Negative balances in the warehouse: how they arise and how to remove them

Where do negative balances come from?

Negative balances in Torgsoft appear when a product is already being sold but has not yet been posted in the program. This most often happens in stores where goods receipt and sales take place at the same time. This mode allows trading to continue, but it distorts cost, profit, and analytics, so negative balances must be detected and balanced in time.

For the program to allow the cashier to perform such an operation, in the settings (Settings — Parameters — Accounting), in the field "What to do if there is not enough product in stock during sale", the option "Allow sale into negative balance" must be selected. As a result, a negative quantity of the sold product is recorded in the warehouse, and it becomes necessary to post the missing quantity later.

How sale into negative balance affects cost and profit

Permission to sell into negative balance has critical consequences for business financial analytics because it distorts cost and profit indicators:

• Zero cost: if a product is sold into negative balance, the program does not know its purchase price because there is no goods receipt invoice yet. Therefore, in the "Expense List" form, the "Cost by receipt" value for this product will be 0.00.

• Profit distortion: since the cost of such a sale is zero, the sale of this product will not affect the total "Cost of sales" value in the "Summary Report for the Period". As a result, the entire amount received from the customer for this product will be considered net profit, which artificially and incorrectly overstates your business profitability indicators.

• Problems with invoices: if a goods receipt invoice for the product is posted after it has already been sold into negative balance, this will lead to analytical discrepancies. For example, the invoice amount may not equal the cost of the invoice itself.

How to balance stock through an inventory count sheet

To correct negative values in the warehouse and restore order in financial analytics, you need to conduct an inventory count of negative balances. This can be done using the following algorithm:

1. Searching for products with negative balances. Go to the menu item "Warehouse" -> "Inventory Status". In the product status filter, select the parameter "Only with negative quantity".

2. Creating a sheet. Select the found products with negative balances and add them to a new inventory count sheet to balance the quantity to zero or to the actual available quantity.

3. Entering the actual quantity. Open the created sheet and specify the actual quantity of the product in the warehouse. If the product is physically absent, enter "0".

4. Closing the sheet. After clicking the "Close sheet" button, the program will automatically create an inventory receipt document for the quantity of product that was missing to cover the negative balance.

5. Price formation. In the created inventory receipt, the product price will be set automatically — it will be equal to the last calculated purchase cost of this product: purchase price + additional product cost.