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Re: using inventory goods during production



Thanks for your advice.
Your second suggestion leaves the farmer with no measurement of his
stock, so I think your first suggestion will be preferred.
Although I still would have to figure out how the cost of goods sold
will be associated with the right department.

Mostly the fertiliser will be used per sack, being a part, not a live
stock, if that answers your 'pun' :)

ario


On Wed, 2010-07-28 at 08:44 +1200, Barry Clearwater wrote:
> One method to move it out of stock is to sell it to a customer, where
> the customer is your own company;
> You sell it for zero dollars, moving it out of inventory, no profit
> recorded but a cost of goods sold recorded.
> No cash moves so I would suggest *not* doing what you've suggested
> below because it will inflate your sales figures and possibly affect
> your tax position.
> 
> The preventative measure for this problem is that if you are buying
> fertilizer that you do not intend to sell on, purchase it with a
> vendor transaction rather than a vendor invoice. This way you select
> the expense category upon purchase.
> If the fertilizer is on the same invoice as items you intend to sell
> on, create  a vendor invoice and a vendor transaction, use the same
> invoice number and date for both.
> 
> In general, I would suspect a farmer does not need stock control in
> the "parts" sense, perhaps in the "live" sense ;-)
> 
> Regards
> Barry
> 
> On 28 July 2010 02:42, ario <..hidden..> wrote:
>         Hi Gerald,
>         
>         thanks, that sounds easy.
>         
>         But, how will the cost of the fertiliser appear in the 'costs
>         of goods
>         sold' of the specific department which consumed the
>         fertiliser?
>         Thinking of it, the follwoing solution pops up in my mind:
>         Maybe through a simultaneous cash transfer?
>         
>         'fertiliser stock' dept:
>         cash debited by X
>         inventory credited by X
>         
>         'couliflower on area 1' dept:
>         cash credited by X
>         costs of goods sold debited by X
>         
>         both cashes are the same company cash, only appearing under
>         different
>         departments. So the company cash position won't change a bit,
>         the
>         inventory is credited and the costs of goods sold are debited.
>         
>         Does this sound correct?
>         
>         thanks
>         
>         ario
>         
>         
>         On Tue, 2010-07-27 at 09:55 -0400, Gerald A wrote:
>         > Hi Ario,
>         >
>         > On Fri, Jul 23, 2010 at 7:11 PM, ario
>         <..hidden..>
>         > wrote:
>         >
>         >         for a farm there is fertiliser in stock, purchased
>         some time
>         >          ago and
>         >         recorded through 'vendor invoice', hence recorded as
>         inventory
>         >         in stock.
>         >         Now the farmer is spreading some of this stocked
>         fertiliser on
>         >         the soil,
>         >         but he is not selling any, nor does he know how much
>         produced
>         >         end-goods
>         >         (kg produce) will result from his current farming
>         operations.
>         >         How is the consumption of this fertiliser to be
>         recorded and
>         >         moved out
>         >         of the inventory and charged to that particular
>         >         'department' (specific
>         >         area) and project (cropping type and date) of the
>         farm without
>         >         selling
>         >         any to a third party?
>         >         I'm quite stuck with this as the only possible way I
>         see to
>         >         move this
>         >         used fertiliser out of the inventory is through
>         selling.
>         >
>         > I'm still getting my feet wet in ledger-smb, so I can't give
>         you a
>         > definitive answer.
>         >
>         > However, there must be a way to "consume" things out of
>         inventory
>         > without selling
>         > them. I think of a paper company -- when they need paper,
>         they just
>         > remove it from
>         > inventory. This would be similar to any process where a
>         company keeps
>         > supplies on
>         > hand.
>         >
>         > Now, as a pure hack, if no one else responds with the
>         "correct" way to
>         > do this, you
>         > could create a "customer" called internal who you "sell" the
>         goods to.
>         > Since the
>         > goods are paid for, you could "charge" the internal customer
>         $0 and
>         > this would
>         > allow your fertiliser to be consumed.
>         >
>         > It's a hack, and I'd love to hear the real way to approach
>         this.
>         >
>         > Thanks,
>         > Gerald
>         >
>         
>         >
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> 
> -- 
> 
> Barry Clearwater 
> Managing director
> BC Systems Consultancy Limited
> 
> Email: barryc - at - bcsystems dot co dot nz
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