Actually, issuing or receiving an invoice is not a criterion of recognizing anything in the Profit or loss account, it depends on when income incurred (goods/service delivered to client) or expense/cost incurred (service/goods received), if there is a choice, date of goods/service delivery notes or dates of goods/service received notes will actually be more accurate.
Thats because in current implementation all of your inventory purchases/debit notes are considered as expense. Then the opening and closing balance of the inventory is compared to see how much cost you have actually incurred and how much is left on hand. Opening balance + Purchases - Closing Balance = Actual cost incurred by you during a period. And when expense for raw material and finish goods accounts are different (like in your case) your raw material expense might be fine but your finish goods purchases=0 as you are producing it yourself while your closing inventory have value which caused your expense to go negative.
This method is used by many businesses rather than calculating cost per sales invoice. Maybe Project module would help with that but i havent checked that after these recent updates.
You forgot to mention that your statement, as mentioned above, is only true for Cash Accounting.
This does not apply for Accrual Accounting.
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Although it is used by many businesses, I am concerned that this has also become a paradox. The current calculation no longer considers the allocation factor to the Chart of Accounts (CoA) and forces many businesses to recognize expenses under one specific CoA, even though standard accounting practices may never direct expenses to a particular CoA.
To anyone involved in this change, please fix it immediately or, in an extreme measure, revert it to the original method. What is happening right now is already extreme for many users. Remember, we are now in the second week of January 2025, and everyone is pressuring, scolding, and protesting against me regarding this change because it has caused many delays in financial report analysis, delayed decision-making, and other negative impacts related to postponed reporting times.
Additionally, this change in method has caused issues with financial reports for previous months as well. Please fix this.
This change should have gone through a shadow operation process or testing phase or something similar, including the release of information about the changes made. Please be more professional in managing this. Our reputation has been destroyed in front of many people and humiliated, even worse, I am powerless and cannot do anything except discuss it in this forum.
See this, Look at how strange this inventory cost GL is (here is from GL Transaction Report for periode 01-01-2024 to 31-12-2024 but only shows per 31/12/2024 and choose the inventory - cost account. What are we supposed to say to the auditor??? Have the impacts of this been considered thoroughly enough?
Are programmer gonna keeping like these?
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Thats why i suggested many times to keep both methods. I have no issues with the new method and its much more flexible like multiple outputs in a Production order ,easier to understand etc.
@lubos The old method may cause performance issues and may hinder future development. I would still suggest keep your development based on new method (maybe call it Advance Inventory) while keep the old method too. Its upon the user if they want more features, fast performance they will eventually start using new method. If they are fine with basic features and they don’t have many transactions and performance isn’t an issue they can continue using old one.
Absolutely, I appreciate to @lubos about continous development but maybe need to give atention regard timeline. We are in end year that’s very crucial for many business for closing period.
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Thats another topic. Goods received/delivered not invoiced and vice versa are handled through a separate account which can be called Inventory in Transit, Inventory offset, Inventory Output/Input account.
@lubos mentioned that he might implement that and its already in ideas. And with this new inventory valuation method i think it would not be that much difficult to implement as it would have been with the previous method.
I think his posts is about possession of goods while cash accounting deals with the actual cash/paid for the goods/services.
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