Internal use of Stock |
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Posted: 15-Jan-2007 at 06:41 |
If you use stock for internal purposes eg items such as oil, grease, etc in the workshop, or accessories “thrown in” to a unit sale, these items must be removed from inventory and the costs transferred to a suitable expense account.
In these situations, the stock is NOT billed to a retail customer, but an internal expense account
We can transfer these stock items to the appropriate Expense Ledger in a single step by using a TRANSFER INVOICE and a“WORKSHOP” or “SALES’ customer account. So the parts or accessories are “booked to the workshop” or “booked to sales”, and full transaction histories are maintained.
GST is not an issue in a transfer. The stock becomes an internal expense and GST is claimed as a credit on the original supplier’s invoice.
In Customer Control, create a Workshop customer - eg code “WSHOP” or similar. Use an obvious name such as “Workshop”
Tick the checkbox for GST Exempt and set the Price Level to V, so the stock is taken at Average Ex Cost In GL Code, use the lookup button and select the General Ledger for Workshop Supplies – 7150 in this example More often it is an expense account in the 9000 range Under the Trans Menu – Use Transfer Products Invoice Select the Internal customer and add the product(s) used Tap F10 to process the invoice
Click on the option to “Not print this transfer” Tap F10 again or click on the button to complete the process. A transfer is treated as a negative purchase, so the sales and profitability statistics are not affected The same process can be used to record Stock given away for donations, sponsorship or advertising or to record theft/loss/breakages etc, rather than using the Stock Adjustments system. Create additional “Internal” customers linked to the appropriate Expense ledgers eg DONATIONS, LOSS/THEFT etc. Edited by Susmita - 16-Jan-2007 at 00:26 |
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