I’m having a problem with understanding how inventory works. I have a seasonal business where I sell plants every spring. When the plants are transplanted into pots ready for sale I count that as 1 inventory item. When I add the items into Manager I also add how many of each variety I have in stock for sale. Over the years the inventory has somehow gotten all messed up and I’m running in the negative. When I try to take it back to zero the count just keeps getting worse. I’m sure this is very basic to understand but I’m not getting it. I want to clear all inventory. How do I do that? I’ve read the guide lines but I’m not understanding that either. I thank you for any help you can give this 77 year old.
What did you use to record the inventory transactions - purchase invoices, sales invoices, production orders, delivery notes, goods received notes, …?
If you could show an edit example of each transaction that would help to clarify how you managed your inventory
I use Sales Invoices. I’m not sure what you mean by showing an edit example of each transaction.
A Sales Invoice will reduce your inventory - I was wondering how you increased your inventory?
if you are using Windows, then the Windows Snipping Tool can capture any image on your screen and then you can copy it to the forum so that we can see what is in your transaction
This is all messed up because I was trying to manually take it back to zero inventory so it does not give you an accurate picture. It’s a mess.
You should use production orders to add potted plants to inventory. The details will depend on whether you buy your raw plants, grow them from seed, etc.
Exactly how do you do this?
How are you trying to “take it back to zero?”
You wrote that you have “read the guide lines.” But which Guides did you read? Have you read the 3-part series on inventory management? It begins here: https://www.manager.io/guides/11111. Fundamentally, inventory management is simple:
- An inventory item is created in the Inventory Items tab. But this is only a definition with information about the item, unless you are migrating to Manager from another accounting system, when you must also enter starting balance information.
- Units of an inventory item are added to inventory using a Payment, Purchase Invoice, Production Order, or Expense Claim (rarely), followed up by a goods receipt if you are using that option. (Goods receipts separate the financial aspect of tracking inventory from the quantitative aspect.)
- Units of an inventory item are subtracted from inventory using a Receipt, Sales Invoice, or Inventory Write-off, followed up by a delivery note if you are using that option.
Manager keeps running balances of value and quantity for every inventory item and computes current average cost of items in stock to transfer to expenses when items are sold. It’s not clear from your posts whether you are doing all your accounting with Manager. If not, it is probably not worth the headache to try to manage inventory using Manager, because all these functions are interrelated. A simple spreadsheet would be easier.
Thank you for trying but this is all Greek to me. I guess I will have to forget using the inventory. Yes I have gone over the guides you mentioned but I do not understand them. I will look over what you have shared and see if I can make any sense of it. If I used the program all the time I might learn something but 2 months out of the year isn’t enough. Again thank you for your time.
Your first task should be to establish what you are trying to achieve.
Only then can you select the appropriate tool
So can you state clearly what you would like to keep track of, and what transactions you want to keep a record of
I really don’t know how to answer your question. I will try. Each spring I take orders for plants. It’s mostly the same customers but there’s always new ones. The different varieties have been put into “inventory items”. As the orders come in I do up a “Sales Invoice” and let it sit there until the plants are delivered and paid for. At that time I bring up the customer and their invoice and do up a receipt showing their order is paid. Because I take orders I know how many seeds I need to plant of each variety and I would like to keep track of that inventory. I have a very small basic hobby business but obviously I have been doing a lot of things incorrectly. I would like to fix that. I hope this answers some of your question.
No offense, @dori, but you are like a carpenter with a magnificent hammer who isn’t sure what a nail is for. Unless you understand the fundamental principles of double entry accounting, you will never understand what Manager does. I recommend spending some educational time at accountingcoach.com. It’s free, with great examples.
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Obviously the accounting workflow you use isn’t right. The other responses to your enquiry are trying to establish your workflow so they can see the problem.
I recommend, you write down the steps you do to add to your inventory and compare it with the guides provided by Manager.io.
It’s not a simple process because it’s accounting and depends on financial transactions.
For example, these are the ways to increase inventory quantity:
- Enter a positive quantity in the item’s Starting Balance (for the relavent accounting period).
- Create a Purchase Invoice with inventory items.
- Create a Credit Note (Customer Refund) with inventory items.
- Create a Production Order for the inventory item.
- Create a Journal Entry for the inventory item
That’s all I can think of at the moment. If you don’t use these methods then the inventory quantity won’t increase.
Your sales invoices will always decrease the inventory quantities.
A quick (and probably illegal) solution would be to to a stocktake and update the Starting Balance so the quantity on the Inventory Items page match your count. Determine the Average Value of the items and enter that too!
Then you MUST follow the correct accounting methods to amend stock quantity and value. (I’m sure someone is going to give me hell about this advice…)
My advice is since you said your customers makes order in advance this workflow below will solve issue:
- Raise sales order for the customers since the products is not on ground.
- Once the products is on ground receive it in by creating a purchase invoice or goods receipt depending on what you want to achieve
- create the sales invoice and reference the sales order number so that the sales order can be moved to sales invoice
- receive payment through sales receipt and specify the bank or cash account the payment for the products are going to.
With this above you will definitely get it right. Have a wonderful day ahead daddy