I want to know the right way to record the following entry in Manager.
We are a window tinting company, we usually order exact quantity (Unit = SQM) required from our supplier for each project. So it was easy to allocate Project to each purchase invoice.
Now, we got a 10-15 tinting jobs from one client which will be done over the next 2-3 months. So we decided to purchase these tints in wholesale (Unit - Rolls), to get better pricing. Now the purchase invoice is of 2-3 rolls, but the projects will be various.
For Example: 1 Roll contains 100 sqm of window tint.
Project 1 - 24 Sqm will be used
Project 2 - 36 Sqm will be used
Project 3 - 15 Sqm will be used
Project 4 - 5 Sqm will be used
Project 5 - 20 Sqm will be used
- What is the right way to enter this wholesale purchase and split it into different projects. As i mentioned earlier the projects will take 2-3 months to complete, but we will be allocating exact quantity to each outlet/showroom.
- how can we allocate exact quantity to each project?
Set up inventory for tint material and use Unit of measure of sqm.
Record purchase invoice for roll as 100sqm.
You can divide the purchase invoice into multiple line it, each for a separate project. The total will add up to the complete amount purchased.
At the time of entering the purchase invoice, we do not know which project requires how many sqm of material. And as i mentioned in my post, this roll will completely be utilised over the period of 2-3 months.
and how will i allocate the material to various projects? and split it over a period of 2-3 months.
Instead of allocating when you purchase, allocate the inventory on the sales invoice when you sell. The sales price will go towards project revenue. The cost of goods sold will go towards direct costs automatically.
The sales quantity is not same as purchase/used qty in most cases. Also, some projects, we just charge a lumpsum amount and not quantity wise.
Is there a way where i can buy the roll and add it to inventory. and add the project via delivery note or some other method?
You are making this much harder than it needs to be. Read the Guides about managing inventory.
As it is suggested up, you can receive the whole quantities in the purchase invoice into your inventory records without selecting a specific project.
Then upon issue of materials to each project, you can either use General Journal Entry and specify the project in each line, or you can use write off method and also specify which project to allocate the issue on.