• Selling an item while there were no units in stock (zero Quantity on Hand) in the program
• An item setup as a stock item that should not be
• A purchase was entered for an item (setup as a Stock class item) which is typically sold or invoiced but not generally purchased

Note: For hands-on instruction on inventory costing methods, see Setting up and managing inventory training. Sage 50—U.S. Edition calculates the cost of an item based on the purchase cost and costing method at the time of the sale. If you sell more items than you have in stock, the purchase cost of the items not yet in stock will be missing. Sage must estimate the cost of those items sold. See the following example:

1. You purchase 100 units of a stock item at a cost of $1.00 each.
2. You sell 150 units of the item, causing the quantity-on-hand to drop to negative 50. Even though there are only 100 units on hand, Sage 50 calculates the cost for all 150 items using the existing cost information of $1.00 per unit.
3. Next you replenish your inventory by purchasing 200 units of the item at $1.50 each.
4. Sage 50 will now need to adjust the cost of the previously sold 50 units by 50 cents per unit to bring the total cost up to $1.50 per unit. As a result, a SYSCOST adjustment in the amount of $25.00 (50 units x .50) will be generated.

Sage is accurately posting cost information in the absence of purchase cost information. These adjustments cannot be deleted from the General Ledger because they are system-generated entries. However, you can eliminate these entries from the General Ledger by creating an environment in which the adjustments are not needed. In order to determine which items are being affected by the SYSCOST entry, clear the box on the General Ledger reports for Shorten Description.

Option 1: Adjust purchase date

1. Click Reports, Inventory, Item Costing Report.
2. In the Item Costing Report window, click the Options icon. Select an item ID that has SYSCOST adjustments. The report will show exactly when the SYSCOST entries were made. The entries should correspond to an invoice or sales entry.
3. On the Item Costing Report, find the purchase made immediately before the SYSCOST adjustment. Double-click on the transaction to drill down to it.
4. Edit the date of the purchase invoice so that the transaction is dated prior to the sale of the item. Doing this will place the purchase or inventory increase transaction before the sale date. Click Save.
   
   Note: Changing the date of the purchase invoice will affect the purchase invoice aging and due dates.
5. If using Batch Posting method, go to Tasks, System, Post and click OK to post all journals.
6. Run the General Ledger report in the period which had the SYSCOST adjustment to verify that it has been eliminated. If there are more SYSCOST adjustments, repeat these steps for each one.

Option 2: Adjust Quantity with Inventory Adjustment

1. Click Reports & Forms, Inventory.
2. Select the Inventory Stock Status Report.
3. Click Options.
4. Set the As of period to the same period in which the syscost adjustment occurs.
5. Click OK.
6. Note the Item ID of each item that has a negative Qty on Hand, as well as the quantity.
7. Close the report and Select a Report or Form.
8. Click Tasks, Inventory Adjustments.
9. Select the Item ID for the first item with negative Qty on Hand.
10. If desired, enter a Reference.
11. Set the Date to be prior to the sale that put the item into negative quantity.
12. In Adjust quantity by, enter a positive quantity that will be enough to make the Qty on Hand, at minimum, zero at the end of the month; for example, if the Inventory Stock Status Report quantity on hand was -7, enter at least 7.
13. Click Save.
14. Repeat Steps 9-13 for additional items as needed.
15. Once the quantity has been adjusted, the syscost adjustments will be removed from the general ledger automatically.

Option 3: Item should not be set to a Stock class

If an item should not be maintained as a stock item and is typically invoiced, but not purchased and quantity on hand and cost of goods should not be tracked for it:

1. Change the Item ID of the item in the system (ex. Old-PartName) using the Change ID button in Maintain, Inventory Items.
2. Create a new Item in the system using the original Item ID of the part, and select an Item Class other than a class of Stock, Serialized Stock, Assembly, Serialized Assembly, Master Stock.
3. Locate the purchase of the item in the program; It will indicate the changed Item ID from step 1.
4. Replace the Item ID on the purchase with the Item ID created using the new item class.
   Note: If there is a payment or purchase order, you will need to remove all the associated transactions starting with the last entry and recreate them again.
5. Confirm the System Cost Adjustment is no longer in the system.

Note: Please consult your accountant regarding adjustments for the quantity on hand of the renamed part.