Inventory for Produced Items and Price Fluctuations

travis88

Right now we track all sales through invoices, and all items have their own sales/income account.

We would like to start using the inventory accounts to show asset values in stored inventory.

In our agriculture-based business, we produce our inventory without having an exact associated expense item for COGS (although it exists, it is in about 20 different accounts and not realized at the time the inventory is gained).

What would be the best practices for this to ensure that invoices still use the same items and income accounts, and also allows us to increase our inventory amount as we harvest? Should we create a "ghost" expense account that we use to add inventory? It would need to be an account type that wouldn't affect our other metrics and numbers in reports.

Also, what do we do to make modifications to the inventory value account when prices fluctuate. Obviously we would reduce inventory by the number of units sold or lost, but this would also need to occur when expected or realized pricing changes.

ConnorM

Hey @travis88! Thanks for reaching out here. Wave's Support Specialists are able to provide technical support, but because we aren't accountants, we aren't able to provide accounting advice. While we are able to tell you how to do something in Wave, we aren't able to necessarily tell you the right way of doing it when it comes to the principles of accounting.

I would highly recommend reaching out to a registered CPA to ensure that you don't get incorrect advice on how to do your accounting.