Many Point of Sale transactions offer a Branch tab on the Process (F12) form. This tab allows the designation of an "inventory provided by" and "sale credited to" branch location. When the branches are different at time of sale (invoicing), a transfer of goods is "implied." An "implied" transfer is different from an actual transfer in a few ways. No transfer document is created and transfer in/out counters for the items being sold are not incremented. Financially, however, the inventory is handled similar to a transfer. We've provided below a breakdown of what happens when a transaction with different branch designations is invoiced (tickets, orders, etc.).

Inventory Provided by Branch

The branch selected in this drop down is the only location where inventory is deducted. As previously mentioned, the "branch" tab of the process form does not create a transfer of inventory between branches, but is treated similar to this financially. The following are affected in the supplying branch:

•Inventory (Issues) - "Issues" is a term commonly used to describe the ledger's asset inventory account used for financially recording decreases or increases in inventory due to sales and returns of goods. Other inventory accounts are typically used (or can be used) to record other types changes to inventory such as purchases, for example. Issues are reduced (credited) when items are sold and increased when returned (debited). Issues is only affected in the branch that supplies the inventory.

•Receivables Affiliate - This ledger account is specified in the Point of Sale system mapping for implied transfers. The balance of this account represents the cost value of any goods transferred to other branches (in theory, the cost value of the inventory is owed to the supplying branch by the selling branches... therefore, it's considered a receivable).

•Quantity On-hand - For sales, on-hand is reduced only in the supplying branch. For returns, on-hand is increased only in the supplying branch. When the sale involves a customer order, the committed quantity is reduced in the supplying branch.

•Item Usage - Item usage is updated only in the branch supplying the materials. Usage does not change in the branch being credited for the sale.

•Document Numbering - Documents are assigned a branch identifier. In the case of transactions involving a branch designation, the supplying branch is used, not the selling branch. Companies using branch designators on transactions should be careful to consider this when running reports that use the document branch (which many do).

Sale Credited to Branch

The branch selected here is the only location where sales, cost of sales, and sales tax amounts are updated. Sales totals for the customer, item, sales tax, and branch will update in the branch specified. Inventory assets (issues) are not affected in the "selling" location, just the supplying branch.

 

•Cost of Goods - cost of goods totals are updated in the branch being credited for the sale only. There are "cost of sales" totals kept for a number of different purposes. This includes item totals, customer totals, overall branch totals, and General Ledger. When ledger entries are created, the Point of Sale journal for the supplying branch will reflect an increase of cost of goods sold for the branch. Inventory is reduced in the supplying branch. The receivables and payables affiliates are used as offsets with each branch's journal entries.

•Payables Affiliate - This is a ledger account specified for use with "implied" transfers in the Point of Sale system journal mapping. This account is affected for the branch selling the goods supplied by another. It is a "payable" because the cost of the product is considered as "owed" to the supplying branch and therefore a liability.

Financially, the ledger will update the "credit sales to" branch location for income, cost of sales, payables affiliate, sales tax, and cash-on-hand. Except for costs that may be associated with adjustments, entries that change asset inventory value appear in the journal entries for the branch that supplied the inventory.