From what I understand, to track this in Wave, you'll need to create a COGS expense account to track the expenses you incurred to make your product. Next, you'll want to record your product under Sales > Products & Services at your desired value (using your example, $1,000.00) and assign it an income account. Then, when you want to record the sale of your product, you will need to include it as an item line on an invoice. When the invoice is "Paid" the income will be allocated to your product's income account. With this method, your profit and loss report with include the expenses incurred and total product sales income leaving you with the profit you made. With that being said, please note that we here at Wave Support are note accountants so I suggest reaching out to a professional CPA to further guidance to ensure your books are accurate.
Does WAVE ever have plans to make it simpler to track inventory, like a true POS type way?
Wouldn't it just be easier than having people go through so many steps to only track the $ portion?
The work around doesn't account for qty of product?
In your example of a Muskoka Chair the account holder has no way of knowing if that was 10 chairs brought into inventory or 8. Why not just allow for a simpler way of tracking? I would 100% pay for a true inventory tracking program vs crazy work arounds.
@AndreasSagar@Cheart99 I found this article from an accountant online that has helped me adapt Waves to work in this manner (I have a homestead and am using it for that purpose but the idea is the same). His article refers to using it in QuickBooks but, so far, the adaptation has worked for me in Waves as well; you have to do a little interpretation because the systems are different but the principle is pretty similar. I've only made a few entries at this point so hopefully it will continue to work. https://www.intuitiveaccountant.com/niche-markets/Posting-farm-production-into-quickbooks-inventory-part-1/
I am new to this and thoroughly confused with "Recording the purchase of inventory" part when buying with a bill:
If I buy inventory with a bill and create a product to populate the bill, I can only attach an Expense type of Account to the product and not an Inventory type Account.
Now, when I pay that bill, the value of the purchased product is classified under that expense account linked to the product and not as Asset Inventory.
It seems I cannot complete the purchase with a bill and have my products classified as Inventory, like in your example where you purchase without a bill.
What am I doing wrong or missing here?
Edit: I have discovered that I can go to Transactions and change the Category from Bill #12345 etc.--> to the Inventory account I created as per your workflow. Is this what I need to do before I continue with the workflow?
Thanks
If you are using a bill to record your purchase, you may be able to use a journal transaction to allocate the funds to your asset inventory account. Otherwise, you will simply have to record your expense as a transaction without a bill. You can learn more about journal transactions here:
Please keep in mind that this is only a workaround and to ensure a journal transaction will suffice and be accurate in this case, I suggest reaching out to a CPA for accounting advice as we here at Wave Support are not accountants.
I came across the below question which is similar to my issue with Wave. I didn't see a great response to this question. Can any one help?
We make and sell solar lamps. We have several accounts under Expenses - COGS like electrical components, material components, different supplies to build our lamps etc, basically anything used to piece together our final product which is a lamp.
So when we go out and buy this material, let's say we purchase 100usd worth of electrical components, 100usd worth of glue and 100usd worth of other assembly materials, all have their own separate accounts under Expenses - COGS. This is exactly what we need as it tracks all that which we spend that goes towards making our lamps.
When a lamp has been assembled, its given a serial number and it waits on a shelf to be sold, and as soon as it gets sold we simply record a Sale which goes to an account in our Income section.
However, I need to use the Inventory account to track the lamps as Assets on our balance sheet. How can I link the Inventory Account to our expense COGS accounts and then our Sales Income accounts?
I hope I have made myself clear, thanks in advance for the help!
From what I understand, the Recording the sale of inventory section of this Help Center article should help you achieve this result. The journal entry should help you debit your inventory COGS accounts (this should still work if you plan to select multiple COGS accounts) and credit your inventory asset account. This will then ultimately be reflected on your Balance Sheet. The sale transaction itself will keep track of the sale (income) while the journal entry will keep track of the rest. I hope this helps!
Comments
Hey @Cheart99 !
From what I understand, to track this in Wave, you'll need to create a COGS expense account to track the expenses you incurred to make your product. Next, you'll want to record your product under Sales > Products & Services at your desired value (using your example, $1,000.00) and assign it an income account. Then, when you want to record the sale of your product, you will need to include it as an item line on an invoice. When the invoice is "Paid" the income will be allocated to your product's income account. With this method, your profit and loss report with include the expenses incurred and total product sales income leaving you with the profit you made. With that being said, please note that we here at Wave Support are note accountants so I suggest reaching out to a professional CPA to further guidance to ensure your books are accurate.
Does WAVE ever have plans to make it simpler to track inventory, like a true POS type way?
Wouldn't it just be easier than having people go through so many steps to only track the $ portion?
The work around doesn't account for qty of product?
In your example of a Muskoka Chair the account holder has no way of knowing if that was 10 chairs brought into inventory or 8. Why not just allow for a simpler way of tracking? I would 100% pay for a true inventory tracking program vs crazy work arounds.
Hey @Susanna13 , in full transparency, Wave does not have any plans at the moment to offer a product for inventory tracking.
@AndreasSagar @Cheart99 I found this article from an accountant online that has helped me adapt Waves to work in this manner (I have a homestead and am using it for that purpose but the idea is the same). His article refers to using it in QuickBooks but, so far, the adaptation has worked for me in Waves as well; you have to do a little interpretation because the systems are different but the principle is pretty similar. I've only made a few entries at this point so hopefully it will continue to work. https://www.intuitiveaccountant.com/niche-markets/Posting-farm-production-into-quickbooks-inventory-part-1/
I am new to this and thoroughly confused with "Recording the purchase of inventory" part when buying with a bill:
If I buy inventory with a bill and create a product to populate the bill, I can only attach an Expense type of Account to the product and not an Inventory type Account.
Now, when I pay that bill, the value of the purchased product is classified under that expense account linked to the product and not as Asset Inventory.
It seems I cannot complete the purchase with a bill and have my products classified as Inventory, like in your example where you purchase without a bill.
What am I doing wrong or missing here?
Edit: I have discovered that I can go to Transactions and change the Category from Bill #12345 etc.--> to the Inventory account I created as per your workflow. Is this what I need to do before I continue with the workflow?
Thanks
Hey there @Patrix !
If you are using a bill to record your purchase, you may be able to use a journal transaction to allocate the funds to your asset inventory account. Otherwise, you will simply have to record your expense as a transaction without a bill. You can learn more about journal transactions here:
Please keep in mind that this is only a workaround and to ensure a journal transaction will suffice and be accurate in this case, I suggest reaching out to a CPA for accounting advice as we here at Wave Support are not accountants.
Hi,
I came across the below question which is similar to my issue with Wave. I didn't see a great response to this question. Can any one help?
We make and sell solar lamps. We have several accounts under Expenses - COGS like electrical components, material components, different supplies to build our lamps etc, basically anything used to piece together our final product which is a lamp.
So when we go out and buy this material, let's say we purchase 100usd worth of electrical components, 100usd worth of glue and 100usd worth of other assembly materials, all have their own separate accounts under Expenses - COGS. This is exactly what we need as it tracks all that which we spend that goes towards making our lamps.
When a lamp has been assembled, its given a serial number and it waits on a shelf to be sold, and as soon as it gets sold we simply record a Sale which goes to an account in our Income section.
However, I need to use the Inventory account to track the lamps as Assets on our balance sheet. How can I link the Inventory Account to our expense COGS accounts and then our Sales Income accounts?
I hope I have made myself clear, thanks in advance for the help!
Hey @Bebe !
From what I understand, the Recording the sale of inventory section of this Help Center article should help you achieve this result. The journal entry should help you debit your inventory COGS accounts (this should still work if you plan to select multiple COGS accounts) and credit your inventory asset account. This will then ultimately be reflected on your Balance Sheet. The sale transaction itself will keep track of the sale (income) while the journal entry will keep track of the rest. I hope this helps!