Using Non-Inventory Items for Custom Ordered Items

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Posted on by mikepeck

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We have many custom ordered items that we don't want to set up as inventory because y=they would be used once and never again. We are thinking of setting up a single Item, with a Description 'SO' and will add the remainder of the Description as the items are entered on Sales Order Invoices. I tested this and it will record the Revenue and Receivables entries. The question is how to record the Cost of Goods Sold / Inventory part of the transaction. We are using a Purchase Order to buy the custom items, charging the costs to a clearing account in the same range as the Inventory, using the default Purchase Account for the few vendors the custome items are purchased from.

We tested adding a unit cost to the Sales Order Line, but with Items of Type 'Misc Charge' or 'Service' no change can be made to the Unit Cost field.

Can anyone suggest a set of Best Practice procedures for addressing these requirements>

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Justin Thorp 2,265 on at

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Hi Michael,

I suggest using "Non-Inventory" items. That is, when entering a line item on the sales order, just enter an item number that hasn't already been setup in Item Maintenance. You can then purchase the item (aka generate the PO), receive against the PO, transfer the Sales Order to an Invoice, then post the invoice. The invoice will post with the COGS amount from the PO.

Note: In SOP Setup, you may need to mark the checkbox to allow the entry of Non Inventory Items.

Thanks,

Justin

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Antony W 35 on at

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You could use NSTK item code , changing the description of the item each time on SOI for custom ordered items, and then MISC if you need to use misc charge or service items.

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L Vail 65,271 on at

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Michael,

I think Justin's answer will work the best for you. Since these are 'one up' items, I presume that you will need to issue a PO for each one. The single inventory item such as 'SO' (or anything) will not work as well for you and will generate information that is not valuable. In fact, I have found it to be confusing for customers who have tried this method. If you use the non-inventory part number, you can general relevant sales reports on the items sold via SOP.

Kind regards,

Leslie

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MBH 105 on at

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I have a client that also uses mostly non-inventory items. The problem we are facing now, is that at the end of a month some of these items have been received in but not yet shipped out. These items are not appearing on the Historical Inventory Trial Balance Report. They need a report to reconcile the inventory to the GL. Any thoughts?

Thanks

Mary Beth Hebert

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L Vail 65,271 on at

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If they are non-inventory, quantities are not tracked anywhere, so they are not supposed to be on any inventory reports. What debit account did you use when the items were received? These items will not appear on the stock status report. Did you debit the Inventory account when received, or was a COGS account used?

Kind regards,

Leslie

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