In Megaventory, we take keeping track of every movement of the inventory very seriously. We believe that without this, an inventory and supply chain management system would lack value. However, we know that there are situations in which the original document is invalid or the dates are off. This is when backdating comes in handy! A feature that gives you flexibility while not losing track of the processes and documents.
What Is Backdating?
You may be asking yourself, but what is backdating? It is just dating a document with an earlier date than its actual date of execution. This might not be allowed, or not even legal, especially when it comes to legal documents such as contracts. However, in day-to-day business scenarios, there are many cases when backdating is necessary.
These are some common situations in which you might find it helpful:
- When among all documents required when recording sales, purchases, inventories, etc. an invoice ends up not being issued without any dishonesty intended.
- When for instance, a vendor supplies a product under a contract and later discovers that the customer didn’t sign it. In this case, a contract with the date of the supply is more valid than inserting the actual date of execution.
- When a substitute document is needed because the original has been lost or destroyed. In this situation, the backdating of the document may be agreed upon by both parties.
- When you are first starting to use Megaventory, and you want to record some bills and invoices on their real date.
Backdating Feature In Megaventory
The backdating capability that Megaventory provides enables any document that is being created to have its date set in the past (at a maximum of 180 days or 6 months).On a date prior to the new document’s issuance date, an existing document may be revoked and replaced. Both the freshly issued document and the canceled document receive a document number for tracking purposes.
To correctly use the backdating feature in Megaventory, there are some things you should consider:
- If you want to make a change in your stock level, Megaventory will check what your final stock will be. If you end up with negative physical stock at any point in time, even in the past, Megaventory will not let you create a new document. So, keep in mind that you must always keep a 0 or positive quantity for a product through your timeline.
- If you want to push back a purchase invoice, you need to keep in mind that it will also affect the cost of the items involved since the current unit cost of a product changes according to the Old Quantity x Old Unit Cost, and the New Quantity x New Unit Cost. This weighted average cost method will trigger a change in the cost since the Old Quantity will be modified by backdating a document. In this case, you should check with your accountant and/or lawyer for local regulations on how to handle this.
As simple as it sounds, backdating is a very useful feature! Fix the date of the invoice you neglected to issue on time, enjoying maximum flexibility while being able to map and follow what actually happened in Megaventory!
How to backdate invoices
After understanding what backdating is all about, it’s time to put it into practice.
The backdating feature in Megaventory works the following way:
Instead of changing the date of a current document, said the document will have to be canceled and a new one created on its behalf, with the desired prior date. This will allow us not only to use this feature in a more conscious way but also for tracking purposes since both documents will have a document number.
You can check out the documents that allow backdating here.
Create your new document > Approve > Choose the warehouse > Receive, and edit the issue date as shown below. Click on create a document and you will be done!
We hope you find both this feature and this article helpful! If you still haven’t done so, create a free trial on Megaventory or book a free screen-sharing demo with us to check out backdating and many more features!