Reporting P&L for a project showing the total cost of inventory?

We are starting a micro-record label releasing vinyl records. Manager looks amazing for us to help us get started and on top of finances.

Im wondering if someone on the forum could give us some advice?

We have created inventory of vinyl records (300) and attributed that to an expense account - vinyl manufacturing. When we do a project report or look at the summary report, we only see the relative cost of sale for vinyl we have sold (we have only sold 50). I understand that’s the normal way to see a business’s accounts.

However with a record label, it’s normal to recoup all the costs first including for inventory and then for sales after we are recouped, we distribute the profits via an agreed split.

Is there a way in Manager to see the full cost of inventory purchased, plus other associated project expenses, via a project report view or a different report?


If you are not accounting for Inventory but instead are expensing the cost, then you should not use an inventory item to record the vinyl records or else use inventory items with zero cost

Check that this is an allowable way to account for your inventory with your accountant. Taxation rules may not allow you to do this

ok, thanks for the advice. the inventory tracking is really handy so we can see how many records we have sold/ have left. I suppose we may have to decide which feature is more important? to see the full cost of the inventory as an expense vs being able to track numbers sold.

You can do both by using zero cost when buying the inventory items and recording the purchases directly to an expense account

Whether this is legal or not depends on tax laws in your jurisdiction

@clayc, your situation is not clear. You say your cost of creating your inventory is being posted to an expense account, Vinyl manufacturing. But you don’t explicitly say that you are producing the records yourself. Are you? Or are you contracting with a supplier to produce them for you, because you later mention “cost of inventory purchased?” This matters, because there may be ways of getting the information you want.

Your profit distribution arrangement is also not clear. The reality is that, until you sell inventory, there are no profits to distribute. Instead, you have remaining assets in the Inventory on hand account. And your partners or shareholders have interests in those assets via their capital accounts. So do not confuse proper accounting with distribution of profit. In general, profit can be divided however you wish, in accordance with your partnership agreement, bylaws, or whatever instrument governs operation of your business. I think what you have implied is that you don’t want to distribute profits until all your expenses are recovered. But that has nothing to do with accounting for the cost of goods sold. Those are just management decisions about who you distribute profit to, in what amount, and when.

If I understand what your objective is, the solution is quite straightforward:

  • First, you need to stop expensing acquisition costs of your records. They are not expenses, but investments in assets that will hopefully produce future income. Treat the records as the inventory items they are, whether you produced them or bought them from a supplier.
  • Second, do not follow @Joe91’s suggestion of using zero-value entries. That is incompatible with what I am suggesting here.
  • Third, be sure you accurately include a project designation (related to a specific record) in all applicable transactions. That way, the project summary will already include amounts for sales income and cost of goods sold (and, hence, profit).
  • Fourth, you need to compare the project’s profit to the amount remaining in Inventory on hand for the record involved. That information is available either by drilling down on the Inventory on hand balance on the Summary page or directly in the Inventory Items tab listing. Once project profit exceeds the remaining value of inventory, you have recouped your costs for that record. All future sales will, for your purposes, be pure profit.

Note that the profit determination for each record must occur outside Manager. Use spreadsheets for this purpose, completed on whatever schedule you make profit distributions. Some shortcuts, tools, and information sources are available, depending on your pace of operations and other business practices. For example:

  • Until costs for a record are recouped, it will not be part of profit distributions.
  • Once all costs for a record are recouped, you do not need to make comparisons regarding that record again until you manufacture or purchase more units. You know that all sales are pure profit.
  • The Sales Invoice Totals by Item report can give you sales totals for a period of time.
  • The Inventory Value Summary and Inventory Quantity Summary reports can point you towards records that need evaluation by virtue of having been produced or purchased since the last profit distributions were made.
  • Manager’s Copy to clipboard function can help you transfer data to your spreadsheets.

Note that this may seem like extra work, and it is. But that is not an accounting problem, just the result of your unusual agreement on distribution of profits. Every business encounters needs that go beyond standard financial reports. Decisions on distributions of profits are often unique. They might also include, for example, calculations on necessary emergency reserves, plans for fixed asset investments, and factors like preferential investment recovery for certain investors. Seldom are these needs met by pre-existing features of accounting programs. That is why Manager has capabilities for extracting data to use in outside activities.

Hi Tut

thanks for taking the time to explain this. Much appreciated, it’s very helpful.

Yes we are purchasing records from a supplier and I have already made them inventory in Manager, they only show up as an expense/cost once we have sold records. that is fine and I understand that is the correct way to show this.

We are setting up each vinyl record release as a project and each band/group as a division, all related expenditure is tagged in this way so we can report more easily. We will use your method to compare profit with ‘inventory on hand’ to see if we are recouped; and yes we will copy some data out into another spreadsheet that has all the agreed splits between the group and our label.

Manager is an amazing resource for us to make sure our finances are in order. It’s helping us to think about the business side of things more clearly.

Very creative! This exploits Manager’s ability to effectively implement a two-dimensional categorization scheme for all income and expenditures, as was originally suggested by @Morne_Kruger shortly after projects were first introduced: Added project-based accounting - #126 by Morne_Kruger.