Tag Archives: inventory

By account or by Item?

Software: MoneyWorks accounting software

You have an option of recording the invoice, payment or receipt transaction either via by account or by item tab. What’s the difference?

itemised product

You use the ‘By Account’ tab to record transactions which charge directly to the GL (general ledger) such as rent, repayment of the loan, purchase of assets, etc.; or some time cost of goods sold when you are not using the accounting software to track the inventory.

Use the ‘By Product’ tab when you itemised the products and services. Itemised product save time in data entry as the item description filled up automatically when using it in the transaction. It’s unlike the ‘By Account’ scenario where you have to type the item description as and when you use it.

It updates the quantity on hand and debits the inventory asset account when the inventory item has purchased, it then debits the cost of goods sold when the sales invoice has posted. It gives a real-time inventory status when the itemised product has used.

It depends on the business requirement whether to use the ‘By Account’ or ‘By item’ tab to enter data. Itemise your product if you want to standardise the product description and better data analysis on the data which you have captured.

MoneyWorks accounting system is suitable for small businesses managing their business finance. Book a demo today to find out how MoneyWorks works for your business.

Repacking

Software: MoneyWorks accounting software

Repacking of products occur in trading or OEM (Original equipment manufacturer) businesses. For example, a spices trader may buy the goods in tons but repack into a smaller bag of 25kg or 50kg; or pack into bags or carton with the customer’s branding or languages as required.

You can consider using an assembly method to repack the item into different UOM (unit of measure); in this case, the UOM has changed from kg to bags. For example, you buy item ABC123 in kg but resell to the customer as a bag of 25kg. After records the purchase of ABC123, you create another item and name it as ABC123-25 with the UOM as ‘bag’. Then, go to the BOM tab and select ABC123 as a component with a quantity of 25 (25kg). To automate the process, you may also select ‘Auto Build’, these allow MoneyWorks to create ABC123-25 and deduct the quantity of the source item ABC123 automatically when sold.

 

Accounting Software - build assembly

You can create many assembly items with a single source product which you have purchased from the supplier. You may also use the assembly method to repack promotional item; for example, a chocolate retailer may repack the chocolate bar into a gift pack during Christmas or special occasion.

You don’t need to be a manufacturer to use the assembly feature. You can use the assembly feature to convert from a barrel to pint, ml to bottle, or sachets into boxes. Assembly is useful, try it out.

Book a demo today to find out more about how to use MoneyWorks for your business.

Year-end stocktaking

Software: MoneyWorks accounting software

A stocktake is a physical count of your inventoried items and is necessary on a periodic basis, no matter how careful you are, the actual stock on hand may differ from the record in MoneyWorks accounting software.

The steps taken are:

  • Enter and post all stock related transactions in MoneyWorks.
  • Backup company file.
  • Click the start stocktake process button.
  • Print the stocktake list report from the reports menu for the physical stock count.
  • Enter the stock count into the count column.
  • Highlight all the items and click the finish stocktake button to finalise the stocktake.
  • Print the stock valuation report.
  • Lock up the financial period.

MoneyWorks create a snapshot of the current stock on hand once you clicked the start stocktake process button. Any stock related transaction posted after the start stocktake process will not affect the snapshot quantity, and the calculation of the quantity differences are between the quantity count and snapshot. It’s important to hit the start stocktake button on or before the financial year-end to allow the accounting software to capture an accurate quantity on hand, although you may not enter the count quantity immediately.

stocktake

MoneyWorks will prompt to record a stock journal once you have finished the stocktaking, it will debit/credit from the inventory asset to the stock adjustment account stated in the journal. Then, print a stock valuation report and lock the financial period after completing the stocktake.

Stocktaking is an important process, consult your MoneyWorks consultant if you have doubt.
Reference: page 348 of the MoneyWorks version 8 User Guide, Stocktaking