Hey @Deepak_Patil I've moved your post into this ongoing discussion because there is definitely some strategies included here that would help you out.
@EmmaP said:
Hi @avaloncompanyllc! In this case you can still follow the steps in the guide. Categorize the initial 'purchase' transaction from your credit card to the asset account created for the inventory. When you categorize a payment to your credit card you can follow the steps in this Wave guide to do so: Categorizing a credit card payment.
I think I might be missing something, or misunderstanding.
1.) I request an approve a quote from a vendor, and enter a copy of the bill for good they are going to produce for me into the system. This places the balance into (accounts payable).
2.) Sometimes this requires partial payment up front (50% of production costs). I make a payment on my credit card for the amount. Whether I input this payment to the bill, or use my synced bank account to link the payment, it pulls that amount from my accounts payable, and debits my cash(bank) account.
However, how do I then turn around and apply this accurately to my inventory account?
If I don't use the bills, and use Journal Entries, it obviously works, but it does kind of render the bills aspect in this case useless? Or is there a way that I can mark a bill as paid and not have the payment try to re-log to the bank account so I can categorize the synced transaction to inventory?
Hello. I have an issue with reconciling Bills and Inventory assets.
I have a vendor supplying inventory which I do not have to pay for right away. but it does not show up under my inventory assets when I record a payment on the said bill. Hope my explanation is clear.
How do I enter this correctly? That is post it under inventory and still have it as an unpaid bill.
In this case I'd likely create a holding asset account for these payments which you can mark the bill payments to. Once the payment has been taken out of your account, you can just make a transfer from that holding account to your checking account (or whichever account your funds come from). Hopefully this makes sense, but I'd recommend reaching out to an accountant for further assistance!
hi, i'm buying items and then reselling them, is there away to track each sales order profit and loss, i.e if i'm buying 20 camera for $100 each , assuming i have done a sale for three camera's with a total of $360, and then again another sale for 10 cameras with a total of 1,100, so i would like to know that i have made $60 on the first order and $100 in the second order. so basically tracking the profit and loss per sales order and not overall
@Aref At this time, Wave doesn't offer project/order-based accounting and will only provide totals in our Reports section. You can use the method that we have for inventory tracking to extend to projects/orders but this will require some set up on your part as well as keeping a detailed eye to properly account for each project/order.
Hi,
There is something I don't get.
I'm managing a paw shop so i'm buying stuff and selling them at a different price.
So let's say I bought 100$ that I add to inventory A and want to sell it later
I add an expense in my cash account, put inventory A as a categoy. Wave transfer the "fund" from cash to inventory, all good for now.
Then when I make a sell to customer ABC from inventory A, it add to my cash. All good still, every is recorded including the new price I got from this item.
But it's after I'm lost. I need to take off the original value of the item from inventory A as I don't have it anymore. The only way I see is to create a withdraw transaction manually equivalent to his original value from inventory A. If I use the journal transaction tools it only transfer it to Cost of Goods which is not what I want because I end up with a "double" entry in my account. The money I made from the sell and the item itself remain.
Thanks,
Alex.
Good question! Your right on the money with the first two steps, and at that point, there is one more step that you need to take in order to devalue/decrease the asset account in the amount of the item that was sold (let me know if that doesn't make sense).
Every time you make a sale of one of your inventory items you'll need to:
1. Record the deposit/income transaction to your bank and categorize accordingly (most likely as a Sale).
2. Create a corresponding journal transaction that will credit your asset account (the inventory), and debit the Cost of Goods Sold expense account.
Doing so will decrease the inventory account, and increase the Cost of Goods Sold account. The Cost of Goods sold account simply represents all of the expenses that relate to sales that your business has incurred.
So if you purchased an asset for $100, the balance of the Cost of Goods Sold account would increase by $100. On the other hand, when you sell the asset, the balance of the Cost of Goods Sold does not decrease by $100. At the end of a period, you should be able to look at the balance of the Cost of Goods Sold account to track how much it cost your business to generate the amount of income received during the same period.
In other words, the Cost of Goods Sold represents a total (usually only increases), while the asset account represents the fluctuation of inventory (usually goes up and down).
I bought two widgets from a distributor, one was $1.02 and the other was $5.54. I entered the receipt like a bill thinking it would add to my COGS account but it did not. When I entered this way, my COGS $6.46 in this case did not show up as assets. Why even enter Inventory purchased on BILLS if it does not show up as an asset? I later added those items to an invoice with a markup and it showed correctly. Is the BILL function not supposed to be used to enter inventory? I run a pool business so I can not have a different ASSET category for each item, however,would it make sense to split them into different groups? inventory-Chemicals and expense- chemical - COG, inventory-parts and expense-Parts-COGS, etc.
Hmm...this seems like it's require a huge amount of manual entries. Inventory, as a function, for some reason is the hardest thing to find (even on the expensive sites). I currently track mine using a self built php/MySQL script-database, but while I know scripting, I wouldn't know where to begin to utilize it for anything automated hence looking for software.
On mine, I enter into a form I built the sku of the product I sold, the fees from whichever marketplace it sold on etc etc. I use average cost as my charge off method rather than FIFO. The script is simple but very effective at tracking my inventory value and levels. It's curious as to why a simple inventory system isn't part of virtually every accounting software to me when it's such an important asset.
As you mentioned when it comes to COGS you cannot use a bill to enter your transaction at this time. In the article it mentions using expense transactions, so at this time I'd recommend doing this!
Your custom script data-base sounds great. Wave is truly considered a manual tool that can be used to do a lot as long as you know the accounting behind it then you should be able to create these transactions manually. The automation behind it has not yet been implemented in our software but it's something I hope to see soon!
Hey @Jieyi_5 , because the article above gives you a very specific way to handle inventory, it's a method that works with some pre-existing functionality in Wave. This means that Wave wasn't intended to have an in-depth inventory entry and tracking system so we aren't able to handle the automatic cost changes that you're looking to track.
Informative, But i have a little inquire , lets say I made discount for my customers , in this case i should create an expense entry with the money i received for my customer (AFTER DISCOUNT) and then create a journal entry with the actual value of the goods sold so it get Subtracted from my inventory balance ??
I’m a bit confused. I have used cash at hand to purchase Inventory items. When I upload the receipts I can choose the payment account as either Cash At Hand or cost of goods sold.
Cash at hand is correct but I ultimately want these items to appear as Inventory.
I think I must be missing something. I’ve gone through the steps, read them numerous times and still can’t get it to work. I have created an inventory account for the specific item I have purchased (to be resold). I then created a COGS expense account as described in the instructions. After a customer sale, I created a journal transaction debiting and crediting the appropriate inventory and COGS accounts but the balance sheet only shows the Inventory account. I can’t seem to get the COGS account to show up. What am I doing wrong?
Our system doesn't actually track items as inventory unfortunately, only value of goods purchased and sold.
As long as you're categorizing the expense transactions to your inventory account, then when you create the journal transaction, it should reduce the amount of that expense.
Each time you make an inventory sale and either match to an invoice or categorize this into income, you will also have to record a journal transaction to decrease your asset inventory account and account for Cost of Goods Sold. You will need to use the Journal Transactions tool in the Transactions page.
Yes, I have created the expense account as a COGS account. Regarding the second point, I am very confused. The instructions in the original article specifically say to record the initial inventory purchase, you should add the expense and categorize it into your inventory asset account - not the COGS account. I am new at this so I apologize if I am overlooking something.
I've omitted the previous post since it was incorrect, my sincere apologies for the confusion.
Let me walk you through the steps here which I believe to be correct now!
Create an asset inventory account.
Create an expense COGS account
Record the initial purchase to the inventory account (as you mentioned above and in the article). In my example we're selling toys, but I need to buy the parts first.
Then you'll receive a Sale, you might record this through an invoice or just an income transaction, either way, categorize it to your income account. This step isn't really important in inventory tracking, it's most for your own accounting purposes.
Record a journal transaction debiting the cogs account and crediting the inventory account.
This will show up in your books as a $200 debit to your account, but will begin to balance with every Sale Journal transaction you make.
Please let me know if this helps, or if you think this is incorrect for what you're trying to achieve.
I am a new user of the Wave Apps. I am basically a computer sales and services business person. I buy computers or computer spares and then resell it. I would like to keep track of what I am buying and at what price and what I am selling and how much I sell it for so I know what profit margin I make out of that product that I resell. Can someone please help me to choose the appropriate menu or module in Wave where I will be able to do it so I get to do it the right way ?
Thank you so much! The response to Nicole7884 mostly answered my question too!
The part that is missing for me is around how to match a receipt that I've imported with an account transaction that I've categorised as you describe in Part 3 below.
When I go to the receipt (uploaded through the app) I can't choose Inventory as the category which is what I think I need to do.
My plan from there was to merge the two transactions in transactions.
First off welcome to Wave and to our community! Glad to see you posting and asking important questions.
I've merged your question in our help center article discussion on SIMPLE INVENTORY TRACKING. I believe that this will give you a good breakdown on how to track your inventory for resale, but if you have any other questions take a read through this thread or ask us some followups!
I am afraid I am still very confused.
Sorry.
New to this and I would like to get a good grasp.
I am baking and selling..
So if a shortbread has flour, sugar and butter, but I am not using the entire bar of butter for one batch of cookies. Let's say I am using half the butter, 3% of the sugar purchased, and 10% of the flour purchased.
I would like to know what is the profit I am making from the sale of this one batch. I see that I am profitable coz I am not in the red, but there are other things to account for, packaging for example.
How do I add these and their prices in the cost of the goods so I can better know how profitable I am.
Hi @Souley , thanks for your message. What you'd need to do in this case is create Cost of Goods Sold & Asset accounts for each of the items you use in your batch, if you would like to track it on a granular level like this.
So for example:
First, make the accounts. Head to Accounting > Chart of Accounts > Add a new account (top right corner). Add an Asset and Cost of Goods Sold (COGS) account for each inventory item, e.g., Butter.
You buy a stick of butter for $5.00. You categorize this purchase to your Butter Asset category.
You make a batch of cookies and use 1/5 of the butter, so, $1.00 worth of butter assets.
You sell the cookies for $10.00, which could be categorized to Sales or another income account.
You then need to do the final step of tracking inventory in Wave, the journal transaction. This journal will represent that $1.00 of butter in the cookies, subtracting it from the net profit. You would debit the Butter Asset category by $1.00 and credit the Butter Cost of Goods Sold (COGS) category. This shows the $1.00 leaving the Asset and entering the COGS, and your net profit would be $9.00 (before other expenses).
Hi Katie and Team,
I clicked the helpful button! I was back using Wave to update my invoicing today and tried to google search the "long" awaited - hot to add inventory to waveapps?
And here we have it, appeared just few days back in this article.
Well, generally, i guess i understood. However i will point out that users would need quite some knowledge and experience in the accounting world to get through the steps to set up the Inventory Assets but then again you will have to journal a transaction.
Guys, Wave Accounting has been around for ages now and many of us, users, have been using this brilliant and simple and very intuitive accounting platform for many many years.. there is no ways talking about any negative issues with Wave Apps.
But why can't you guys "just" add a counter to the products list?
When someone add a product, as a sale item for example, a Quantity counter could be added which would also be used to decrease that counter from the value you set when making a sale invoice!
Obviously for me it looks simple, but i would also understand that Wave Being Free, we cannot have all options we desire.
I will happily pay a fee if needed to have an Inventory plugin!
And Again though, this is technically not complicated to perform. Just a counter field for all available products and it should be good for all users.
One more thing which comes in mind is that the products which are added at Purchase and Sale are not necessary linked.
Not sure if that has changed over the years.
Comments
Hey @Deepak_Patil I've moved your post into this ongoing discussion because there is definitely some strategies included here that would help you out.
Hey there @morag
Your journal transaction should look like this:
The debit on the top line is the expense account
and the credit on the bottom line is the inventory account
I think I might be missing something, or misunderstanding.
1.) I request an approve a quote from a vendor, and enter a copy of the bill for good they are going to produce for me into the system. This places the balance into (accounts payable).
2.) Sometimes this requires partial payment up front (50% of production costs). I make a payment on my credit card for the amount. Whether I input this payment to the bill, or use my synced bank account to link the payment, it pulls that amount from my accounts payable, and debits my cash(bank) account.
However, how do I then turn around and apply this accurately to my inventory account?
If I don't use the bills, and use Journal Entries, it obviously works, but it does kind of render the bills aspect in this case useless? Or is there a way that I can mark a bill as paid and not have the payment try to re-log to the bank account so I can categorize the synced transaction to inventory?
Hello. I have an issue with reconciling Bills and Inventory assets.
I have a vendor supplying inventory which I do not have to pay for right away. but it does not show up under my inventory assets when I record a payment on the said bill. Hope my explanation is clear.
How do I enter this correctly? That is post it under inventory and still have it as an unpaid bill.
Hey there @JBassey
In this case I'd likely create a holding asset account for these payments which you can mark the bill payments to. Once the payment has been taken out of your account, you can just make a transfer from that holding account to your checking account (or whichever account your funds come from). Hopefully this makes sense, but I'd recommend reaching out to an accountant for further assistance!
hi, i'm buying items and then reselling them, is there away to track each sales order profit and loss, i.e if i'm buying 20 camera for $100 each , assuming i have done a sale for three camera's with a total of $360, and then again another sale for 10 cameras with a total of 1,100, so i would like to know that i have made $60 on the first order and $100 in the second order. so basically tracking the profit and loss per sales order and not overall
@Aref At this time, Wave doesn't offer project/order-based accounting and will only provide totals in our Reports section. You can use the method that we have for inventory tracking to extend to projects/orders but this will require some set up on your part as well as keeping a detailed eye to properly account for each project/order.
Hi,
There is something I don't get.
I'm managing a paw shop so i'm buying stuff and selling them at a different price.
So let's say I bought 100$ that I add to inventory A and want to sell it later
But it's after I'm lost. I need to take off the original value of the item from inventory A as I don't have it anymore. The only way I see is to create a withdraw transaction manually equivalent to his original value from inventory A. If I use the journal transaction tools it only transfer it to Cost of Goods which is not what I want because I end up with a "double" entry in my account. The money I made from the sell and the item itself remain.
Thanks,
Alex.
Hey @Alex75!
Good question! Your right on the money with the first two steps, and at that point, there is one more step that you need to take in order to devalue/decrease the asset account in the amount of the item that was sold (let me know if that doesn't make sense).
Every time you make a sale of one of your inventory items you'll need to:
1. Record the deposit/income transaction to your bank and categorize accordingly (most likely as a Sale).
2. Create a corresponding journal transaction that will credit your asset account (the inventory), and debit the Cost of Goods Sold expense account.
Doing so will decrease the inventory account, and increase the Cost of Goods Sold account. The Cost of Goods sold account simply represents all of the expenses that relate to sales that your business has incurred.
So if you purchased an asset for $100, the balance of the Cost of Goods Sold account would increase by $100. On the other hand, when you sell the asset, the balance of the Cost of Goods Sold does not decrease by $100. At the end of a period, you should be able to look at the balance of the Cost of Goods Sold account to track how much it cost your business to generate the amount of income received during the same period.
In other words, the Cost of Goods Sold represents a total (usually only increases), while the asset account represents the fluctuation of inventory (usually goes up and down).
@Kristian_G thank you very much for your time and help! It makes sens. I think it works fine now ^^
I bought two widgets from a distributor, one was $1.02 and the other was $5.54. I entered the receipt like a bill thinking it would add to my COGS account but it did not. When I entered this way, my COGS $6.46 in this case did not show up as assets. Why even enter Inventory purchased on BILLS if it does not show up as an asset? I later added those items to an invoice with a markup and it showed correctly. Is the BILL function not supposed to be used to enter inventory? I run a pool business so I can not have a different ASSET category for each item, however,would it make sense to split them into different groups? inventory-Chemicals and expense- chemical - COG, inventory-parts and expense-Parts-COGS, etc.
On mine, I enter into a form I built the sku of the product I sold, the fees from whichever marketplace it sold on etc etc. I use average cost as my charge off method rather than FIFO. The script is simple but very effective at tracking my inventory value and levels. It's curious as to why a simple inventory system isn't part of virtually every accounting software to me when it's such an important asset.
Hey there @TODavid69
As you mentioned when it comes to COGS you cannot use a bill to enter your transaction at this time. In the article it mentions using expense transactions, so at this time I'd recommend doing this!
Hey @The_UniDragon
Your custom script data-base sounds great. Wave is truly considered a manual tool that can be used to do a lot as long as you know the accounting behind it then you should be able to create these transactions manually. The automation behind it has not yet been implemented in our software but it's something I hope to see soon!
Hi, if my inventory costs changes across month, how can I get the COGS amount for my inventory using FIFO?
Thanks!
Hey @Jieyi_5 , because the article above gives you a very specific way to handle inventory, it's a method that works with some pre-existing functionality in Wave. This means that Wave wasn't intended to have an in-depth inventory entry and tracking system so we aren't able to handle the automatic cost changes that you're looking to track.
Informative, But i have a little inquire , lets say I made discount for my customers , in this case i should create an expense entry with the money i received for my customer (AFTER DISCOUNT) and then create a journal entry with the actual value of the goods sold so it get Subtracted from my inventory balance ??
Hi @Steveal3aneef , check out our Help Center article on how to show a discount on an invoice. Knowing this process should help answer your question.
I’m a bit confused. I have used cash at hand to purchase Inventory items. When I upload the receipts I can choose the payment account as either Cash At Hand or cost of goods sold.
Cash at hand is correct but I ultimately want these items to appear as Inventory.
I’m not really sure what I should be doing!
Does this make sense?
I think I must be missing something. I’ve gone through the steps, read them numerous times and still can’t get it to work. I have created an inventory account for the specific item I have purchased (to be resold). I then created a COGS expense account as described in the instructions. After a customer sale, I created a journal transaction debiting and crediting the appropriate inventory and COGS accounts but the balance sheet only shows the Inventory account. I can’t seem to get the COGS account to show up. What am I doing wrong?
Hey there @HannahP
Our system doesn't actually track items as inventory unfortunately, only value of goods purchased and sold.
As long as you're categorizing the expense transactions to your inventory account, then when you create the journal transaction, it should reduce the amount of that expense.
Each time you make an inventory sale and either match to an invoice or categorize this into income, you will also have to record a journal transaction to decrease your asset inventory account and account for Cost of Goods Sold. You will need to use the Journal Transactions tool in the Transactions page.
Hi @Nicole7884
OMIT
Yes, I have created the expense account as a COGS account. Regarding the second point, I am very confused. The instructions in the original article specifically say to record the initial inventory purchase, you should add the expense and categorize it into your inventory asset account - not the COGS account. I am new at this so I apologize if I am overlooking something.
Hey again @Nicole7884
I've omitted the previous post since it was incorrect, my sincere apologies for the confusion.
Let me walk you through the steps here which I believe to be correct now!
This will show up in your books as a $200 debit to your account, but will begin to balance with every Sale Journal transaction you make.
Please let me know if this helps, or if you think this is incorrect for what you're trying to achieve.
Hi,
I am a new user of the Wave Apps. I am basically a computer sales and services business person. I buy computers or computer spares and then resell it. I would like to keep track of what I am buying and at what price and what I am selling and how much I sell it for so I know what profit margin I make out of that product that I resell. Can someone please help me to choose the appropriate menu or module in Wave where I will be able to do it so I get to do it the right way ?
Thanks,
Sundar
Great, thank you so much for your help!
Thank you so much! The response to Nicole7884 mostly answered my question too!
The part that is missing for me is around how to match a receipt that I've imported with an account transaction that I've categorised as you describe in Part 3 below.
When I go to the receipt (uploaded through the app) I can't choose Inventory as the category which is what I think I need to do.
My plan from there was to merge the two transactions in transactions.
Thank you so much for your help.
Hey there @Sundar
First off welcome to Wave and to our community! Glad to see you posting and asking important questions.
I've merged your question in our help center article discussion on SIMPLE INVENTORY TRACKING. I believe that this will give you a good breakdown on how to track your inventory for resale, but if you have any other questions take a read through this thread or ask us some followups!
Hey @HannahP
You're correct in assuming that cannot assign an inventory category to your mobile receipt upload unfortunately
You'll have to forgo the receipt upload here.
My apologies about this!
Hello All
I am afraid I am still very confused.
Sorry.
New to this and I would like to get a good grasp.
I am baking and selling..
So if a shortbread has flour, sugar and butter, but I am not using the entire bar of butter for one batch of cookies. Let's say I am using half the butter, 3% of the sugar purchased, and 10% of the flour purchased.
I would like to know what is the profit I am making from the sale of this one batch. I see that I am profitable coz I am not in the red, but there are other things to account for, packaging for example.
How do I add these and their prices in the cost of the goods so I can better know how profitable I am.
Hi @Souley , thanks for your message. What you'd need to do in this case is create Cost of Goods Sold & Asset accounts for each of the items you use in your batch, if you would like to track it on a granular level like this.
So for example:
First, make the accounts. Head to Accounting > Chart of Accounts > Add a new account (top right corner). Add an Asset and Cost of Goods Sold (COGS) account for each inventory item, e.g., Butter.
Hi Katie and Team,
I clicked the helpful button! I was back using Wave to update my invoicing today and tried to google search the "long" awaited - hot to add inventory to waveapps?
And here we have it, appeared just few days back in this article.
Well, generally, i guess i understood. However i will point out that users would need quite some knowledge and experience in the accounting world to get through the steps to set up the Inventory Assets but then again you will have to journal a transaction.
Guys, Wave Accounting has been around for ages now and many of us, users, have been using this brilliant and simple and very intuitive accounting platform for many many years.. there is no ways talking about any negative issues with Wave Apps.
But why can't you guys "just" add a counter to the products list?
When someone add a product, as a sale item for example, a Quantity counter could be added which would also be used to decrease that counter from the value you set when making a sale invoice!
Obviously for me it looks simple, but i would also understand that Wave Being Free, we cannot have all options we desire.
I will happily pay a fee if needed to have an Inventory plugin!
And Again though, this is technically not complicated to perform. Just a counter field for all available products and it should be good for all users.
One more thing which comes in mind is that the products which are added at Purchase and Sale are not necessary linked.
Not sure if that has changed over the years.
Cheers and Stay Safe!
Muzafar Rusooly
mfx digitals