# General Business Category > Technology Forum > [Question] Pastel Accounting

## JohanS

Anybody have a solution for when the stock module and the General ledger does not balance? Also what causes this?

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## Dave A

Assuming for a moment it wasn't a technical fault, have you looked for any non-stock module generated entries in the general ledger's stock account?

I had the pleasure of a TB that didn't balance once with Pastel, some sort of database error due to a power blip or something, so it seems technical issues may be a possible cause. But I'd scan for a journal entry or something similar first that might have messed things up. It would just take a misallocated entry in the general ledger to cause the problem.

EDIT: Getting the two balances to match should be as easy as passing a journal entry in the general ledger to reverse whatever caused the error. If the amount is insignificant, I'd make a post to shrinkages or something similar, make a note and let my accountants deal with it next time they visit the books.

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## Dave A

An update:

The problem applies to both Pastel and Quickbooks.

The problem is caused by application of average cost when expensing stock as it it is sold and at valuation time. I've been looking closely at why it should be causing the error.

First, let's understand average cost. When the price fluctuates on individual items, the accounting software has a problem assigning a cost value per item as it processes it for either a sale or stock on hand valuation. It seems the software solves this by taking all the different cost prices and assigning an average value. (I haven't plumbed the depths of the exact formula on how this average is arrived at, but it's the basic idea that needs to be understood at this point).

The result is that with sales and stock valuation transactions, the cost price being used isn't necessarily the actual cost price of the item being sold or valued, and this results in a difference between the stock module and the stock value account in the nominal accounts ledger.

Another factor that will aggrevate this error relates to the timing of capture. When stock arrives and is captured into the system, all sales of that item made prior to capture of the received stock for that day will essentially be expensed at the "wrong" average value.

I can't see a viable day-to-day process solution for the problem. The only way I can suggest to resolve this is at stock take time. The accounting software allows for changes in the stock on hand. However, running the stock adjustment on quantities is not enough - you will also need to check and adjust the cost price for each stock item. Relying on the program calculated average cost just isn't cutting the mustard.

Personally, I'll be applying the cost price per item based on the last bill received, unless there is some reason this value should not be relied on.

This will then produce a reliable value for stock on hand in the stock module. From there post a journal entry between the stock account and whatever you are using for cost of sales to balance the value per the stock module and the stock account in the nominal ledger.

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## Dave A

Another update.

At the end of this financial year, I followed exactly the procedure I set out above. To be clear:



> The only way I can suggest to resolve this is at stock take time. The accounting software allows for changes in the stock on hand. However, running the stock adjustment on quantities is not enough - you will also need to check and adjust the cost price for each stock item. Relying on the program calculated average cost just isn't cutting the mustard.
> 
> Personally, I'll be applying the cost price per item based on the last bill received, unless there is some reason this value should not be relied on.
> 
> This will then produce a reliable value for stock on hand in the stock module.


A bit of a mission, but apart from that so far so good. But then I got to this bit:



> From there post a journal entry between the stock account and whatever you are using for cost of sales to balance the value per the stock module and the stock account in the nominal ledger.


Of course I had to check first to see what that difference might be. Guess what - it was 0. The value of stock per both systems were exactly the same.

This was using Quickbooks. I'd be interested if anyone has tried this procedure using Pastel and what the result was.

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## Wukkie

Hi 

I used to be a PCI, which means I had to knwo pastel quite well. there is a number of app out there that can fix your Problem, but the problem might not be that simple. In the past pastel has had version which posted one side journal enrties. they used to have an app called fixes, which solver some systems problems, but iof that does not help, I sued to use a DDF editor, this allowed your to access the datafiles and fix teh problem. not sure if pastel still use's DDF file, but I can't see why they woudl have changed. 
The stock problme could have also come into effect if you are suing more than 2 decimel places in the stock module, as the accounting only used 2.

I am not sure if this helps in any why.

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## liana@avatoria.co.za

Dave - Please Help

I did a stock take end of February and after it was updated on Pastel we checked the pastel Inventory quantities 3 times.  March came and gone without 1 single problem – But since April it went downhill!!!  Each and every month end I have stock loss like you won’t believe!  I went back and checked all my Supplier Invoices and Credit Notes as well as on the customer side.  The quantities on Pastel  match the mentioned documents 100%.  I don’t use the function for negative quantities – Is there anything else I’m missing?

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## Dave A

*If* it's a Pastel problem, we'll need someone familiar with Pastel to jump in here.

But the impression I'm getting is what you are experiencing is a unit count problem rather than a valuation problem. Would that be right, Liana?

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## Mike C

Hi liana - I am not too clued up on Pastel's Inventory side (Neville will have to help here) but if everything is matching up on the document might it not be that someone has found a way of helping themselves to your goods?

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## liana@avatoria.co.za

Thanks for the response Dave.

I really don’t know what the problem is, but it can’t be a count problem as we double and triple check every single item that we receive and that is sent out to customers.  Still the physical quantities never match the quantities on Pastel.

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## liana@avatoria.co.za

Thanks for the response Mike

That is what I’m thinking as well, but I need to assure that there’s nothing I’m missing on Pastel before I start procedures with my personnel – I’m still hoping and praying that something is going wrong on Pastel.

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## Dave A

> I’m still hoping and praying that something is going wrong on Pastel.


Pick an item and produce a detailed report of all the stock movements.

If it matches actual receipts and sales, there's only one option left - stuff is leaving without being billed.

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## Mike C

Yep I agree with Dave.  Otherwise choose one item (the item that shows the heaviest losses) and do a daily inventory for a week or so.

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## Justloadit

If pilfering is taking place, that item you will be checking will tally when you do the daily stock take.
Do the checking after working hours.

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## liana@avatoria.co.za

Thank you everybody - I've been doing all of the above for almost 2 months now.  My Inventory at this stage consists of 9493 items so it's been hectic (Living on Red Bull at this stage).  Guess it's time to face the facts!

Thanks again - I had to make sure!!!

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