FrontAccounting forum — Accounting for internal use of items

Re: Accounting for internal use of items

2013-08-29T08:12:33Z

This looks more like what I want to do, but the adjustment screen doesn't seem to allow you to select which account to put the write-off into for any individual adjustment. I suppose I could do a GL entry to move the expense to the proper account, but it might be worthwhile in a future version to add a way to select something other than the default adjustment account for that item as the account that the adjustment goes into.

Thanks for the help!

Re: Accounting for internal use of items

2013-08-28T21:24:35Z

Then why you do not use Inventory Adjustment, which just writes the item value off without false income effect?
Janusz

Re: Accounting for internal use of items

2013-08-27T08:53:09Z

Would that not have the effect of still creating phantom income, though? I want these to show as a loss—if there is, say, $20 in income created by the invoice, the $20 expense will have a net effect of $0, so my expense is effectively not recorded. If I record it twice to force the overall effect to be –$20, then my expenses will show as $40, which paints an inaccurate picture of where my finances are and could cause problems when I look at the numbers for budgeting.

Perhaps FrontAccounting would benefit from a "Inventory Write-Off" feature that would simply post the value of whatever inventory items are selected to any given expense account. It seems like this is a fairly common inventory situation—there is always going to be inventory loss due to damage, theft, employee error, product expiration, etc. no matter what kind of inventory you carry, so having a simple workflow for accounting for such writeoffs would probably be useful for the majority of users who use FrontAccounting's inventory features.

Re: Accounting for internal use of items

2013-08-25T10:07:03Z

I guess you can create separate clearing GL account in Bank Accounts, and once a month or so repost the balance to expenses.
Janusz

Re: Accounting for internal use of items

2013-08-24T09:08:42Z

I went ahead and tried this, but of course since there is no discount being applied now, there is phantom income being generated (in this case, it showed up in petty cash since I set it as a cash sale on a direct invoice). If I do apply a discount, won't that show up as an expense in "discounts given" (thus counting the usage under both "discounts given" and "QA")? How can I avoid this, or balance out the income, in a way that avoids the write-off being accounted for twice?

Re: Accounting for internal use of items

2013-08-20T11:57:53Z

You can select sales account in branch data. So, when you create separate 'Internal use' branches for 'test lab' and 'artist' you can assign 'artwork&design' and 'QA' GL accounts to them respectively.
Janusz

Accounting for internal use of items

2013-08-20T05:42:20Z

I'm sure I've overlooked some feature that would handle this, but I am not quite sure what it would be, or even really what to search for to find more information about it.

I have some items in inventory. I need to deduct units here and there for internal use (i.e. not sales), and have the expense added to the appropriate GL account. For example, I had an artist require that we send him one unit of product as part of the terms for the use of his artwork—I need to show inventory decreasing by 1 unit, with the expense being charged to my "artwork & design" expense account. Similarly, I need to send 2 units to a testing lab, which needs to be charged to a "QA" account.

What is the best way of handling this in FrontAccounting? I tried doing an invoice to a fictitious "Internal use" customer with a 100% discount charged to the appropriate account, but found this also increased my "sales" account, which I don't think is what I want to do.