• Registered: 01/02/2014
  • Posts: 13

Topic: Cost Of Goods not adding up

Me inventory items are tracking quantities very well and I have the items I track quantities of set up with the standard default values when I set the items up. My services are set up differently as they should be so that they do  not get counted as inventory.
I don't understand why I have purchased so many items and yet Cost Of Goods shows a very low balance? The inventory is going in and out like it ought to, but it seems I'm not showing that we are spending as much as we actually are. Right now my COG for the year shows 18,000 and it should be more like 118,000 or more.

Is there someone out there that would be willing to look my system over and tell me where I went wrong? I have spent a lot of time going over it and it has me beat.

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: Cost Of Goods not adding up

Check the same type of transactions in the demo Chart of Accounts and see what difference it makes. State FA version / build.

apmuthu's Website

  • Registered: 01/02/2014
  • Posts: 13

Re: Cost Of Goods not adding up

I am running version 2.3.18 and I have looked in the chart of accounts and it makes not sense to me what so ever. If you look at the balance sheet for the end of 2014 it shows an inventory asset of $ 100,000 where we may and if you drill down into that you can see the transactions adding the amounts where inventory was purchased but it doesn't appear it takes away the inventory asset then it is sold. And then under COG in the Profit and Loss it shows no where near enough.

What I need is for someone who knows more what they are doing than I do to look a this and tell me what needs to be done. Does anyone know of someone who would be willing for a fee to look at this for me?

Thanks to anyone who can help!

  • joe
  • Administrator
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: Cost Of Goods not adding up

The COGS account is first updated when the Items are delivered/Invoiced to your customers. Until then your items are in stock (inventory).

If this seems ok, then check your accounts. Have you assigned correct COGS accounts on your items.

A good idea will also be to optain help from your local accountant. He can explain to you how the routines work.

/Joe

  • Registered: 01/02/2014
  • Posts: 13

Re: Cost Of Goods not adding up

Joe,

Over here in the U.S. accountants act like if you don't use QuickBooks they can't help you. Is there anyone you can recommend that would help look at this for me. My inventory is increasing and decreasing by quantity and I was able to get the COG amount closer by performing some inventory adjustments, however if I do a balance sheet drill down it shows my Inventory Assets way high. And when I drill down in there it shows they increase but do not decrease. I have the Item set up with the standard accounts as outlined in the wiki for item type "Purchased".

If you know of someone that would be able to look at this and make a suggestion or help me in any way please let me know.

Thanks,

Rob

  • Registered: 01/02/2014
  • Posts: 13

Re: Cost Of Goods not adding up

I believe I may be on to something but I am not sure how to fix it.

I see that in Feb 2016 suddenly the Inventory Assets are starting to down with items being sold on Invoices. Where as before they were not in 2014 & 2015.
A lot of the time we invoice items to customers before the item is actually invoiced to us. And I DO HAVE the option in setup to "Allow Negative Inventory" checked.

In example we invoice a customer for 3 of "Item A" when they order it and then we order it and later after the item has arrived we enter a Direct Supplier Invoice for 3 of "Item A" and then we pay the invoice to our supplier. So the quantity of "item A" will decrease possibly into the negative at the time the customer invoice is created and then be brought back into the positive when we receive the items.

Our Inventory Validation Report looks close to accurate but the Inventory Assets in the Balance Sheet and COGs for the year are what is showing up with far off numbers.

So do you think the negative Inventory issue is what is fowling up the GL balances? And if so what if anything can I do to fix it?

Thanks in advance for any help!!

7 Reply by apmuthu (edited by apmuthu 01/01/2017 06:05:48 pm)

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: Cost Of Goods not adding up

At the close of the year, you should have a list of negative inventory items that you need to account for since your vendor has not invoiced you yet. This list of negative inventory items have actually been supplied by the vendor but stands to be invoiced. You can pass the necessary Supplier Invoices for such inventory as if you have received the invoices, with a note in the memo part to indicate the invoice status.

As in your case, this routinely happens, you can enter the supplier invoice when the goods arrive and then you can invoice your customer for the goods sold. When the vendor's invoice finally arrives, the reference numbers and memo updates can be done.

apmuthu's Website