I am currently experimenting with dummy account to simulate difference between physical stock and stock in Manager.
I purchase 12 units of Item A for 12000 (1000 each).
I sell 12 of them for 12120 (1010 each), so I earn 120 profit.
Then, I try to sell 1 more of Item A for 1010 without purchasing first. Now Manager shows that I have 1130 net profit, and -1 of item A. So, I think I need to do the write-on journaling.
I did it just like how the pdf guide shows :
Debit of 1 unit of item A and 1000 purchase price into Inventory on Hand account.
Credit of 1000 purchase price to balance into Inventory Adjustment account (I created this account manually before doing the journaling).
I expect that now Manager shows me I get 130 net profit as it should be, but it turns out that it still shows 1130 net profit while the stock is fine as 0.
What steps am I missing? or What do you think I did wrong?
I think this is in accordance with the real reality. You sell goods that have no price, you get 100% income. You don’t need inventory ajasment. COGS will accumulate automatically when you make a purchase invoice for the goods you sell and you will get profit as it should.
If you want to enter COGS manually during sales, you can use the Manual COGS facility on the sales invoice
Inventory on Hand is actually under Assets, its just that I checked “Exclude zero balances” option in Summary and because item A is currently 0, after I do Write-on, it doesn’t get displayed.
(Top part is my Manager screenshot, below is PDF Guide screenshot)
The only difference between you and me is that I made “Inventory Adjustment (Penyesuaian Stok)” account and put the Credit there, not into Retained Earnings.
I’m still feeling lost.
Here is my line of thinking:
By doing the Write-on, we are putting an additional Item A with the value of 1000 into our inventory and we pay this 1000 value from the money we get from the last sales (when we sell the 13th Item A).
In other words:
inventory = -1(lost from last sales) +1(earned from Write-on) = 0 ;
money = 1010(earned from last sales) -1000(pay for value in the Write-on) = 10 (profit).
Yet, by following the PDF guide, I can’t seem to achieve this.
Here is another screenshot, comparing my Manager before last update (left side) and PDF guide (right side):
We can use the expenses account in the write-on, but we have to pay that expenses.
The guide seems to be also using expenses account, but saying nothing about paying the expenses. Does that mean there is an additional step to do in Write-on Journaling, which is Payment?
You are overcomplicating things and the situation you created does not warrant the use of Write-on adjustments Write on inventory | Manager. Write-on is an anomaly in accounting.
You sold stock that you did not purchase yet so as you reported Qty is -1 and Net profit 1,130. You can not sell what you do not own (inventory) so you still will have to purchase that inventory and depending if the purchase price is the same or not the Qty and Value in inventory will be adjusted accordingly.
Not sure what PDF Guide you refer to but must be the one that you can generate at any time so the latest is available from the old website at www2.manager.io A lot of changes have been made to inventory that make much more sense and eliminated some previous thinking by the Developer and is much better at inventory assessments such as actual inventory and adjustments. You can do an advanced search on the forum and include @Lubos in that search. The new guides at Manager.io are still a work in progress with even some links not working and as such the most updated info is on this forum, but still good to look at the new guide as the basics are there.
I think perhaps I should provide some context of what I’m trying to achieve by doing this experiment.
We are running a small retail store. It is not rare for us to sell a physically available item while it is already zero qty (or even minus) in Manager. Purchasing the missing item is not a solution because the item is already purchased. Write-on is going to be our prefered solution, and that is why I do this experiment so I can fully understand the feature. I was expecting Write-on to be some kind of replacement for “purchasing” and Write-off is also going to be used in tandem.
Actually, I’m aware of the web guide, but some pages that I open in web is so similar to the pdf version, and because the pdf is always available, even offline, it has become my preferred reference. Anyway, thank you for the additional tips and suggestions.
Must be a great store, if it can spontaneously generates stock out of thin air!
Maybe you need to look at your procedures for receiving stock and correctly accounting for the quantity you receive - or maybe you sell goods to customers and they don’t notice you charged them for 10 but only delivered 9?
I wish we can manufacture our own goods. Either that or, for some reason, the inventory in-out is not properly recorded into Manager. I won’t argue that we still have much to learn in inventory management. Nonetheless, any error we’ve made so far needs to be corrected yet some of the causes is no longer traceable, thus the need for stock adjustment.
The discussion for root cause analysis and the long-term solution is, I think, best done in different topic outside of this one.
