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Re: using inventory goods during production
- Subject: Re: using inventory goods during production
- From: ario <..hidden..>
- Date: Wed, 28 Jul 2010 12:39:14 +0000
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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