Accounting for inventory when it's included in a project but not itemised in any invoice for tha ...

Question

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We sell product which is straight forward when accounting for inventory but we also do projects with the price being made up of labour, accommodation, travel, meals mileage and product etc. These jobs are invoiced at particular milestones and the invoices don't include itemised product. My issue is getting the product out of inventory. The only way I can think of is to do a stock adjustment but I'm thinking that this is probably a fairly common thing and there's maybe a better way that I should be doing it? Thanks

Earl_HD · Answer

Hi @Kylie2911,

Thank you so much for your post and welcome to the Community Forum!

My apologies for the late response. In this situation, I would kindly suggest reaching out to an Accountant or a Financial Advisor. They have the expertise to provide you with more comprehensive information and guidance, ensuring you receive the most accurate and tailored response to your specific needs. Your financial well-being is important, and they can offer valuable insights to assist you in making informed decisions. Don't hesitate to seek their assistance and expertise.

Feel free to post again, we're happy to help!
Regards,
Earl

Kylie2911 · Answer

Sorry - maybe my question wasn't very clear. I already have non inventory items for labour, travel, accommodation etc that's not the issue. The issue is accounting for actual inventory that is included in an overall project price but not billed separately. For example - total contract price of 6M paid over say three draws. These draws are just for an amount (say 20% deposit, 60%  then final 20% on completion) it doesn't actually list the stock (because there would be hundreds of items) so I need to account for my stock that has gone out as part of the project and is no longer sitting on the shelf. I can only think of doing it as a stock adjustment but feel there's probably a better way as surely there are quite a few business's doing the same thing? Thanks

Earl_HD · Answer

Hi @Kylie2911,

Thank you so much for your post and welcome to the Community Forum!

Apologies for the delay in my response.. Handling inventory in projects where the invoices don't include itemized products can be managed effectively without resorting to stock adjustments. Here are some suggestions for handling this scenario:

Use Non-Inventory Items: In your AccounRight, you can create "non-inventory items" for labor, accommodation, travel, meals, mileage, and any other non-product expenses associated with your projects. These items won't affect your inventory levels but can be included in project invoices.

Set Up Service Items: Create service items for services such as labor, accommodation, and travel. These service items should be non-inventory items as well.

Feel free to post again, we're happy to help!
Regards,
Earl