New to Manager, Need to report Expenses without Sales

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Brucanna,

I appreciate your measured response. As I responded to Tut very early on, I want to emphasize my “goals” in using Manager. Let me do it again, but with different words this time:

• I want a Double entry Accounting tool, to prevent/minimize searching through data to figure out my clerical coding error.
• I want a tool that helps purchasing become an easier process than it currently is.
• I want a database of purchased items and Subcontractor costs that eases estimating burden with an organized Construction Code of Accounts (not accounting!) without maintaining cross-linked spreadsheets.
• I have no employees, only Subcontractors. And they are out to make money as well, sometimes at my expense.

I’ve tried Gnucash, and now Manager. Manager’s inventory module resolves a LOT of issues for me. Items 1, 2 & 3 above.

It will give me more time to search, assess/estimate future properties to acquire, as well as manage current rehabs; item# 4 above.

It was only the issue of expensing current purchases when they were installed that caused me heartburn, plus there are times that I purchase components at such a great price that I hold as inventory to be used on the next project(s). Even overestimates of components can be returned to inventory…something on the shelf for the next project.

My searching through previous threads found that solution. It was elegant and resolved my problem.

Now, some comments on your comments…

@Brucanna

Your earlier comment on consumption is flawed in accounting terms - “I have consumed (installed) inventory Items that I can’t see as detail expenses, until I enter a Sales Invoice”.

You don’t consume “inventory items” on being purchased, they are put onto the shelf and are only consumed upon leaving the shelf - entered into a Sales Invoice.

You are correct, but you overlook one thing…A Sales Invoice for the property is issued when the property is SOLD, CLOSED and FUNDED. Not only do I have to hold the property as an asset for up to 6 months (legal entanglements, such as foreclosure and eviction), I would have to hold all installed items as inventory for another 6 months, even longer if selling takes 6 months in itself. So we are talking about 1 year or so sitting on the books as “assets”. Not good… If I have to file Income Taxes Quarterly, not good.

Sure it makes sense from an accrual basis, but… And your little suggestion made it work out for me. Thanks!

@Brucanna

From the beginning it has been suggested that you don’t use Inventory Items for things which are actually direct expenses, so perhaps you could consider this - use Inventory Items purely as a commentary / note making area and not for any accounting functionality, this would hugely improve your reporting.

Ummm…no. Buying in bulk (overbuys due to great prices) require inventory tracking. I can leave them there until I do allocate them to a project.

On larger(!) projects to which I have been assigned, there are elaborate, complex systems set up at project initiation for all of this. They maintain a project inventory, which is expensed at purchase (specific project!), then meted out as needed. Accounting was Accrual Based. I’m not trying to do that, except that I want to use Manager Inventory to manage specific project purchases, yet maintain traceability of overbuys and unused components.

@Brucanna

You don’t consume “inventory items” on being purchased, they are put onto the shelf and are only consumed upon leaving the shelf - entered into a Sales Invoice.

So, please explain how I can Purchase, Install, get Invoiced, Pay by checks for all of that in a single morning, yet not be able to see that expense as part of my monthly Income Statement as material expenses and subcontract expenses, and not as “Inventory on Hand”? Which does me no good for job cost by Chart of Accounts and Tracking Code.

Your solution on the other thread does that, to a “T”. Thanks again!

@Brucanna

If anything I would use the tracking codes within the P&L and Special Accounts within the Balance Sheet.” + year end adjustments. This is how most other builders / property developers using Manager would operate.

Okay, I hear you, but please explain how:

• Work in Progress for a specific property
• Codes for Construction cost elements (Labor Materials & Sub, Indirect costs - by Property)
• Change Orders, Internal Changes & Rework tracking, through Purchases, Installation costs and profitabillity
• Cost History of purchases, average pricing

can be performed using:

P&L and Special Accounts within the Balance Sheet.” + year end adjustments

I am using the “Tracking Code” to track purchases, payments, etc. to a specific property. If I were to “dual use” it, for other coding requirements…

I already use a Control Account and subsidiary ledgers for Work in Progress by property, which I can “retire”/check inactive when sold - plus potentially an accounting entry to move that asset cost over to the Sales invoice. Same for Tracking Code…put an "X - " in front of it…forces it to bottom of list.

@Brucanna

This is how most other builders / property developers using Manager would operate.

I’ve seen lots of builders over 30 years go belly up with lots of completed inventory (properties), lots of cash in the bank and greedily going after more property. And with Good Accounting support.

Property Developers is a pretty broad group, and covers Single Family, Multi-family, Condos and Townhouses…can you put them in contact with me? I’d be interested to hear what they do and how they are using Manager, and operating their business and Manager. They don’t have to hold a forum discussion…

And Sole Proprietors…no employees, whould also help.

Thanks again!