DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Inventory/Sales


#1

I have watched the videos but a bit confused can some one tell me the steps to take ie purchase then Inventory etc
I buy in polish but I don’t sell it, I use it and the cost is inbuilt into the service price.
I want to be able to bring up the inventory report which has the cost I have paid and the amount of polish left.
I also want to see it as Cost of goods sold in the P&L when I buy it

I am not sure what accounts I am supposed to use. or if I am supposed to be using manufacture or inventory, and what account I put the sale for the customer or the purchase of the stock.


#2

Can you be more specific about what you are selling? Just service, for which you buy supplies? Or are you buying to manufacture something?

If you buy supplies that are used up in the performance of your services, you don’t need inventory at all. Just allocate the cost of supplies to an expense account. For example, if a carpenter buys nails that are used on many jobs, he invoices for the job or for the hours spent. He does not usually invoice for nails.

Manager would not be good at monitoring the amount of polish left, because you might use different amounts on each job. Sometimes, you just need to look in the container, not at a computer. :wink:

To keep records of how much you have spent on a specific category of supplies, you can create multiple expense accounts.


#3

Service
I wanted to keep track of how many bottles I had in stock. Not the amount I use.
It would not of entered my head to keep track of the amount in each bottle so I thought you last comment was a strange.


#4

In accounting, inventory refers to goods or materials held for sale or production. What you are referring to is supplies on hand. Your bottles of polish are similar to boxes of pens or reams of printer paper. These are all supplies necessary for the delivery of services. What you are selling is the service. Such items are not figured into cost of goods sold, which are generally thought of as the cost of direct, identifiable parts and labor associated with an inventory item.

The trouble with trying to manage supplies through the accounting inventory function is that you have no way to record their use, unless you treat each job that uses polish as a manufacturing order with a bill of materials, and then invoice for the completed result of “manufacturing.” That seems like a very complicated and unusual way to run a service business. And it assumes that each job takes exactly the same amount of polish from a bottle. I doubt whether that is true. (By the way, when I referred to looking into the container, I was simply referring to making a physical assessment of how much you had left. I have no idea how big the containers are or how many jobs you can complete with one container.)

Going back to your original post, I recommend that you not use Manufacturing Orders or Inventory Items tabs. When you issue a sales invoice to a customer for a job, allocate the sale to an income account, named something like Polishing Services. When you purchase the polish, use a purchase invoice if you are buying on credit or want to keep track of a supplier. Just Spend Money from a cash or bank account if you are paying immediately and don’t need to track what you buy from a supplier.

I encourage you not to make your business record keeping more complex than necessary.


#5

I am an accountant and I do know it is not inventory but I was just trying to see if I could utilize manager in other ways.
I am going to use tracking codes
But my question is where is the tracking code exception report


#7

@Wornout, if you are buying inventory items and these inventory items are then used by the business for provide services, you can use Inventory Write-offs tab to record when inventory items are “consumed” by the business.

So the inventory item when purchased in an asset. Then when it’s “consumed” it can be written-off to some expense account using Inventory Write-offs tab.


#8

the exception report is not what I thought.It comes up blank what is it supposed to tell me? I was hoping it would tell me the code the description at least.