Re: Purchase parts/services same as sales?

["Chris Travers" <..hidden..>]

On 1/15/07, Josh Berkus <..hidden..> wrote:
> All,
>
> Also, if your business produces services, there is often no relationship
> between purchases and sales at all, and sometimes there is.

True, however I am not aware of anyone who has had an operation
problem with this.  My own thought is that it is best not to allow the
purchasing of services at the moment because it poses accounting
issues, i.e. if I sell 1000 hours of services over a period of time,
but purchase 50 hours of services over that period as subcontractors,
how do I track revenue to expense?  It would be better to have a
labor/overhead based assembly to do the subcontractor bit.


> Item                            Purchase        Sell
> Coffee Beans                    Y               Y
> Cups                            Y               N
> Milk                            Y               Y
> Lattes                          N               Y
> Espressos                       N               Y
>
> Certainly you could represent a latte or an espresso as some kind of
> assembly, but in practice that would be too onerous to carry out.

Eventually, I want to be able to have this be a custom assembly with
modifiers (i.e. skim milk, etc).  We should make this fairly simple
and straightforward.  Any comments from those who work in coffee
shops? ;-)

If you don't do it as an assembly, you are unable to track your
revenue accurately against expenses.  If that is onerous, we need to
do what we can to make it less so.

>   And
> "employee coding hours" are no kind of assembly at all.

Right.  Once we can design a payroll system, it will be a separate category.
> So, a couple checkboxes would fix this ...

IMO, though IANACPA, this would open up additional accounting
problems.  The main concern is that a good accounting application will
be built to match revenue to associated expenses, and I am concerned
that this would be undermined by severing the connection between
purchases and sales.  A better assemblies interface with modifiers
would be a better way to go IMO.  Any feedback?
Best Wishes,
Chris Travers