Good faternoon, i work for a company which press MDF and laminate sheets ( raw materials ) to make final product, now for some of the products we will ask another company to press them for us, we will give them raw material (MDF and Laminate Sheets) and they will press and charge us $21+ GST per sheet.
Could you please help me how I can take raw material out of inventory and enter finished products without building them in system?
Thank you
Hi Jo2014 , if you hold the raw MDF and laminate sheets in stock as such, then ignoring spoilage/wastage you could record this as follows:
1. Create inventory items for the pressed sheets
2. Create a purchase order on the processor with negative qty of raw sheets at their cost, to record the issue. Note that the onhand qty of the raw sheets will not reduce, but the available qty will.
3. On receipt of pressed sheets, add a line to this order for the pressed sheets at a cost of the raw sheet plus $21/sheet
4. Convert this order to a bill. The net payable should be the processing charge.
Made-up example:
Issue -60 raw sheets at $120 per sheet = -7200
Receive 60 pressed sheets at $141 per sheet = 8460
Difference = 60 sheets at $21 = 1260 to pay
Thank you so much for your reply. i didn't undrestand the second part.(2. Create a purchase order on the processor with negative qty of raw sheets at their cost, to record the issue. Note that the onhand qty of the raw sheets will not reduce, but the available qty will).
I was wondering if i could rase the Po with Service lay out for Contract Pressing, and dont involve inventory and when i recieved the items i just build them in my system amd add another cost for pressing fee. the problem is i dont know how i can add pressing cost in build item section?
Hi Mike
Thank you for your help, could you assist me with below questions please?
1-when i create PO about Raw Material should i ionclude GST?because i use two material to Build the finished product one MDF which has GST and the other one laminate sheets( which will be pressed on MDF) which we buy from oversiese and are GST free.
2-when i add line for pressed sheets at a cost of the raw sheet plus $21/sheet, the gst ? In this case Gst appliyes to cost of the raw material too.
thank you so much for helping me out.
Hi Jo2014 , if your business is claiming the GST content, then the amounts on your purchases should be net of GST, then add the GST at the bottom. (Untick the GST flag at the top of the purchase window to see your line amounts as GST-exclusive).
