Item Category selected in Bills
Can someone please tell me which Category should be selected in a Bill for purchasing Inventory Items? I have some Bills that have selected the Asset Account Inventory and some that have selected th...
Forum Discussion
Hi Donna_L,
This can be a bit tricky since it involves accounting knowledge, but to give you an idea—when entering a supplier bill for inventory items in you should allocate it to your Inventory account, not the Cost of Goods Sold (COGS) or Purchases account. This makes sure your inventory value updates correctly when you receive new stock.
Here are some helpful guides you might find useful:
Managing linked categories
Entering bills
Regards,
Earl
Thanks Earl, I have one last question. I think where I have come unstuck is when I have created the supplier contact. In the create supplier screen, it asks for the "expense account" for all purchases for this supplier and the Inventory Asset account is not an expense account. So when I create a bill for a supplier the Purchases COGS account is already preselected as that is the "expense account" I assigned to the supplier. Should I go back in and change each Supplier contact to the Inventory account, even though it is an Asset account not an expense account?
