@Tut,
Okay I have found it, but now I am not sure how this will work.
Is this going to solve my problem about the Cost of Goods Sold in order to allocate it under Direct Expenses.
Currently I have to write off the Inventory under Inventory Write Offs.
This was the initial problem.
If this is so, How am I going to make use of this setting (Custom Fields) to do that?
Please advise.
As I’ve said twice before in this thread, @Kobus, I don’t use the inventory module, so I don’t know the answer to your question. I was only pointing out where to find custom fields setting.
@lubos @tut I think you guys didn’t get what I said. So let me explain again.
Due to the current limitation in Manager, Cost of Goods Sold expenses like shipping, import tax and clearing charges cannot be entered into Purchase Invoice separately - which has been discussed in previous messages of this thread. So manually I have to calculate the COGS in Excel and enter the final value in the PI for each item, to get the correct item cost. That part is very clear, until you guys come up with a development, which I hope would happpen soon. 
Now comes to my question - how do I pay for the supplier (Product Cost + Shipping) in US$ and the Import Tax and Clearing Charges to local parties in local currency Rf.
From what I have seen it can either be paid through my $ bank account OR Rf bank account, but not from both. If so my bank accounts won’t reconcile, because the actual payments would be made separately from both the $ and Rf account to the respective parties.
I hope it’s clear now. Please let me know.
Thanks
No, the feature you are waiting for is called Custom control accounts and this hasn’t been released yet. Custom fields are for something else.
@nineone, let’s take it step by step, how many invoices did you receive? One from USD supplier, one from customs authority, one from clearing agent? That’s three invoices, correct?
@lubos yes, that’s correct. And all those invoices are related to the items purchased making those cost of goods sold.
And have you created those three purchase invoices in Manager? Keep in mind, since those three invoices are issued by three different suppliers, that’s how it should be entered in Manager too. Three suppliers, three purchase invoices.
The challenge is if you are buying an inventory item, how to capitalize clearing charges against specific inventory item without increasing its quantity. Correct?
@nineone convert the other currency to your base currency and work with. Put a note in the description field with regards to the exchange rate.
@Lubos some accounting application have an option of entering additional expenses on an invoice. Expenses under the additional expenses category on the invoice are not posted into different accounts but are summed up and spread on the inventory on the invoice to increase the per unit cost of the inventory to reflect the real cost of the inventory. These are usually excise, clearing and other carriage inward costs. These expenses are different from other services/expenses not related to the delivery of the inventory which we may also be billed for on the same invoice.
The same applies to the procurement of fixed asset and intangible asset because all expenses incurred in bringing the asset to place and preparing the asset for use must be capitalised as part of the fixed asset/assets cost.
Implementing this in Manager.io will require a field where we can add lines to account for other expenses which will be spread on the inventory being purchased. The invoice will also have to change to show the details of additional expenses. It an accounting standard requirement both for IFRS and FASB users.
If your business is a small business and doesn’t involve a lot of transactions, you can do manual calculations and add the cost to the invoiced inventory cost and put a note in the “internal information” field or the general description field.
@lubos that’s correct. Because if I make separate invoices it will be in an expense account but not as COGS right?
And if I manually spread these costs to PI of the supplier, it’ll again be wrong. Because I didn’t pay those Customs charges and clearing charges to the supplier. And I didn’t pay them in US$ either.
So what’s the best way to do this now? Pls help. Since I’m using Manager, this has to be done with the current limitations. So what can be done?
Currency conversion is not the issue.
The issue is these expenses are not expenses but costs associated with the inventory item. So it has to reflect in item cost and in that Purchase Invoice. But if you select a supplier you have to make payment to the supplier for the COGS expenses you paid locally in local currency.
@lubos
Thank uou
I agree, if the supplier is not billing you for those extra expenses then it will incorrectly raise account payable to the supplier.
You may have to use journal entries. You will do the following.
Dt: inventory on Hand 1,165 (200+465+500)
Ct: Account Payable 200
Ct: Import Tax 465
Ct: Shipping Ex 500
(Assuming $150 = Rf200)
You can use different bank account to settle the individual liabilities now.
Let me make it clearer
Debit: Inventory item 1,165 (200+465+500)
Credit: Account payable(Supplier) 200
Credit Import Tax Liability Account 465
Credit Shipping Expense liability account 500
What you are doing here is capitalising the expenses to the inventory item cost.
Now you wont have problem paying the supplier or paying the other expenses.
@nineone give me a few days to fix this. There is a limitation where it’s not possible to add cost to inventory item without increasing quantity on purchase invoice. You can’t set quantity to zero because then line total will be zero and you don’t want to set quantity to 1 because you just want to add the cost without adding quantity.
The only workaround you can do is to allocate the cost to some expense account first, then make a journal entry to credit expense and debit Inventory on hand. Journal entry doesn’t have the limitation purchase invoices have.
The workaround I used is to add one more cost to inventory with the value zero and set quantity to -1 .
Eg:
Inventory(Bag) $100 per unit, Quantity:2
Shipping(In) $8 per unit, Quantity:1
Shipping(In) $0 per unit, Quantity: -1
Hence, nett is Quantity: 2 at total of $108 for that inventory(Bag)
In the latest version (16.1.50), you can now allocate cost to inventory item without increasing quantity when recording purchase invoices.
What you do in this case is simply not enter anything to Qty column.
thanks @lubos will check it out…
Also, would this solve the issue of supplier products being in one currency and the clearing charges, duty charges etc being in another currency?
This was never an issue. You simply have two purchase invoices and two suppliers in two different currencies.