Tracking Inventory

Bushrah

Good day to you all
please I followed the instruction on "Simple inventory entry & tracking in Wave" on this link https://support.waveapps.com/hc/en-us/articles/208623546-Simple-inventory-entry-tracking-in-Wave to manage my inventory but right now My Profit and Loss statement is showing me the same values for my Income and cost of goods how do I rectify this as this was not the case when I was not tracking the inventory

Alexia

Hi, @Bushrah.

It's difficult to tell exactly what could've happened without being able to see your account or have screenshots of your reports, but here are a few things to check.

• Can you confirm that you have both an Inventory asset account and a matching Cost of Goods Sold expense account?
• When you buy inventory, your transaction should be categorized to your Inventory asset account.
• When you sell an item, you need to create a journal entry that debits your Cost of Goods Sold account and credits your Inventory account for the amount you paid for the items sold (and not the amount on your invoice).

Does that help? If not, could give me a bit more information? What should that report say? Could you share a screenshot?

Bushrah

I followed the instruction above and it enables me to track my inventory but as a result, it also made income and cost of purchase to be the same amount which will not make me track the profit

I have attached a screenshot of the profit and loss account

And where can I get a list of my purchases just as i can find for Sales also

Thanks

Alexia

Hi @Bushrah.

Can you tell me how much you buy your product for and how much you charge your client? It'll help me make sense of what might be happening.

What this looks like, to me, is that you're using wrong amount in the journal entry between Inventory and CoGS.

The amount you should record there is the amount you paid for the items sold. Let's say you buy an item for $10 and are selling it for $15.

1. Categorize that $10 expense to your Inventory account.
2. Make an invoice for your item, selling it for $15.
3. Create a journal entry that debits your CoGS account and credits your Inventory account for $10.

This will leave you with $5 of profits.

Looking over the article, I can see that this isn't clearly laid out. I've brought it up with the folks in charge of the Help Center on my end.

Bushrah

Thanks Alexia.

I think I now understand better and yeah, it was not clearly spelt out this way that the entry should be the purchasing price and not the selling price.

The challenge now is that I am using Wave for a food store and It will be difficult and time consuming for me to track individual items being sold to get the actual profit per sale.

Is there any other way I can do this i.e track inventory and still get the profit?

Regards

Alexia

You are right to say that, @Bushrah. Wave is made with businesses that offer a service in mind, rather than ones that offer products, which can make it less than ideal in certain cases. We do offer workflows and workarounds to compensate. They work for some of our users.

You might find it easier to handle your inventory outside of Wave and consolidate the value of your inventory as it appears on Wave in regular intervals (say once a week, or once a month). We should you how to do that on page 76 of Fearless Accounting. Maybe that'll help out.

Bushrah

Thanks for the information and I will try and do this going forward but the page is not as explanatory as the initial one can a more detailed step by step explanation be made?

Alexia

Hi, @Bushrah.

I'll forward your feedback to the team in charge of the Help Centre. If you run into any issues, you're welcome to reach out again!

Bushrah

How do I get to input 3 entries on the insert journal transaction as at the end of the month?

the one I can see is only for 2 entries

Alexia

Hi, @Bushrah.

You can use the "Add credit" and "Add debit" buttons to add more lines as necessary. I don't believe there limit to the number of lines. If there is, I haven't been able to reach it.