Hi everyone,
I have a little complicated case.
We built an apartment building, after that we would like to add those apartments as inventory.
the issue is each of them has different size, which means different cost.
for example: the total cost is 11.9 mil and there are 14 apartments with size between 172 to 210 Sqm.
how to convert it to inventory with specific cost for each of them? is better to do it manually, or there is an option to make it through the Manager system?
Thank you.
Why would this be Inventory and not Fixed Assets?
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If using Inventory then each apartment should be specified as a separate inventory item. Details on inventory can be found at: https://www.manager.io/guides/inventory-items
As for fixed assets that would be more logical: https://www.manager.io/guides/fixed-assets
this project is build and sell, so we will sell the units and want to record the profit for each apartment.
is there any better way to do it?
Because you sell the apartments, then using Inventory is appropriate. Costs such as land, materials, labor, and permits should be recorded directly under inventory as they are incurred. If different specs for different apartments set each up separately as Inventory item. Tracking must be done at the individual item level.
You can use Production Orders, where each apartment is treated as a Finished good, and draw from the inventory items include land, labor, and other direct costs. However, there are some caveats. Since inventory is not a fixed asset, you cannot claim depreciation on these costs before selling the apartments. This means there will be no annual expense write-offs, which could impact your tax strategy. Additionally, if apartments remain unsold for long periods, the carrying costs, such as loan interest or maintenance expenses, could create cash flow challenges.
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Many thanks.