Forum Discussion

Oceana's avatar
Oceana
Contributing Cover User
3 years ago

Inventory purchase at wrong price

Hi all,

I have a supplier that has billed me a large qty of items at a lower price by mistake. They are sending me a new invoice with the correct prices and credit note to apply to the initial invoice, however I have already sold a lot of items. What is the best way to correct this so the average price is based on the correct buy price and not averaged down with the wrong price. The price difference is considerable, for example instead of billing at 2.95 it was initially billed at 0.45. I can't enter the credit adj for the total qty originally billed as some are sold. If I was to raise a credit adj purchase for the qty I have remaining to zero out the average cost, could I then enter the new supplier invoice with correct pricing, then go back to the credit adj purchase and update the qty so my final inventory count is correct?

This affects about 30 items across 100 sales transactions so I cannot simply delete the original sales associated and start again. Will make too much mess for the customer accounts side of things.

Thanks for your help and advice

  • Hi Oceana , I suggest you record a service bill on the supplier's account for the extra cost, allocated to an inventory adjustment account, and then record an inventory adjustment to increase the cost of the remaining stock, allocated to the same account.

     

    These two entries will partially offset each other; the net debit matches the amount of excess gross margin on the sales recorded since the first purchase, which as you note, can't be corrected.

  • Mike_James's avatar
    Mike_James
    Ultimate Partner

    Hi Oceana , I suggest you record a service bill on the supplier's account for the extra cost, allocated to an inventory adjustment account, and then record an inventory adjustment to increase the cost of the remaining stock, allocated to the same account.

     

    These two entries will partially offset each other; the net debit matches the amount of excess gross margin on the sales recorded since the first purchase, which as you note, can't be corrected.