Inventory - Assets / inventory items

[keylee]

Hi 

We buy stock that we use as an asset and also the same stock we use for selling.  I have set up the inventory to show buy / sell / inventory but unsure how to deal with the asset side as well.  If we purchase the stock, we don't want it to all appear in the COS.

Can you please let me know how to set this up correctly, do I need to do journals etc?

[Steven_M · Accepted solution]

Hi @keylee

When you create an item you will get the options of "I Buy this item", " I Sell this item" and "I Inventory this item".  By selecting all three of these options it will ask you select a series of accounts. These accounts are a "Cost of Sales Account". an "Income Account for Tracking Sales" and an "Asset Account for Item Tracking". Generally you would have a cost of sales account set as the cost of sales account, income account as an income account and inventory account as the asset account. When you have setup the item and the accounts according to the relevant options it will do the following in terms of accounts:

• If you purchase the item, it will place the item into the "Asset Account for Item Tracking". 
• When you sell that item it will calculate the cost of sales amount and place that amount against the "Cost of Sales Accounts". It will also place the income amount to the "Income account for Tracking Sales".

For example this is the setup of my inventory item. Notice the accounts selected.

Say I purchase an one of these items at $100.  The amount of the purchase goes against the inventory account.

When I sell that item the cost of goods accounts is included along with the income account. The inventory account is also getting reduced.



So provided that you don't select a cost of goods account as the "Asset Account for Item Tracking" and add in the relevant accounts for the relevant options you would be good to go.

I would recommend taking a look at Help Article: Inventory for more information into setting up an item and recording transactions. Also MYOB have a fantastic classroom training course that covers Inventory Management It does go through the basics to more advance inventory management. If you are getting into Inventory or just want a fresher its well recommended.

Do let us know how you get on with the creating of that item and if you require further assistance.

[keylee]

Thank you for the info.

If I have already starting using the Item codes, when I try to select I inventory this item, it states that it already has sales or purchases on file for this item.  Can I get round this somehow?

[Steven_M]

Hi @keylee

Terrific that is good to hear that you have gone ahead with using those item codes.

In terms of wanting to tick the "I Inventory this Item" after recording transactions for that item.  When you have the option "I Inventory this Item" unticked, it has not been keeping track of the quantity or value of stock. As such you are unable to mark that after doing sales or purchases for that item. This is due to the fact that it is not able to work out what the current value of the stock is and therefore can't work out the cost of goods sold when you do transactions. 

There are two options if you do require that "I Inventory this Item" box to be ticked:

• Creating a new item and tick "I Inventory this Item". You would then use that new item from now on.

or

• Deleting all sales and all purchases for that item, ticking that box and then redoing those transaction. Please note that if those transactions have been paid you would first need to delete the payments and then delete those transactions. For more information into deleting transactions please see Help Article: Deleting a transaction

If you do require further assistance in regards to either option do let us know and we would be happy to expand on an option for you.

[Selby]

Hello,
I am trying to follow these instructions... I have deleted every single transaction but still it brings up the message that there are transactions for the item I am trying to inventory. And when I open the item up to "Buying details" there is a "Last purchase price" still in there. Where is this transaction hidden?
P.S. the transaction journal is completely empty, even for a date range extending beyond the time we have had MYOB for.

[Steven_M]

Hi @Selby

The Last Purchase Price field is designed in such a way that it has a purchase value in it at all times. This means if you enter a purchase it will be populated with that price. If you actually delete that purchase the purchase price is still listed as the Last Purchase Price. As this is the last purchase price of the item, even if that purchase was deleted it still is the last purchase price.

As to trying to delete your item, if you go to Inventory>>Items Register and select that particular item that you are trying to delete. In the date range enter 01/01/1753 to 31/12/9998 then push tab on the keyboard, do you get any transactions appearing in that Item Register screen for that particular item?

[Selby]

No. Reason being is that it is not an inventory item, i.e. I have not ticked "I inventory this item," which is why I need to delete it in the first place. But if I go to transactions journal and put in the date range you suggested, there are still no results. Through the day I will be entering opening stock levels so I expect that there will be some entries there later on.
This problem has not shown itself for the majority of the products, it is only for maybe 10 out of 200. I'm still building up the product list so it's not too extensive as yet.

[Liam_M]

Hello @Selby

Search by the item in find transactions. If there are no transactions in the date range 01/01/1753 to 31/12/9998, but the error keeps coming up for a few of those items, this would be due to a problem in the current version of AccountRight. The error can come up when there are no journals for the item as  there are still back-end records related to the now deleted transactions.

If this has occurred, then unfortunately there isn't a way for you to change the existing items to be inventoried. There is a work around  that will allow you to circumvent this problem though.

Change the name and item number of the existing item. For instance you could call the item Unsed01. After this create a new item with the old name, and select 'I inventory this item.'

[Selby]

Thanks Liam, 

I have done this anyway and marked the old items as "Inactive"

A bit of a pain, but it worked. I have marked your post as the answer.

[Selby]

Or I tried to accept as solution but it doesn't seem to have worked.