Tracking codes or Subcategories in sales/Cost of goods sold?

Cant decide whether to use the tracking codes to keep track of labor vs parts vs outside labor sales and associated costs in 1 “sales” account and 1 “cost of goods sold” account or… break down into different accounts under income and expense.

Whats the preferred method. i vaguely remember hearing tracking codes were phasing out? could be completely wrong.

It depends on the depth of analysis you want. Some would be happy with one income, one cost of goods sold…
Other may want to know the relativity between different types of sales and their related cost of goods sold
Lets say you have three types of sales, by having three types of cost of goods sold, you could see what type of sale is most/least profitable.

i just decided splitting the accounts would work best because i can set “Sales - Parts” to charge sales tax, and “Sales - Labor” to be exempt. one less thing to click at invoice time.

Tracking codes should be used if you want to split business by divisions. That means if you are using tracking codes, ideally all income and expenses should be split by tracking code.

When job costing is introduced, I will be renaming Tracking codes to Divisions to put more emphasis on what is the use-case of this feature.

1 Like

Sorry, I meant to add that tracking codes are designed more towards departments rather then sales type but could be adaptive to give that same profitability analysis . You did mention “parts”, does this involve using inventory, if yes, then possibly using sale subcategories would be cleaner and simpler as you wouldn’t be adding in that extra layer of tracking processing

1 Like

i keep an extremely small inventory, basically just a few cases of oil and filters. more hassle to track than its worth. i do like the fact that with inventory you can make 1 set of items and the use them on the purchase invoice and sales invoice. im tossing around the idea of using it, i just know my QB inventory was a mess. You never use exactly the amount of oil you bill (takes 4.5 qts, you had to open 5 so you bill 5). employees steal filters here and there (not a problem just makes a inventory mess). if there was a way to have inventory without having inventory that would be nice. just about everything i buy i resell but dont keep any real $$ worth of inventory on hand.

You don’t have to use Inventory items module. You can create non-inventory items by going to Settings, then Sales Invoice Items or Purchase Invoice Items.

but then you have 2 sets of the same items.

i buy an m4612 filter i’ll sell the m4612 filter to the customer. inventory would be a better fit, but it adds a level of complexity im not sure i want to dive into.

Yeah, but those items are only for autocomplete purposes only. They are just to make your data-entry faster so you just select an item and all remaining fields will be filled out.

In your perfect world you would like the inventory to be a selling price listing only with out any quantity updating. That way you could directly expense all your purchases which would eliminate quantity variations. When invoicing a client, the selling (charging) price for an item could auto fill, entering the quantity gives the cost extension but wouldn’t alter inventory quantity.

Perhaps a Manager user has already tweaked a way for Inventory to work on a non-quantity basis

1 Like

I’ve been tossing around the idea of using inventory for normal parts which will never end up sitting around, they go on the car or go back, and use sales items for stuff like filters and fluids that don’t keep perfect inventory numbers. If there was a user tweak that would be great. I was even thinking it probably wouldn’t be hard to have a daemon sync sales itema and purchase order items so at least a part number search would return all transactions. New parts are added to the list almost daily so making 2 new items is cumbersome. I could use description and just list part numbers under each expense account category. Little less clean but it would work

From what you have been saying the use of Manager Inventory seems to be an overkill. To put a spare part into inventory in the morning only to take it out in the evening seem to be processing gone mad (in my opinion). Not knowing your operational set up or your reasons for using Inventory but based on your comment “I keep an extremely small inventory” can I suggest this simplification:

  1. Expense all spare parts and other consumables on purchase, this can be into one or various P&L purchase accounts (COGS). If justified, do a year end stock take and adjust accounts accordingly.
  2. Utilise the Sales Invoice Items feature, as previously mentioned, so that on your invoices the charge out items can be auto filled.

@lubos - Within the Create Sales Invoice Items - Account dialog, the listing is an A to Z mixture of both income & expense accounts. Wouldn’t it be cleaner to use the COA P&L order for the listing?

@Brucanna only reason i’d consider using inventory is to be able to keep track of where i bought parts for warranty reasons. i have 3 main parts vendors and theres a fair amount of overlap, i can get alot of the same exact parts from any of them. it’s nice to know who i need to call and yell at 6 months later lol.

the other option instead of using inventory, is to just list part numbers in the description box using spend money or purchase invoice. wouldnt itemize and keep track of profit per item, but like you said thats way overkill for me anyway. I just need a clean way to keep customer-vehicle history.

Ok, see where you are coming from and that raises the question how frequent are warranty claims. The higher the frequency, the better the purchase tracking needs to be. I’m going to assume that there are two types of spare parts, brand/model specific and generic (filters, fan belts etc), Do the warranty claims tend to happen under one type or both.

If the purchase invoice relates directly to a client(s)/vehicle(s) then those client(s)/vehicle(s) could be noted in the description box. For a mixed (specific/generic) purchase invoice you could note the client/vehicle for specific items in the description box. Would this provide sufficient tracking?

Alternatively, you could adopt the practice of not doing mixed specific/generic ordering, even not doing mixed client/client specific ordering, where feasible.

For the sales invoice you could adapt the usage of supplier codes. Let say your main suppliers are called Alpha, Beta & Delta. When providing a description of the work you could start with a (A), (B) or (D), even a (ABD) if required. This can then point you in a direction “if” the warranty need arises.

You wrote “wouldn’t itemize and keep track of profit per item”, but do you need that?. Lets say you have a general rule that mark ups on spare parts is X%, noting there can be exceptions. Then comparing your Sales Spare Parts against your Purchases Spare Parts would give provide a overview how that general rule is performing.

Also, “I just need a clean way to keep customer-vehicle history”. When Manager eventually has the JOB COSTING feature, your prays will be answered, meanwhile . . . . . . .