How to record entries and exits in the kardex

How to record entries and exits in the kardex

In a tidy storeroom everything looks under control, but the truth about inventory is not on the shelves: it is in the records. The kardex summarizes, for each product, its stock entry and exit movements with date, quantity, origin and cost. If those movements are recorded wrongly or late, the business does not know how many units it has or what they are worth. This article explains what an entry is, what an exit is, and how to record them correctly in Kardex Tauro, the inventory program for small businesses.

What is an entry in the kardex

An entry is any movement that increases the stock of a product. The most common ones are purchases from suppliers, but customer returns, surplus from a physical count and the opening balance with which the business starts its operation also bring merchandise in. When an entry is recorded, the kardex adds the units to the previous balance, includes their value and keeps a record of the supporting document. In Kardex Tauro that addition is known as Más Kardex: it is the operation that adds units and value to the product.

What is an exit in the kardex

An exit is any movement that decreases stock. The typical exit is a sale to a customer, but spoilage from expiry or breakage, internal consumption, returns to suppliers and transfers to another warehouse also take merchandise out. When it is recorded, the kardex subtracts the units from the balance and calculates how much what left the warehouse cost, almost always using the product's average cost. In Kardex Tauro that subtraction is called Menos Kardex. Recording exits on time avoids the most common problem of small businesses: believing there is merchandise that was actually sold or damaged long ago.

How to record an entry from a purchase

The cleanest way to record an entry is to let the purchase itself generate it. When you register the purchase invoice in Kardex Tauro, the program automatically creates the Más Kardex movement with the units and the value on the invoice, with no one having to type it by hand. The entry updates the product balance and recalculates the average cost, mixing what the units already in the warehouse cost with what the newly purchased ones cost. The practical rule is simple: if the merchandise arrived through a purchase, the entry is born from the purchase invoice, not from a loose handwritten note.

Manual entries: opening balance and surplus

Not every entry is born from a purchase. When a business starts using the program, the merchandise it already has in the warehouse is loaded as an opening balance through a manual entry: the manual entry window (Más Kardex) is opened, the reference, quantity and cost per unit are typed in, and the opening balance report supports it. The same happens when a physical count finds more units than those recorded: the surplus is added through a manual entry backed by the count report. That manual entry window exists precisely for adjustments that increase stock and do not come from a purchase invoice.

How to record an exit from a sale

Just as the purchase generates the entry, the sale generates the exit. When you finalize a sales invoice in Kardex Tauro, the program automatically deducts the merchandise from the kardex: the units leave the balance and the cost of the sale is calculated using the average cost at that moment. The program balance then reflects the merchandise truly available after each sale. If the sale is written into the kardex by hand and separately from the invoice, the same product may be deducted twice.

Manual exits: spoilage, breakage and consumption

Some merchandise leaves the warehouse without a sales invoice: a package that broke, a batch that expired, product that spilled or was used inside the business itself. Those exits must also be recorded in the kardex, or the program will keep showing units that no longer exist. To record them, use the manual exit window (Menos Kardex) or the Crear Merma option, which keeps the reason for the write-off documented: quantity, reference, cause and authorization. Recording the spoilage on time is much cheaper than discovering the shortage months later, with no idea where it was lost.

Returns, transfers and adjustments

Returns also have their place in the kardex, and their direction depends on who is returning. If a customer returns merchandise, it comes back to the warehouse and an entry that restores the units is recorded; the Crear Devolucion option keeps a record of the re-entry. If, on the contrary, the business returns merchandise to the supplier, the merchandise goes out and is recorded as an exit backed by the return note. And if the business runs more than one warehouse, the Crear Traslado option lets you move merchandise from one place to another while keeping the movement recorded. The following table summarizes which document generates each typical movement:

Worked example: six movements of a single product

The best way to understand how entries and exits are recorded is to follow a real case. A store controls powdered detergent by one-kilo bag, with a cost per unit. Over ten days the product goes through six movements:

• Day 1: the store opens with 20 bags at a cost of $8,000 each. The opening balance is recorded as a manual entry backed by the report. Balance: 20 bags.
• Day 3: 30 bags are purchased at $8,400. The invoice generates the automatic entry and the average cost is recalculated: (20 x $8,000 + 30 x $8,400) divided by 50 units gives $8,240 per bag. Balance: 50 bags.
• Day 5: 12 bags are sold. The sales invoice generates the automatic exit of 12 units at $8,240, for a cost of sale of $98,880. Balance: 38 bags.
• Day 7: 2 broken bags are found. Using the Crear Merma option, the exit is recorded and the reason stays documented. Balance: 36 bags.
• Day 9: a customer returns 1 bag from the Day 5 sale. Using Crear Devolucion, the entry that restores the unit is recorded. Balance: 37 bags.
• Day 10: the physical count finds 3 extra bags. The surplus is added through a manual entry documented in the count report. Balance: 40 bags.

The product's kardex looks like this:

At the end of the period the store knows three things for certain: it has 40 bags valued at $8,240 each and an inventory worth $329,600. None of those figures was guessed: all of them come from documented movements. If the real balance in the physical count had been different, the next step would be an adjustment with its report, never a silent correction of the kardex.

Best practices for recording entries and exits

Recording a movement takes less than a minute; explaining a shortage can take weeks. To keep the kardex a reliable source:

• Every movement must have its document: purchase or sales invoice, inventory report, count report, spoilage form or return note. A kardex without a document is not a record: it is a rumor.
• Record entries and exits on the same day they happen. A kardex updated once a week tells a story that nobody remembers well.
• Never add or subtract merchandise directly over the balance. Always use the entry or the exit with its concept, so the reason for the movement leaves a trail.
• Use the right program option for each case: purchase for purchase entries, Crear Merma for write-offs from damage or expiry, Crear Devolucion for returns and Crear Traslado for movements between warehouses. Each option leaves the movement with the correct label.
• Compare the kardex with the physical count periodically, and adjust only what the count proves, always with a report.
• Assign a single person responsible for recording movements and train that person on the difference between Más Kardex and Menos Kardex. A wrong click multiplies across every report of the month.

Entries and exits are the pulse of inventory: every purchase that arrives, every sale that leaves, every spoilage and every return must be recorded with its document. When that habit becomes routine, the program balance starts matching the real warehouse, and purchases are decided on data rather than hunches.