Recording sales of items not kept in inventory

1

Hi,

I am a bit confused as to how to handle this. I occasionally resell items for another local business. So these items never get stored in inventory. I basically just markup the suppliers price by a fixed percentage.

I don’t want to have to add every single item in this suppliers catalog to my inventory. So how do I record these transactions?

2

if you are not selling on credit, then follow this guide Manager Cloud

if you are selling on credit you will have to enter sales invoices. just enter the item name you are selling in the Description field each line without selecting any inventory items.

3

The question is - when reselling these items how does the other local business (the supplier) get paid.

EG - If the other local business has Product A in their catalogue for 100 and you re-sell it for 120 to your customer how does the other local business get their 100.

Normally, you would charge your customer 120 and the supplier would send you a purchase invoice for 100, as they are selling to you.

4

OK, so for example I create a non inventory item. Which account would the expense of buying go to? I guess this more an accounting question than a how to use the software question. Do I need to create a new account to expense these purchases under? If so what is this account normally called?

5

You could create two accounts and use names most applicable/suitable to you.
For the sales - Re-seller Sales or Local Business Sales
For the expenses - Re-seller Purchases or Local Business Purchases

6

Thank you, that really does help. I am not an accountant, but I am trying to keep all my small business accounts straight and it sometimes does get confusing

7

You can do this with non-inventory items if you want. But you already said you don’t want to add everything in the other supplier’s catalog. You don’t need to create any item at all. Just enter a description, like @sharpdrivetek suggested.

8

Based on your comment “I occasionally resell items”, then you only need to create “one” generic non-inventory item called Local Business Products which will be permanently linked to your appropriately named P&L income and expense accounts, then on the odd time that you sell one of their products, just select that non-inventory item and adjust the description and values to suit.

If you happen to sell a particular product more regularly, then you could set up its own non-inventory item.

9

That’s exactly how I ended up doing it. Thank you all for your support