How Stock Movements Hit the Books

Stock is not just quantities on a shelf — it is money sitting in your store, and the accounts have to say so. Veona runs perpetual inventory: the moment a movement is posted, it also posts a matching pair of accounting lines, so the value of stock on the Balance Sheet (the statement of what the business owns and owes) always equals the value of the lots actually on hand. Nobody has to “do the inventory accounting” at month-end — it has already happened, one movement at a time. This page explains exactly which accounts move when, in plain language.

Who / when: the store manager drives the stock movements (receiving, issuing, counting), and the finance officer reconciles the result against the books. The store manager does not need to think about debits and credits — Veona posts them. The finance officer reads this page to understand where each figure on the Balance Sheet and the Income Statement (the profit-and-loss statement) came from. We will follow Ngozi, a store manager, and Tunde, the finance officer who closes the books.

A few terms, defined once. The general ledger is the single master list of every accounting entry the business has ever made — one set of books behind the whole hospital. Every entry is double-entry: it moves at least two accounts, a debit (Dr) on one side and an equal credit (Cr) on the other, and the two always net to zero. Stock-in-Hand is the asset account that holds the money value of inventory you own. GRNI stands for Goods Received Not Invoiced — a holding account for goods you have physically received but not yet been billed for. COGS is Cost of Goods Sold — the expense account that records the cost of stock once it is actually used or sold.

A goods receipt brings value in

When Ngozi receives stock against a supplier on Stock → Goods Receipt, the value of the goods enters the books:

Dr Stock-in-Hand / Cr GRNI — stock value goes up (an asset), and a matching amount sits in GRNI awaiting the supplier’s invoice.

In plain English: you now own this stock (so the asset rises), and you owe someone for it, but until the bill arrives that liability waits in GRNI rather than in Accounts Payable. GRNI is the hinge between the store and the finance office — it is explained end to end in The Receive → Invoice → Pay Chain.

Note

The receipt posts at the accepted value — quantity received times unit cost. The quantity side and the value side are the same event: on-hand goes up and Stock-in-Hand goes up by the same money, so the shelf and the ledger never disagree.

Landed cost capitalises freight into the lot

If freight, duty or clearing charges apply to a shipment, Veona can fold those onto the receipt as a landed cost. Rather than expensing the freight separately, it is capitalised — added to the carrying value of the lots themselves, so each unit’s cost reflects what it truly cost to get it onto your shelf. That higher per-unit cost is then what flows to COGS when the stock is used. Landed costs and supplier returns are driven from the procurement side — see Apply Landed Costs and Process a Goods Return.

Issuing, dispensing or consuming stock turns it into cost

When stock genuinely leaves to be used — a material issue to a ward, a pharmacist dispensing, a reagent drawn at the lab bench — its cost moves out of the asset and becomes an expense:

Dr COGS / Cr Stock-in-Hand — the cost of what was used becomes an expense, and the stock asset falls by the same amount.

This is the heart of perpetual inventory: the day you use stock is the day its cost hits the Income Statement, not before. The pages that consume stock post this automatically — dispensing in Dispense and Decrement One Inventory, and reagent draw-down in Draw Down Lab Reagents From Stock.

Caution

For pharmacy dispensing there is a deliberate split in timing. COGS posts immediately on dispense (the cost is real the moment the drug leaves the shelf), but the revenue for that drug is recognised when the bill is issued, not at the dispense moment — see How Billing Hits the Books. The two legs are correct individually; they simply do not always land in the same instant.

Wastage and expiry post a loss

When stock is written off — expired, broken, spoiled — there is no sale behind it, so the cost goes to a loss account rather than to COGS:

Dr Inventory Loss / Cr Stock-in-Hand — the lost value becomes an expense (a loss), and the stock asset falls.

Tunde reads the Inventory Loss line as exactly that: stock that was paid for but never earned anything. Recording wastage honestly is what keeps the asset value truthful.

A count adjustment corrects both directions

When a physical count on Stock → Stock Take differs from the system, Veona posts the difference so the books match reality:

• A shortage (counted less than the system says) posts Dr Inventory Loss / Cr Stock-in-Hand — shrinkage is a loss, the same shape as wastage.
• An overage (counted more than the system says) posts Dr Stock-in-Hand / Cr Inventory Gain — the asset rises and the gain is recorded.

Either way, after the adjustment posts, on-hand and Stock-in-Hand agree again.

Note

A transfer between your own locations is value-neutral — stock leaves one store and lands in another, but the business owns exactly the same total value, so Veona posts no general-ledger entry for it. Only movements that change total value (receipt, consumption, loss, gain) touch the books.

What happens next

Because every movement posts as it happens, Tunde never has to “value the inventory” manually. The Stock-in-Hand figure on the Balance Sheet is live, and he can drill any unexpected balance straight down to the receipts, issues, write-offs and adjustments behind it — see Read the General Ledger and Drill Any Account. The COGS and Inventory Loss lines on the Income Statement tell the rest of the story: what stock was earned against, and what was simply lost.

Caution

The general-ledger posts are best-effort. If a required Finance account (Stock-in-Hand, GRNI, COGS, Inventory Loss or Inventory Gain) is not mapped for the facility, Veona records the stock movement normally but silently skips that one posting rather than failing the operation. The fix is one-time: an administrator maps the accounts under Finance & Ledger → Finance Settings before relying on the figures. Until they are mapped, the quantities are always correct but the value lines may be incomplete.

Follow the trail

• Related: The Receive → Invoice → Pay Chain · Keep a Signed Stock Movement Ledger · One Set of Books — How Money Moves Through Veona · Read the General Ledger and Drill Any Account · Configure Finance Settings and Account Mappings