Inventory Cost Detail Report - URGENT

Dear @lubos or @Tut, please help, The tax office was asking me about the costing detail of my inventory, how I can show them the detail calculation ? Is there any report how the calculation process ? In the past I remember I can click the value and the detail calculation was appeared but now it’s gone. Please help urgently.

The information is not gone, and nothing has changed in recent memory. In the Summary, click on Inventory on hand balance, then on the balance for the inventory item. You will see every transaction that contributes to that balance. You can export the listing.

If you want quantities, go to the Inventory Items tab. Or use the Inventory Quantity by Location or Inventory Quantity Movement reports.

Hi @Tut, For example now, the tax office do audit with all of my transactions and they asked me for 1 sales invoice that incurred inventory cost automatically on my P&L, they asked me to proof that number (how to proof the calculation to them ?).

Well, @rully_p, you are never going to get that. Manager uses the average cost method (ACM) to value inventory. Under ACM, it is not only possible, but normal, that no unit of an inventory item was ever purchased at exactly the average cost attributed to it when it is sold. ACM takes into account your entire previous history of purchases and inventory movement.

The tax office is asking the wrong question, and I suspect they know that. Or else you are misinterpreting the question they are asking. Nowhere on any sales invoice is the cost of inventory ever shown. (This is true in all accounting systems I know of, not just Manager.) If the tax office wants you to justify your deducted expense for cost of goods sold on a specific sales invoice, the way to do that is to:

  • Drill down on the Inventory - cost account and locate the debit associated with that sales invoice. This will (normally) be something less than the unit price for which the item was sold on the invoice.
  • Drill down on the Inventory on hand account and the item’s subaccount and find the corresponding credit. Confirm this number matches the one above.
  • Also in the same drill-down, look up the running balance for that item just before the sale.
  • In the Inventory Items tab, drill down to obtain the quantity of that inventory item on hand or owned (depending on whether you are using goods receipts and delivery notes) just before the sale.
  • Divide the balance by the quantity. Those two numbers will yield the average cost at the time of sale, which will be the same number as the debit and credit mentioned above.

You will obviously notice that verification of average cost for a specific sale is not necessarily simple and does not lend itself to a manageable report. But it is a straightforward and ordinary accounting procedure, and your tax office auditors should be completely familiar with it. ACM is one of the most common inventory valuation methods in use around the world. The length of the process is most likely why they have asked you for justification for only one sales invoice. They are trying to validate the process used by the software.

Note, for audit purposes, every step produces a list that can be exported to provide documentation to the tax office.

Also be careful that you do not use the various balances shown in these listings on the same line as the transaction. Those are the balances after the transaction. You want to be using balances and quantities from just before the transaction.

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Yes it has. Prior to the introduction of Goods Receipts and Delivery Notes, when you clicked on the “blue” Total Cost figure for any Inventory Item on the Inventory Items tab, this provided the transaction history of both quantities and money and the Avg Cost was clearly identifiable and calculable. But since the introduction of GR and DN the quantities and the money have been segregated as the Total Cost figure is now in black, so the Avg Cost is no longer lookup able.

However, a simple way to calculate the Avg Cost now is to export the Inventory on hand account drill down of the Inventory Item as it contains both quantities and money, and with the addition of a formula, you can calculate it line by line against the running monetary balance.

Yes, you could also perform the calculations that way. However, @rully_p’s tax office seemed to be looking for justification of how the program determined cost of goods sold. The method I explained exposes the two numbers used for the determination, without any outside calculation except to prove that those two numbers do, in fact, result in the cost of goods debit amount. In other words, the last step in my process (bullet #5) confirms that bullets #3 and #4 produce the numbers seen in bullets #1 and #2.

So @rully_p can use whichever approach is most convincing to the tax office—or both.

@Tut - When did forum responses become a competition - mines better then yours.