Tag Archives: Small Business Accounting Software

How to add a memo line in Sales Invoice?

Software: MoneyWorks accounting software

Sometime you may want to insert a note before or after an item when preparing an invoice. It could be delivery information for the driver, project information which you want to show in the invoice, or shipping information such as the port of discharge, port of destination, estimated date of arrival, etc.

You may add an asterisk (*) before an item code, link it to a memo income account (to prevent confusion with the actual sales account), and omit the * item from printing on the invoice form. For example:

Item code: *POD
Name: Port of Discharge:
Sales account: Memo income

asterisk item

Then, apply the below formula on those columns which you want to leave it blank when using an * item in the invoice form, columns such as stock code, quantity, unit price, tax code, and the amount.

Formula sample:

if (Detail.StockCode = “*@”, “”, Detail.StockCode)
or
if (Detail.StockCode = “*@”, “”, Detail.UnitPrice)

form design

In this way, only the description column prints the information which you have entered in the detail description column.

Print Invoice

Consult your MoneyWorks consultant if you need help in designing forms.

 

Reference: MoneyWorks User Guide, Form Design.

 

 

Refund an overpayment in QuickBooks

Software: QuickBooks Desktop accounting software

You have an option in QuickBooks Desktop accounting software to offset the overpayment received with the outstanding invoices via set credit feature or refund customer the overpaid amount.

Highlight the outstanding sales invoice from the customer payment transaction, click the Set Credit button and select the credit (overpayment) to offset with the invoice. You have to do the offset process a few times if the overpaid amount is supposed to knock off with multiple invoices.

On the other hand, you need to amend the original customer payment (the overpaid transaction) if you need to create a refund to the customer. At the lower left corner of the customer payment window, select the ‘Refund the amount to the customer’ radio button and click the ‘Save & Close’ button to continue with the refund.

Refund from customer payment in QuickBooks

You will see a payment transaction window on the following page, and then select the relevant bank account, payment mode and change the date if required.

Refund overpayment in QuickBooks.png

QuickBooks will update the accounts receivable and bank account once you have clicked the OK button.

Intuit QuickBooks 2019 is available, contact us if you like to upgrade your QuickBooks.

 

Inventory cost adjustment

Software: MoneyWorks accounting software

The cost of sales of an inventory item realised when the product sold, whereas the non-inventory item realised upon purchase.

The purchase invoice debit the cost of sales account and credit accounts payable when a purchase invoice of the non-inventory item has recorded. Non-inventory item used in drop-shipping businesses, back-to-back, or project kind of order, which you do not track the inventory as the purchase made is fulfilling a specific customer order.

Inventory item is different, you purchase in bulk and sell it slowly to various customers. It debits the inventory assets (in Balance Sheet) and credit accounts payable account when purchase invoice has recorded. It debits the cost of sales and credit inventory assets account when sold.

The complexity comes in when you recorded an item as a non-inventory, sold it to a specific customer, being rejected and returned by the customer, and you converted it to stock (inventory assets).

Assuming you purchase a non-inventory item Ni-101 at $1000 for a customer, It debits the Cost of Sales and credit Accounts Payable account at $1000.

The customer returns the non-inventory item Ni-101 and exchange for an inventory item S-200, which has the same selling price and cost as Ni-101 on the following month.

You decided to stock up Ni-101 by creating a new product code Ni-101S (inventory item) since the original product, Ni-101, is a non-inventory item.

Method 1:

You can create a sales invoice for S-200 to reduce the stock on hand at $0 amount and a negative quantity of Ni-101S with $0 to add the stock back. This invoice:

Debit Accounts Receivable $0
Credit Sales (S-200) $0
Debit Cost of Sales (S-200) $1000
Credit Inventory Assets (S-200) $1000

Debit Sales (Ni-101S) $0
Credit Accounts Receivable $0
Debit Inventory Asset (Ni-101S) $0
Credit Cost of Sales (Ni-101S) $0

There is no movement of inventory asset value or cost of sales when Ni-101S adds to the stock on hand. The cost of sales has already realised earlier when the purchase invoice of Ni-101 has recorded.

The margin of Ni-101S will be 100% if the item sold.

This method shows a conversion of non-inventory to an inventory item, focus on the stock on hand but not the realisation of the cost of sales and stock valuation. For example, the cost of sales realisation of Ni-101 (non-inventory) could be in period one, whereas the sales or Ni-101S (inventory item) could be in period three.

However, if you prefer to realise the cost of sold of item Ni-101S upon item sold, then you may consider method 2.

Method 2:

This method requires using a purchase invoice to adjust the item cost of Ni-101S. First, you create a product (only checked the checkbox for ‘We Buy This’), name it as COST_ADJ (or something which you preferred) and link the cost of sales to the expense account field.

Cost adjustment product

Then, create a purchase invoice (you may create a creditor and code it as COST_ADJ) with Ni-101S in line one and COST_ADJ in line two. Ni-101S with quantity and value of $1000, this is to stock in and update the product cost. Whereas COST_ADJ is a negative quantity and value to reduce the cost of sales. The purchase invoice:

Debit Inventory Asset (Ni-101S) $1000
Credit Cost of Sales (COST_ADJ) $1000
Credit Accounts Payable $0

Adjust product cost

Next, create a sales invoice to the customer for inventory item S-200 with $0 selling price to indicate an item sold to the customer. This sales invoice:

Debit Accounts Receivable $0
Credit Sales $0
Debit Cost of Sales (S-200) $1000
Credit Inventory Asset (S-200) $1000

Sales invoice for goods exchange

In future, MoneyWorks will debit the cost of sales and credit inventory asset $1000 when item Ni-101S sold.

Method 2 is a better solution as it gives an accurate stock valuation.

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