In service based businesses where inventory kits are produced and sold to order many times a day, it would make sense to be able to write-off unsold, discarded or lost kits.
Inventory Write-offs are the most faithful representation of sucj transaction and this would eliminate the need to resolve to difficult to understand workarounds such as using Sales Invoices and or Receipts, which would possibly be as difficult justify to auditors and tax authorities.
I disagree strongly with this concept. Inventory kits were introduced as data entry shortcuts for inventory items stocked, managed, and stored individually but sold together. An inventory kit does not exist until sold. For example, tables and chairs are handled as individual inventory items, but might be sold as a dining set (probably at a lower overall price) as an inventory kit.
Thus, an inventory kit cannot be written off, because it does not physically exist.
The example in the linked thread was a cocktail. Cocktails of the type discussed in that thread are not made in advance and warehoused for later sale. They are mixed to order and sold instantly.
Personally, I question the entire notion of treating consumable refreshment supplies as inventory items. That is a lot of accounting work for little value; but I understand why some entities might wish to do so, such as when constituent components are stored for indeterminant intervals before potentially being used again. But incorporating a write-off feature for inventory kits into the program could well lead to problems. Future developments are unlikely to take account of usage of inventory kits contrary to their entire reason for being.
Even though I agree with a big part of your reasoning, the workflow described in the OP is a valid workflow and Iām not in a position to judge why this cocktail was mixed and then discarded but the OP provides an example of this happening.
To separate the issue from that individual case, it would be useful to take IKEA as an example, which deal mostly in assembly kits. Some of their kits come prepackaged and in case of these kits get totally damaged, I imagine they would be able to write-off the entire kit instead of having to write-off each component individually.
I can surmise from your reply, that you appreciate the problem but not so much the solution, which is great since the OP didnāt describe this idea to be the end-all-be-all solution, and Iām not willing to defend this idea when an alternative solution is available.
What would you propose if you were in that exact situation?
Imo it is an issue as a result of trying to use Manager as a POS system.
Discarding cocktails implies they have been made and do physically exist.
How Manager should handle this depends on what market Manager as trying to address and the effect on other businesses which use Manager for other applications such as straight accounting.
I donāt think your Ikea example holds up. Ikea stocks, counts, and manages the complete kit. They do not collect components from individual items when one is sold. Their kits are finished goods in their own right.
Maybe, but while Iām not entirely for designing Manager around specific niche cases but carving out the boundaries of Manager to avoid specific use cases will eventually corner it into a niche of itās own.
The OP found that Manager fits 99% of their needs and is trying to figure out how to incorporate the remaining 1% without going too much out of their way. I would argue that a General Accounting Software such as Manager should be able to accommodate that, in theory.
I donāt suggest turning Manager into a POS, but, it would be nice to have versatile tools at hand for users to cope Manager to better fit their situation ā tools such as Inventory Kits in this example.
Not sure why this is in the ideas category. I have not come across any accounting application yet that writes off an inventory-kit or similar as a whole. In all cases we should break a kit down or disassemble and apply the write-off to the individual items, because writing off a kit:
would ignore the value of the individual items itās composed of;
can lead to an inaccurate inventory valuation. Some items may still have value or be used elsewhere, and financial records need to reflect the true value of the inventory.
Also note that inventory adjustments (such as write-offs) are typically made based on individual item costs or specific issues like damage or obsolescence. Treating a kit as a single unit can conflict with these practices.
I sometimes have to make up printed circuit boards with 20+ components which I have as inventory kits. On the rare occasion that one fails it is more economical for me to toss the whole PCB and build a new one. Currently I write off the items individually which can be time consuming, but being able to write them all off in kit form would be a real game changer.
Iām all for it.
I dont know why some users are against this even if its just a shortcut for mutiple items still this shouldnt be an issue. If someone doesnt want it they can select items individually. I think Inventory Kits should be available everywhere where possible even Production Orders (which i think was already discussed and can somewhat solve the lack of BOM issue in Production Orders). Only place it could make issue is Purchases because of cost allocation issues other than that i see no issues in it.
I think Production Orders are suitable for āBuild to Stockā Items and Invenotry kits are suitable for āBuild to Orderā.
Have to disagree here. Make to order items are still Finished Goods and are NOT Kits. Perhaps a solution for Vacuum Dog would be to complete the full production order and scrap the one PCB that is a reject.
That is a totally incorrect use of inventory kits. @Mabaega is correct. You should add the PC boards to inventory as separate inventory items using a production order. The value in finished PC boards in Inventory on hand will then reflect the value of their components at the time they were built. If one must be scrapped, the program can assign a value. But if you scrap an inventory kit, the program has no way of knowing what the value of the components were when the kit was assembled for sale, because the individual components are not linked to a specific kit. For all the program knows, the kit could have been assembled last year when parts were cheaper.
Cost of goods sold for inventory kits is determined at the moment of sale, because that is when the program assumes components were pulled from inventory.
@VACUUMDOG, your workflow is just plain wrong accounting. Within Manager, inventory kits are part of a one-way process that only involves sale, never production. And that highlights another problem with your approach. Non-inventory costs, which can be captured with a production order, cannot be captured by an inventory kit. If you were to write off a kit, what would you do with non-inventory costs?
The PCBās (and other certain items) are made as required. They are not a āStock Itemā.There is only parts costs involved.
You have no idea of my workflow!!
The method I use works fine.
The discussion here was about the feasability of being able to write off inventory kits, not to criticise other peoples business practices.
In addition to my earlier post where I explained, why to my knowledge, no accounting application has a write-off function for an inventory kit, please also see the Manager guides at https://www.manager.io/guides?inventory-kits
Specifically [emphasis added]:
An Inventory kit is essentially a bundle of Inventory Items that are sold as a package, but arenāt physically grouped or stored as a single unit. The items within the kit can also be sold individually at different times. When a kit is sold, its components are collected from their respective storage spots for shipment. While the inventory kit isnāt used for manufacturing, it serves as a convenient sales strategy that offers multiple advantages.
While everyone seems to be sidestrepping the issue of being able to provide the ability to write off inventory kits IF REQUIRED ie no-one is being forced to use it, I will explain my use for this.
A customer brings an item in for repair.
I find that the PCB is fried and make up a new one from inventory on hand (stock that is available for individual purchse) with no labour actually charged to the kit.
My labour is charged at fixed rates ie easy, harder and complex, for the whole repair.
If the new pcb fails in a major way it gets binned and a new one made up. If itās only minor I might replace just the failed components and write them off individually.
This suits MY work flow and has done so since 1987.
As in other ideas that get put down by some here no one is saying you have to do it that way. All we are asking for is the ability for us to do it as an option.
At times there just seems to be too much negativity hereā¦sad.
Inventory kits have a much broader range of uses than just their literal definition.
So some businesses might find this useful for make to order products.
No one is sidestepping this. We tried to explain that writing off an inventory kit is not a good idea for accounting because Inventory kits use quantity of items not including each items value which causes all kinds of issues when writing of as the values of these inventory items may have changed and thus it can not simply returned at the values at the time of creating the inventory kit. Therefore, however simple it may seem, a reversal of the qty at some āreturnā date of the PCB in most instances will result in inaccurate inventory valuation of the items used. Hence the need to disassemble the kit to its individual items and write off qty + value using standard inventory write-off procedures. I encourage you to search the internet, look a other accounting software including SAP (used by IKEA) and you will notice not any will allow for inventory kit write-off if they have such functionality for reasons given. They all tell you to disassemble to the individual items to write-off (often also referred to as components).