anyone experience like me here?
maybe this potentially to be bias or missleading. I see this condition like below :
From PnL
See the closing balance, those picture are from the detail in COGS account (PnL) and from the inventory value movement. The calculation maybe correct (see the closing balance). But if only use that method (opening balance + purchase - closing balance) it potentially missleading and maybe bias, because not all inventory that went out from warehouse were COGS. For example that inventory of mine were partially used as raw material for production orders to create finished good and another part were also sold but all usage allocated to COGS account.
Is there any setting to make this right?
why is this potentially misleading?
- The usage of raw material for production order should not allocated to PnL but to the finished good.
- Still there are entity that using raw material for production and at the same time use it as a goods for sold at also the scaame item in inventory so I think we can’t limit any business to performing their policies then manager should be easier to be adapted in any policies.
- For the calculation, if only use that formula which only see about closing balance as a factor to calculate the COGS, then the COGS would be filled with the large numbers because all the outflow of inventory were recognized as a COGS (this is because only see closing balance as e factor).
example :
- item A opening balance : 10.000
- Purchase : 5.000
- so goods for sold : 15.000
then we use the inventory :
- as Raw Material : 7.000
- as goods for sold : 2.000
- as a broken good : 500
then closing balance : 5.500
if we use that calculation : 10.000 + 5.000 - 5.500 = 9.500 (it all 9.500 goes to the COGS in PnL), whereas :
- 7.000 should go to the finish good using tab production orders (to the balance sheet as finished good or a new inventory)
- 2.000 should go to the COGS in PnL using tab sales invoice/inventory write-off that custom expense account has been allocated to COGS in inventory.
- 500 should go impairment expense CoA using tab inventory write-off.
- I think have to change that all otuflow of item inventory ajusted to the method we use, not all allocated to the COGS.
Maybe @lubos and teams think these changed are beneficially want to make Manager fast even with a lot of data in order to they changed calculation not based on transaction level.
But, are you guys sure about these?? Maybe these are paradox.
anyway I’m very stress for this last months regard this change and everyday everyone push me about these changed.