Inventory and reimbursement in invoice

[rquad3]

We have started to inventory items.  I allocate a job number to the puchased item in purchases (clicked I buy, I sell, I inventory).  The purchase does not appear in job if I look up reimbuseable expenses for the job.  The purchase also is not coming up in the actual invoice when I click reimburse.  The job is open.  I can reimbuse items that are not inventory for the same job number.  What do you suggest and thanks in advance.

[Celia_B]

Hi @rquad3 

Welcome to the MYOB Community Forum, I hope you find plenty of useful information.

In his matter, When an item invoice is entered, the account numbers are priced up from the item's profile, as an example the inventory account, and not the default account which is set up for all the purchases. Therefore, it is not possible to reimburse an item if it's an inventory item. This Help Article: Assign expenses to a job has helpful information that you can use as a guide. 

Feel free to post again if further assistance is required. I'm happy to assist. 

Cheers, 

Cel

[rquad3]

Thank you for taking the time to repond.  I do understand well how the job to reimbursement feature works. 

I don't understand why we cannot purchase 3 inventory items and have one listed as it  is enterred into the system as belonging to a particular job BUT it never shows against that Job.

I also don't understand why is it an option to allocate a job to an item that is inventoried.  What is the purpose of this function?

Is this in the enhancements somewhere?

[gavin12345]

Hi @rquad3 

Jobs are only used for P&L Accounts.

If you use 'I Inventory', when you make a purchase - nothing 'hits' the P&L (this is normal accounting practice) - so there is nothing to charge to the Job. It is not until the item is Sold, that a charge is make to the linked Cost of Sales account on the P&L , this is when it updates the Job cost. 

Play around with the sample clearwater file. I just processed a purchase and allocated the Item to a Job. It did not appear on the Job Activity report. I then processed the Sale of the item, and the cost component then showed on the Job Activity report - as expected. Because MYOB uses the average cost method for inventory, the COG is not determined until the goods are sold (normal accounting practice).

You would need to work around this design/accounting aspect if you want the purchase cost to hit the Job before the job is completed - you will find various posts about this on the forum. Some users stop using 'I Inventory' - this allows the cost to hit the P&L (and therefore Job) when the purchase is made. Others do interim Journals to post the purchase costs which they then reverse once the Job is invoiced. Depends on your circumstances, there might be better options. Speak to your accountant who might also be able to advise.

Regards

Gavin

[rquad3]

Thanks Gavin

Frustratingly, I dont' have access to the sample files (clearwater files) as apparently we dont get these with AccountRight 2021.1 or later.  Using the sample company file (Clearwater) - MYOB AccountRight - MYOB Help Centre FAQ's.

I've searched the forum again but haven't come up with anything relevant to creating interim journal entries or any other work around.  I mustn't be using the right combination of words in my search. 

My other solution was to create two item numbers that are essentially the same for the same item with an (I) at the end of one to show it is an inventoried item, but use the non inventory item number to allocate purchased goods intended for a job within the same PO.  So technically the item number without the (I) never hits inventory (which is fine.) The other half doesn't think this is a ligitimate way of doing it, though can't give a reason why other than that items/numbers are doubled up in the system.  I can't see a problem with this so long as we know what the item codes mean.  I currently use this practice as we purchase items for COGS and we also purchase the same items for Consumables or Tooling at times.  The separate item numbers with a (C) (T) means the correct account is being adjusted by the PO entry.  Can you see an issue with doubling up items so cost allocation is made to the correct expense accounts in the system?

If I were to create Journal entries I presume this is done online in 'create general jounal transaction.'  And the entry would essentially be DR COGS (allocated to a job number) , CR Inventory is that correct?

I am hopeful our next accountant will have the capacity to advise with such issues...we are in a transition phase.

Thanks for any further feedback you can provide.  I truely appreciate the time taken to help me understand. I've spent hours on the MYOB help line with no resolution or explanation from multiple people.  This forum is amazing.

[gavin12345 · Accepted solution]

Hi @rquad3 

Re sample files, the link you provided has a link to download samples.zip.

Re searching - yes MYOB's website searching is sub par - I use google or bing to search and add 'MYOB forum' to the search request, it has a better search engine.

Re items with C or T or I - this is a suitable work around. Can't see any problem provided linked accounts are set correctly. Some purchases will be expensed directly to the COG account and will not go to the inventory account - this should sort the Job Costing issue. This approach assumes you know when you purchase, which items and quantities will go to each job. 

Re General Journal,  yes correct in concept. However this can distort your Inventory Valuation Report reconciliation and runs the risk of forgetting to reverse the GJ. I would recommend creating and using 2 temp accounts such as 1-xxxx Inv Temp For Jobs and 5-xxxx COG Temp for Jobs or similar. This way you can readily see that there are transactions that need to be reversed, and the balance of the Inventory account will not be affected. Discuss best option with your accountant.

Regards

Gavin