I have read about the parent/child aspect of the custom income/expense accounts. I notice that when I have created a production order it doesn’t matter that my items are created from items which have been given their own custom expense accounts, the FG still has a costing account of ‘Inventory - Cost’. Is this a related issue or am I doing something wrong? I would really like the individual components of a production order to be costed off to their appropriate expense accounts and not agglomerated like this. Many thanks
You can’t do what you request.
A Production Order converts Raw Material Inventory into Finished Gods Inventory and therefore amalgamates the raw material costs to generate a finished goods cost - other words, only shifts values within the Inventory On Hand account.
As no sale has occurred during the production order process the raw material custom expense accounts aren’t relevant and therefore ignored. Only when the finished good is sold, does the costs shift to Inventory - Cost
OK yes I see that. Could the production order retain the expense accounts however - even if during its own process it ignores that data -, so that when sold they are then costed appropriately? An improved feature perhaps?
No, as once the PO has done the raw material to finished goods conversion its not referred to again
The finished good gets sold and is costed appropriately, the raw materials don’t get sold per se
I don’t see how the reversing of the PO process, so as to see raw material costs in the P&L, as an improvement.
PO’s can include non-inventory expenses in the finished goods cost - how do these get reversed / reported
well I’ll use my example but I’m sure this could be replicated for many other users;
EG; I sell a water harvesting tank complete with plumbing and pump. The costs to me are entirely different. Thus, to me, inventory-cost would be a group that is then sub-divided down into water harvesting equipment, literature and packaging - plus others. When I sell this kit some of it is equipment, some of it is literature and of course the box itself is packaging. These are all inventory items, yes, but I need to see the splits so that I can budget for each.
If that’s the result you want, then you should be using Inventory Kits (not production orders) as the sales item even though you may be “manufacturing” the product some time before selling it.
Go to Settings - Inventory Kit and create your product(s. This creates an Inventory Item which you would select on the sales invoice and then the components cost would go to their individual COGS account.
very many thanks for your time on this
and 100% agreed but then I am back with the problem of How to create stock from Production Kit. hmmm
I still think the best outcome would be to have inventory kits set up ready for either using direct in a sale or to someway be used to make up warehouse stock - in a scaled down version of the production order.
Maybe, maybe not
Its not a problem, you can’t create stock from Inventory kits.
You have to choices
- Create Finished Goods Inventory via Production Order and have single COGS account
- Create Finished Goods Sale Item via Inventory Kits and have multiple COGS accounts.
You can’t have both outcomes, so which is more important - knowing the Finished Goods Inventory or the cost analysis of the sales - your choice.
Inventory Kits “CAN’T” be used to make up warehouse stock.
OK - having used Manager for a while now I have to say it does almost everything I want it to. It is an excellent bit of software and perfect for my business. When I scale up, I can do, and it still isn’t as expensive as Sage or Mamut. Plus I can keep it on Linux-Ubuntu rather than having to migrate to Windoze. Plus, plus all the way and streets above anything else on Linux. The only thing for me is still this issue, that I would like to be able to create Stock Inventory and to have that Inventory separated off into separate costs (of goods sold) accounts. I know the current version cannot do this but is not feasible to build it into something for the future, say within the forthcoming BOM tools that are being written?
As already explained that is impossible.
Once you have amalgamated the raw materials costs into a finished goods cost, you can’t de-amalgamate those costs when the product is sold to separate cost of goods sold accounts. No accounting software will be able to do what you expect…
The forthcoming BOM is a stage before Productions Orders, so that won’t assist.
But that is achievable through the combination of Sage 50 and Adept BOM tools?
Thinking the process through what I assume Adept BOM does is consume individual items during the BOM stage and therefore create separate COGS before creating a brand new product which can be inventoried.