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A “Roll Forward” is an important concept that accountants use to reconcile balance sheets. Weekly Accounting extends the concept to all balance rowsets.
It's easiest to understand the concept of a roll forward when it relates to inventory levels.
An Inventory Roll Forward. As an example, imagine you have a store where you sell books. At the start of the month, you count how many books you have – let's say 100. This is your beginning inventory.
Now, throughout the month, you receive more books from suppliers, say 50 more books. This is your inventory addition.
During the same month, you sell some books. Let's say you sell 40 books. This is your inventory reduction.
At the end of the month, you count your books again, and you have 110 books. This is your ending inventory.
An inventory roll forward helps you understand this flow of inventory. It’s like a story that tells you where you started, what you added, what you sold (or used), and where you ended up. So, it looks something like this:
This process is crucial for businesses to keep track of their inventory accurately, understand their sales, and plan for future inventory needs. It’s a simple yet effective way to maintain control over stock levels.