Many accounting software are focused on having a solid system for the accounting of inventory items used for producing final goods or sold directly, but there are other items which may be inventoried depending on the financial policy of the organisation, this includes stationery, spare parts, office consumables (biscuits, soft drinks etc.) and cleaning supplies. Some firms keep them as current asset and expense when the items are issued or consumed
I have hardly come across any system/software that has a dedicated module or function for the acquisition and issuing of this type of inventory.
In practice these items are same as merchandise inventory but the difference is that merchandised inventory is issued to production (direct cost) whiles stationery etc. are issued for used by the organisation but not traceable to finished goods.
I am therefore requesting for the inclusion of a module called āsuppliesā which will record the inflow and outflow of supplies telling the user the balances of stock items in the moduleās reports.
It would be necessary for the module to have the option of choosing what expense ledger/account to issue the items into. So for items like A4 papers, printer cartridges, pens, envelopes, and staple pins, we can issue them into the printing and Stationery ledger/account. The account to issue an item into may also be preselected in the item creation page.
Spare parts of machines can be issued to āMachinery Maintenanceā Expense Account if they are not going to be capitalised. Inventory items which are used in production but not directly traceable and therefor canāt be correctly used in costing items for manufacturing orders and inventory kits can be issued to a direct expense account, e.g. plastic moulds which are used in concrete product can be issued straight to a direct expense account.
During purchases we will select āSupplies on handā instead of 'Inventory on handā.
On the issuing page we must have āissued toā to record the person receiving the items and āDepartmentā to record the receiving department.
This will be a great tool for the officer in charge of supplies and logistics, it will also enhance accuracy in financial reporting, and mean another milestone for Manager.io
Inventory items tab can be used for items which are for selling or internal consumption.
When you āconsumeā inventory, you should use Inventory write-off tab to write-off value of consumed inventory into some expense account such as Machinery maintenance or Printing and stationery.
I just wish that in the balance sheet inventory for manufacturing or creation of finished goods will be presented on a different line and inventory meant for office consumption will also be presented on a different line.
@Tut, not really because all inventory items will be presented under Inventory on hand asset account.
In future, it will be possible to have multiple control accounts for inventory items, customers, suppliers, tax codes etc. So not everything will have to be posted to default control account.
I was thinking of creating separate inventory items for inventory held for sale versus inventory to be used internally. And different expense accounts for purchase of goods for resale versus for internal consumption. What got me thinking in that direction was remembering a situation where we had the exact same product we held for general resale as well as some stock held in reserve for a specific customer. They hadnāt actually purchased the stock yet, so financially there was no difference between the two items, but we had a contractual agreement with the customer to maintain a defined quantity on hand so they would never experience backorders. So we treated them as different SKUs.
But I could be missing something, as I donāt use Managerās inventory capabilities.
This is why upcoming warehousing module is so important. If you deal with this sort of scenario, you could create new āwarehouseā and transfer required qty into it. That way you still deal with single SKU but can see how much is actually available on hand for sale, not how much you have total on hand.