Can't bring up Inventory Cost in Payment screen

I’m sorry if I missed something but didn’t see anything like this in the forum.
I purchased a used piece of equipment to use as a trade-in for another customer. The trade-in value is actually set by the manufacturer and is based on a range of products.

The invoice to the customer is
TriCaster Mini 4K = $8995.00
Less Trade-in credit = -1800.00

The manufacturer gave me a discount on the product invoice to offset that trade-in credit. The customer getting the sale didn’t actually own a product to trade in but another customer just wanted to offload an old product and offered theirs. That customer is getting $200.00 for their unit.

I planned on simply sending them a check and using the Receipts/Payments area to apply that check to Inventory COGS. Unfortunately I don’t seem to have access to that expense account from within the Receipts/Payments area although I do have access to a secondary Inventory Cost account I set up for other items.

Do I have the main Inventory Cost account set up incorrectly or is that account just never going to be available from the Receipts/Payments area of the program?


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Your description of this merry-go-round transaction is confusing. It is not clear who you purchased the used equipment from or why or what you are actually doing with it. You’ve also mixed actions involving customers and a supplier. And just what you are doing with respect to the customer who wanted to unload the used equipment? Who did you plan to send a check to? Can you explain further?

Some questions can be answered. You will never be able to post a payment or receipt to the Inventory - cost account. Manager transfers the current average cost of inventory items sold from Inventory on hand to Inventory - cost automatically when a sale is recorded. No manual posting is possible.

This was probably a mistake, as there will not be a method for transferring the asset cost to that expense account.

You cannot set up that account. It is set up automatically when the Inventory Items tab is enabled and you have inventory items.

Just as an FYI, I was allowed to choose the secondary Inventory Cost account for the purchase through the Receipts/Payments tab.

I am sending a check to Customer B for $200 - this is the customer I purchased the used machine for trade-in from. That basically becomes a cost to me and in accounting terms would be deducted from the credit i received from the manufacturer for the trade-in.
i.e. Manufacturer sells main product and as a separate line item gives me a credit for trading in an older piece of equipment. There is, obviously a markup on the main equipment and the manufacturer also sets the amount of the trade-in I’m to give my customer for their new purchase. My credit from them is less than what they want me to credit the customer so there’s a ‘markup’ on the trade-in as well.
Normally the customer purchasing the new equipment (Customer A) is providing the used equipment so it’s a simple transaction. In this case Customer A didn’t own older equipment. To help out both customers, I purchased customer B’s equipment at a small price and used it to get the credit from the manufacturer for Customer B. Customer B doesn’t know this happened and putting it as a line item on their invoice would confuse them terribly. I’m eating the cost.

Thinking while typing I guess I’ll have to purchase the used equipment as an actual inventory item and then do a separate invoice showing it sold at no cost. Looks like that’s the only way to actually get the $200 to correctly go into COGS. I was hoping to not have to go through that extra step and have an inventory item in the system that I’ll never use again for any reason.

Am I missing another option?

Yes, you could put the $200 as a marketing expense or something similar, this way the old equipment passes from Customer B to the Manufacturer without the need for you to actually own it - transaction as an agent.

I agree with @Brucanna; there is little point in creating the used machine as an inventory item, since you do not intend to hold it for sale or production, and certainly will never have another exactly like it in the future. I suggest you look at this issue from the other end, not “How do I get the cost of the used machine into COGS?” but “How do I get the cost of the used machine into Inventory on hand before I sell the new machine?” Because that is really what you are doing. You are incurring an expense that raises the cost of the new machine you are selling to the new customer.

My suggestion is to treat the purchase price of the used machine the same way you would a freight-in cost for the new machine. See this Guide: You would enter a purchase transaction (either a purchase invoice or payment), posting the purchase cost of the used machine to the new machine inventory item with the quantity blank. (The blank quantity is very important.) This will raise the average cost of the new machine in Inventory on hand. Now, when you sell the new machine, a higher cost will be transferred to Inventory - cost.

Actually this has been just fixed a few days ago. Check the latest version. You can now use built-in inventory cost account from payment screen.

WOOHOO!! It really is there. Thank-you all for your answers and Thanks to whatever put the bug in the programmers head to add it - he must have known I was going to need it. :wink:

@KrisK, while the recent addition of Inventory - cost to available accounts for payments will accomplish what you want at the top account level, I urge you to consider doing things the way I suggested regardless. Why? Because if you do it as a direct payment, it will be lumped together with all other transactions, losing visibility of why it is there. If you add the cost of the used machine to that of the new machine while the latter is still in Inventory on hand, the extra cost will be posted automatically with the rest of the new machine’s cost as coming from the sale invoice. That will make the source of the expense more obvious and understandable, for you and any potential auditors.