How to track inventory in Wave
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How to track inventory in Wave
When you spend time and money to build up a stock of items that you can sell, you have converted cash into an asset known as "inventory." To properly assess the state of your business, it...
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Katie, thank you for the details on how to handle inventory. I am still having some difficulty. My product has 50+ parts to it and I set up an asset account named COGS - parts & WIP inventory. I've charged all of my parts purchases into that asset account. I am using cash method, no invoices in Wave (sales are all thru paypal). How exactly do I fill out the journal transaction? Of course my standard product cost is less than the sales.
Hey Katie, I figured out the journal entry with help from a post by Samd on Dec 11, 2018.
debit my COGS - purchased Parts & Materials
credit my Inventory - parts & WIP assets
hi @Bob_M thanks for taking the time to post a follow up comment. Glad to hear you found a resource to help you and how you've outlined it is a great way to handle it.
Hello, Thanks for the article. I cannot find the "More" button as described in your article. This is the sentence: "You will need to use the Journal Transactions tool in the Transactions page - located by clicking the More button."
Please advice?
Thanks
Hi, I'm buying and selling books, although some of them stay in the business for the instructors who are using them. I have assets, COGS and Inventory and I figured out how to record it with journal transactions (my bank account is connected).
I'm now leasing the books, how do I record this? Thank you
@atamano Here's a screenshot from my test account showing where this is located under the transactions page.
@Joya To confirm, are you leasing the books to clients of yours? If so, you could technically create an income transaction to account for this, or create an invoice in Wave that shows they are being leased out to a client.
@JamieD yes, my clients. Normally I include the book in the invoice, when I get paid and the transaction is recorded, I categorise the payment as Invoice Payment. However, I'd like to know how many books have been leased at the end of a period. If I creat a different income account, for example Books Leased, and then split the transaction into Invoice Payment for the other item and books leased for this item, would this be the right way? Would I see then the total of books leased in my report? Income statement or balance sheet? Do I have to relate these books leased with my inventory? And does this mean I need to record this with journal transactions?
Hi @Joya. Thanks again for your insight and questions here. I feel as though the best way to handle this is to create the income account separately for transactions splitting -- if this is what you are wanting to track. Keep in mind though, that on the products/services page for your items, you are adding a specific income account to each of these (which shows up separately in the profits/loss statement). This would be the same if you are categorizing a specific income transaction with that income account as well.
You would see the total amount of income made from the Books Leased (as an example) -- but the only way to see the total amount of transactions or number of Books Leased is to count them on the details of the P/L Statement. I hope this helps!
Hi @JamieD , thanks for your reply. So, this works well to know the total income made from the books leased. Is there a workaround to track the books so I am able to know how many books are leased up until today for example? I'd like to know how many books are out (leased), and record when a book is returned. If I do this with journal transactions, which accounts should I use? Books leased and inventory (with the price I buy the book?)?
However, when setting up items we cannot use the account Inventory, thought it can be changed in the Bill. I just dont understand why when setting up items bought, must be expensed? Please Wave, add "Inventory" assets to the drop down menu. Ill track my physical inventory with spread sheets but we shouldnt have to make ledger adjustments every time. Even stated in you Chart of accounts that GOGS isnt to be used for Inventory, please make this more user friendly.
@Joya so just be clear, the type of unit-value you're looking to calculate isn't supported in Wave; instead, creating a journal between inventory asset and COGS is probably your best workaround (although I'm always happy to be proven wrong as long as I learn something!).
@Torkrench that's a fair point, and we appreciate you sharing your feedback about that!
Hello
I've understood regarding recording of inventory in sales, we make a proper sales entry via its tab of "invoices", record payment, then make a separate Journal entry, debiting COGS and crediting the inventory we sold... ok,
but I'm bit confused about Purchases, when we enter a purchase using Purchase tab, then "Bills" and then we record the payment made, so one cycle is complete, now how to record this purchased item in inventory?
I love your application. It is simple and it works. But as the owner of a side business that makes and sells widgets, I need a basic little inventory process. Track the purchase of x number of supplies. Allow me to convert said supplies to inventory on hand. And then reduce that inventory through sales. I am good doing this through a journal entry as you suggest, but converting items to value separately is too cumbersome. If I have to maintain a separate inventory in excel, I might as well do the rest on their as well.
I would LOVE to see a simple inventory function added. I would even pay a reasonable amount for it.
Hey @Ejaz -- You would technically need to create the Asset account (under the chart of accounts) that you are creating for this purchased item (when you create a bill in Wave and mark it as paid, it doesn't create an account for you -- you would need to do this manually).
@BrigadoonWine Appreciate the feedback and a bit of an idea of how your workflow would improve with this particular feature -- I will make sure that your voice is heard in terms of adding this feature in the future!
After a certain amount of process, I convert those material Goods into the finished product. Just finished product is a batch of wine, subdivided into X number of bottles.
The value of each bottle of wine is the total cost of that particular batch divided by the total yield in bottles. When I sell a bottle for a certain price, the profit is that price minus the vslue... cost of food sold.
It would be far easier to increase these inventory items with purchase orders, and decrease the inventory through sales or invoices.
Unless you do more than 1 million dollars in sales, you can just track purchased inventory as the COGS, I dont know why they dont point that out. so much easier. I am not manually doing journal entries for the 100s of eCommerce transactions a month.
Why can't I add an asset through creation of a bill? I mean if I receive a bill for an asset received, I have to create a bill, but the only accounts I can choose in the bill -are expense accounts. I tried to add a product, but couldn't select an asset account to account that product. Am I missing smth?
I tried to follow your instruction here - BUT I am buying a property, I created an account under PPE in Chart of accounts and I can't do a manual transaction, in the selection - it doesn't suggest PPE account. the only account I can select - Inventory. sucks...
@Louisa_S The ability to create a bill and associate it with an asset account is still not available in Wave. We are currently working on a solution to this specific feature, and hope to have it implemented in the future, but we still do not have an ETA as to when it will be available. If you purchased a fixed asset, you will need to create an expense transaction manually in Wave and associate it with the asset account that you've created (under the Chart of Accounts section).
Inventory Reconciliation / true up?
I've been successfully creating a journal transaction each time a sell a product, debiting my purchases parts & materials, crediting my parts & WIP inventory for my product's estimated standard cost.
Now I'd like to reconcile / true up my parts & WIP inventory account for the end of Q1 2019. For example my physical inventory is $3300 and the account shows $3000. I assume I need a journal transaction for $300, debit and credit from/to?
Thanks,
Bob
https://notyourdadscpa.com/can-i-expense-inventory-when-i-purchase-it/
Thanks for this
@Bob_M
Here is my work flow:
I categorize my purchased raw materials to my individual inventory accounts. I'm sure you can do this through the "Bills" section too, but I prefer doing them as transactions that I can attach my receipts to..
I sell on Amazon, so I do a Journal entry monthly after I can download a report from them showing what I've sold. From this, I do my best to estimate a cost and create a journal entry which debits my inventory account(s) and credits the appropriate COGs account(s). Of course this is only an estimate in my case as it would be impossible to have separate entries for the thousands of items sold each month!
Every quarter I'll do a more accurate inventory count and compare my value in actual inventory with Wave's inventory numbers. To reconcile this difference, I just create a "reverse" journal entry (named Reconciliation or something to that effect) where I debit the difference to the appropriate GOGs account(s) and credits it against the inventory account(s). This puts things back into balance. Of course, you can do this once every 6 months, or maybe even just once at the end of the year just before tax time and you'll get the same result in the end.
Tip: Use the account Description field to store a qty<->value formula to make it consistent for you in the future when you do other reconciliations. (Example: One of my raw materials is in rolls, so I leave the note "$62.00/Roll" in the description, so all I need to do is count my inventory and multiply by my cost per roll which is conveniently stored there for me). The description will show up near the account name, reminding you how you normally convert between the two
Jon, thank you!
How can you track inventory for an item that you produce, and isn't associated with a "withdraw" or "debit" transaction? For example, purely creating a new item such as an apple or tomato that will contribute to your inventory.
we need an integration for a simple inexpensive inventory app. Buy a good & code to inventory- then the # in the app goes up, sell & it goes down.
Hi @travis88 . Because Wave doesn't actually support inventory tracking and this article really is a workaround for it, I'm not able to give you the proper steps on how to enter in inventory with no value. I would see if you can get a basic value on your product based on raw materials so that the article applies to product.
Thanks for the post @Torkrench . We review these messages when looking to implement new features and prioritize feature requests so your feedback is appreciated!
@alexlewiszarkos I do have an associated value, however, there isn't going to be an associated account that can properly hold the "funds" used to debit the inventory account. I suppose I could create a throw-away account, so long as Wave can be set to completely ignore its value.
You cant & thats the frustrating part. You can create an inventory account...then post all items to a COGS account, I use "Parts Purchases" The Inventory value of the parts that sit on the shelf gets transferred to Inventory account through a ledger transaction. The items themselves are maintained on a spreadsheet. You CAN buy inventory items with a bill, though the system doesnt seem to like it & there is no Cost/Sell- only one price value...after some items went on a invoice at cost, I said screw it & went to what I do now. Bank pulls in a purchase, it gets coded to Parts Purchase & the stock value gets t-ferred. It would be sooo much nicer if there was proper inventory functionality- even if were an add on for cost billed thru app store. Then @Wave could work for all of us.
Thanks for sharing that workaround @Torkrench, although I totally get that this isn't an ideal or intuitive workflow as-is.
COGS is in your Asset Accounts as +$20?
You need to start over and re-write, please. Tracking inventory units is not essential, but value of inventory is, so this is a subject I would like to learn in your software. I don't believe this article is not correct.