Setting Up Location Accounting

Location accounting is an accounting method that captures and records material movement within the warehouse, providing accounting visibility based on where the inventory resides.

You can designate certain storage areas as containing raw material, WIP, inspection, or finished goods by assigning the corresponding ChartFields to the storage area. All inventory locations in a storage area use that storage area's accounts. As each inventory movement occurs, the Accounting Line Creation process looks at the accounts associated with each storage area to determine which accounts to debit and credit. For example, when inventory is shipped to a customer, the system credits the storage area from which the inventory is shipped.

Note: To use location accounting, you must select the Location Accounting Required option on the Inventory Options page when you define the business unit, and you must establish ChartFields for each storage area on the Storage Area Accounting page before processing inventory transactions.