Already Set-up inventory tracking but still thinks there must be something wrong-tell me what it is?
araz512
Member Posts: 1
Hi,
I am knew to wave. In my current post, I would ask questions where I need some help and also ask clarification on setting up inventory tracking (which I already did) since the problem can link to it.
After a lot of hit and trial, I end up setting up inventory tracking.
In order to set-up inventory I:
1) Added inventory account in "Assets" section with the name of product say "X".
2) After setting it up, I enabled product "X" for selling. While enabling it, I listed "Sales" account for this product.
3) Now I sell product "X" - to customer "ABC"
I suppose every thing is correct till here....right?
Issue: Now when I sell product "X" with the invoice worth 200000, I see strange numbers in balance sheet (mentioned below):
i) Account receivable of worth Rs. 200000 - that is understandable since invoice is made as part of "sales" account.
ii) but there is no reduction in total inventory .... why it is so?
iii) I also read on site.... it might require journal entry for every sale I mad like this...is it true? if so, in what form I make journal entry?
As explained above, I am new to wave. Please let me know If i have made any errors in setting up inventory to its sales process as well.
Thanks.
Comments
@araz512,
Wave does not do inventory tracking. Meaning, it does not automatically credit inventory for a sale. Your first part is correct. I have clients with inventory and the easiest way to handle inventory in my opinion is as follows:
If you are just starting out, your opening inventory would be zero. As you purchase items for resale I would expense each purchase under Purchases. At the end of your fiscal year look around the shop and determine the cost of what you have on hand. Do the following journal entry. Debit Inventory and credit Purchases. You now have adjusted you income statement for the cost of items sold. The Inventory account cost is stated on your balance sheet. Next fiscal year, repeat the process. Expense all Purchases and adjust inventory to the correct balance. You may need to credit inventory if it is lower than the prior year or debit if it is higher. Hope that helps.
Awesome, thanks @Mikeg