Proper Valuation of Digital content

Owned by Mary Volkmer (Unlicensed)
Last updated: Dec 12, 2019

As sales records that include Digital content are posted in Manual Sales, digital sales and refunds WILL affect stock on hand. Digital sales will decrease stock on hand and refunds will increase stock on hand. Since digital content are not a physical item, the stock on hand starts at ZERO and will go into a negative number when sold at the POS Register.


Posted digital sales and refunds will be included in:

  1. The <F9> Sales History report.
  2. Stock Adjustments
  3. All posted sales reports.
  4. The stock ledger Sales, Sales Returns and Sales Discount reports.
  5. The stock ledger spreadsheet's Sales, Sale Returns and Sale Discounts calculations.
  6. General Ledger entries.

Since digital content are not physical items, in that no stock is actually carried within the store, certain steps must be taken in order to ensure proper valuation of these items in the stock ledger, and a proper calculation for cost of goods sold.

To properly value Digital content:

  1. Add the digital item to a course request.
  2. Work the Order Decision for this digital item (so each Order Decision record is in a "Worked" status).
  3. Create a new item in Item Maintenance called an "OPEN PO ITEM." This will be the item you use to keep a purchase order open. This OPEN PO ITEM will have $0 cost and $0 retail.
  4. Create a new Purchase Order and add the OPEN PO ITEM to the PO.
  5. Add each of your digital books to that PO with a requested qty that matches the order decision for that digital book.
  6. Post the PO (so it is in an OPEN status).
  7. Sell the item(s) at POS by the proper SKU.
  8. At the end of each month, look at the stock on hand of each digital book and receive any negative stock on hand, so that the stock on hand of each item is back to zero. In other words, if one item is currently at –60 stock on hand, you will need to receive 60 of this item on the PO so the stock on hand offsets back to zero.
  9. Close your sales month normally and run inventory variance.
  10. When the invoice(s) come in, you will be paying for how many you sold. You can enter the invoice against the PO you received on.
  11. At the end of each term, you will also want to cancel the OPEN PO item on the PO so it will close. At that point, you will create a new PO using the new term information (adding the Digital content attached to the new term).