I am new with this software, although I have worked with other accounting software before.
How do we create these accounts in Manager?
Always check the Guides first for any question. In this case, read about account setup at Manager Cloud.
In case of cost of goods sold account, Manager will create this account automatically when you enable Inventory Items tab as this is a control account.
You will need to set up your multi step income statement to report cost of goods sold and the gross profit on sales. See guides - Manager Cloud.
Thank you Lubos. I suppose this is to control the stock., but not necessarily to show on the income statement. Am I correct?
Tony, Lubos &Tut,
I have opened the Multi Step Income Statement in Businesses/settings/multi-step income statement and noticed “Direct Expenses”. Is that not supposed to be as I know it the Cost of Goods account?
If it is, How do I create it. “Guides” does not explain how to create this specific account.
Cost of goods sold (or Inventory - purchases as Manager calls it although you can rename it) is an expense account and thus must show on your income statement (aka Profit & Loss Statement)
Don’t worry about multi-step income statement option. This is for setting up specific layout for single report. I don’t think that’s what you were asking.
Thank you Lubos. I am going to try it
i dont see Inventory - purchases i see Inventory - cost is that it? not sure where to enter cost of goods sold im running a service business and when i buy parts where do i enter them most of them are used and not kept in inventory
I would use billable expenses or just account for them as supplies. Local law may have influence on the approach, detailing just what can be counted as an expendable supply versus inventory.
@kens if you are mainly buying parts for immediate use and are not carrying inventory then I suggest that you ignore the cost of goods sold as this usually relates to Inventory.
Now for your services do you quote or do & charge.
If you quote you could create an expense account called “Spare Parts Purchased” and place all costs there. If you have different types of spare parts that you would like to track open separate accounts.
If you do & charge you have two options - the basic version is to operate a job card in which you record the parts used with their costs. When you come to invoice the service add up the spare parts used, add any margin and enter on the sales invoices. For the spare parts purchased do exactly the same as for quotes, use the purchases account.
The 2nd option is much more computer intensive by using the Billable Items feature - I suggest you read the guides for that but in summary the purchases are entered as billable items, then when you invoice you select the billable item and it transfered to the purchases account at the same time you add a margin and this variation is posted to income control account.
The 2nd option “maybe” of value for those services requiring detailed breakdown of the spare parts used on Invoice, alternatively just do individual line items from the job card.