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Manufacturing accounting for Belgium and France

Written by Pieter Hamans on . Posted in Exact Online

In Belgium and France companies apply the perpetual or non-perpetual inventory method. These are methods of logistics bookkeeping that differ from the practice in the US, UK and most continental European legislations. Exact Online supports the perpetual and non-perpetual inventory methods in the Wholesale Distribution and Manufacturing solutions.

The ability to choose an inventory accounting method depends on the applied legislation. In the US, the UK, Germany and the Netherlands, no choice of method is possible (the aplied method is called Anglo-Saxon). In Belgium, we can choose between Anglo-Saxon, Perpetual and Non-perpetual inventory, in France only between Perpetual and Non-perpetual inventory.

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Perpetual inventory

The perpetual inventory method updates with each inventory transaction (such as receipts and issues) both the inventory count as well as the inventory value on the balance sheet. The perpetual method requires a ‘Purchase account’ and a ‘Stock change’ account on the income statement. These accounts can be specified on the Item group level.

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When materials are issued, the ‘Work-in-progress’ (WIP) is debited against a ‘Work-in-progress change’ account on the income statement. The reverse is applied to receipts of products.

Non-perpetual inventory

With non-perpetual inventory, with each inventory transaction only the stock count gets updated. No entries are made on the inventory accounts on the balance sheet. The inventory is updated from time-to-time based on stock counts and ad-hoc valuations. With non-perpetual inventory, a setting is present to choose between using a WIP account, or not.

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Inventory valuation method

Though strictly an unrelated topic, it is mentioned here that both under perpetual and non-perpetual inventory, we still can choose whether we apply standard costing or average costing. (See also Average Costing for Wholesale Distribution and Manufacturing).

The perpetual and non-perpetual inventory method is general available in Belgium, and in controlled release in France, for all types of Wholesale Distribution and Manufacturing solutions. The average costing inventory valuation is in controlled release in Belgium and France and will become general available in (early) Q1 2015 for all types of Wholesale Distribution and Manufacturing solutions.

More information with Pieter Hamans (pieter.hamans@exact.com).

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