting storage areas, manufacturing products for direct order, etc.) are normalized and are not entered into manual. Reverse write-off schemes are often used in the restaurant business and in retail when accounting for its own production (salads, pastries, etc.).
  In contrast to the reverse process, with 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 nomenclature 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:
  
  • The write-off of production may be cascade: some ingredients of the final product produced are themselves objects of production. This is where 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 (shop -> sales area). It is quite a difficult problem, requiring the definition of a complex configuration and a known skill in programming.
  • The components of manufactured products themselves may be in the accounting deficit, in this case we return to the beginning of the discussion, but with additional difficulties.
  
  By the way, the reverse write-off technique with strict limitation of non-negativity of residuals eliminates the need for artificially separating the nomenclature into a product / set, because if the product is not in stock and the system has a rule for its production, it will create it from the existing components. If there is a balance, it will write off what is.

Add nuances

The correct restriction on the non-negativity of the 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 is obliged to check and recalculate the balances so that at no point in time the balance of the goods included in this document becomes negative.

Ignoring this rule either makes the restriction meaningless, or makes it necessary to block the creation and modification of documents retroactively (which doesn’t completely solve the problem and causes a lot of user complaints).

An additional restriction on the value of the remainder arises during batch accounting. It consists in prohibiting the excess of the remainder in a lot of the value that was originally credited. The meaning of this restriction is less obvious than for negative residues. As an example, you can cite a report on the (un) paid balance of the supplier’s goods. 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 occurs when carrying out return operations.

As an afterword

The described aspects of restrictions on the values ​​of commodity balances are formulated on the basis of the experience of the development and operation of the Petroglyph company’s Papyrus management system, which implements strict control of part balances in conjunction with the mechanisms considered.