We manufacture liquid plant nutrition that goes through a few production steps before there is a final product that is bottled into 1, 2, 3, 4, 5, 10, 20, 25, 200, and 1000 litre holders.
Sometimes we make use of the 20, 25, 200, and 1000 litre holders to store the product and then it sometimes needs to go back into production.
How do I return the empty holders into the inventory when it is empty as the production order only has 1 entry line?
These holders were purchased with other material in it that is used and the holder is now empty and not an inventory item when it’s empty although we use it for storage purposes for a time before it goes back into production.
Please just guide me as I can’t find it something like this in the guides.
Use negative qty in Bill of Material. For instance you want 5 empty bottles to be added to inventory, select that bottle as item and enter -5 in Bills of Material.
Note: For this you have to use Periodic Inventory Revaluation method or else it wont work.
Is this why insufficient stock shows up when I add the 25-Litre as a -0.8 and -3.2 when I empty the content in another container on the same production order?
It doesn’t solve the qty but only prices. What I have done now is bring the empty bottles/cans/holders in as journal entries with the other full products that were brought in when the business started. This solved the negative qty and nothing else in the accounting change as there is no cost involved to the empty containers.
So what I rather would suggest is that anyone who makes a purchase of some kind and wants to reuse the container, bring the empty container in with the purchase at no cost, then when you have to reuse it, it is available to add as a negative in the production side and no other accounting problem will arise in Manager.
That would increase your work too much. Just creats a Test business and play with it. You will know how things are working.
There was no need for Journal Entries.
If you are reusing some bottles as part of your manufacturing process, those bottles are not really part of your inventory just their contents (liquid plant nutrition) is. That would be the case if used bottles were not readily saleable as new items.
I suspect what you really want is a multiple output products from a manufacturing process (which was a idea in Manager), particularly if the holders were still saleable as new items.
It’s only one time that I use the Journal. If you have 48 hours to do 8 months of work, you don’t have time to play with test accounts and search for answers. You need to get to the answers and the correct info fast else time laps and you fall behind too fast when you need to relocate everything in your business and house to another location.
What I did work and looks like it will not incur any accounting problems further down the line.
Then it can’t be used in production to fill it when the draining takes place, so how can it be a tool, Patch? The finished item is an inventory item as there is no other choice to make else the production order lacks another entry to choose from.
You could consider simplifying things quite a bit by distinguishing packaging that get sold and this is part of an inventory item and whatever you use to temporarily store supplies such as the 1,000 litre holders. The latter should just be treated as materials under Assets.
How will I then fill the 5-Litre cans that get sold as a product?
There is a manufacturing process that starts in a fermentation tank 1000L, from there it gets filtered down into 20-Litre drum, then it goes to a second manufacture tank 1000L, then it gets filtered down again into 20-Litre drum, then it goes to the storage tank 1000L.
This whole process is taking 4 to 6 months. In between we add products in the 1 stage and 2nd stage, liquid get filtered down and get stored to re-enter the process again. Each of these stages get recorded in the production.
So how will you setup this plant and keep track of the stages and the end and waist products?
I suggest that you have 2 control accounts - 1 for Raw Materials and the 2nd for Finished goods.
Then when you purchase a product in a container (say 25lt) that will end up in the production process record it as 25 litres of product and 1 @ 25 litre container under Raw Materials control account (UOM for product - Litre, UOM for container - Each). Use a nominal price for the container (say $1, or the price of the container if you had to purchase it empty).
Purchases of empty containers will also be recorded as Raw materials (UOM - Each).
Then Finished goods will be say, Fertilzer - 5 Litre (UOM - Each), Fertilzer - 1 Litre (UOM - Each) recorded using Finished goods control account.
The approach detailed by @AJD is a good one, but you could still make life simpler.
You seem to want to try to capture your production process in an accounting application which is more about the value and sales than the process. I would advise that you keep the process management separate from the accounting and use other software to monitor the processes.
As for the accounting all you should consider making the 1,000L fermentation, manufacture and storage tanks as Fixed Assets. Pending the longevity of the 20L drums these could also be fixed assets. Then following @AJD you could create inventory items under a Raw Materials control Account including intermediate stages and the final stage ready to sell product(s) under a Finished goods control account.
