Hi, i just noticed that all vendors I am making, as well as invoices, are automatically posted in Inventory GL.
Could you help me with the setup, I need to assign GL account every time I will make an expense.
Thanks.
Hi Hazel,
That is a good question.
I have spent the last hour experimenting with Cronus in the demo system. As you will have found you cannot create a purchase order for a non-inventory item directly in the purchase order form; when I tried to create one for 'Window Cleaning, Head Office', I received an error message saying that was not an item (which, obviously, it isn't).
I then set up 'Window Cleaning' as a Service Item. This is a special category of items which you can buy and sell but which you cannot use in production. I know very little about them, but when you buy (or sell) them the debit goes to an expense account and the credit goes to accounts payable (or the debit goes to debtors and the credit goes to a sales account). There is no impact on inventory (stock does not get debited or credited by the value of the Window Cleaning) and you might use them if you were buying or selling services, or things that never come into your inventory (perhaps they go direct from supplier to customer).
After setting up the service item I was able to create a purchase order for it, print it and send it to my imaginary window cleaner / supplier. After the window cleaner had been round with his ladders and buckets I was able to put his invoice number into my purchase order and receive and post the p/o.
The result of this was a credit on the window cleaner's vendor card and a debit to a purchases account. Nothing was posted to the stock general ledger accounts. So far so good.
BUT, the issue that I have not been able to solve is that I am now left with 1 unit of window cleaning 'on hand'. It has no value and obviously it is not really there, but the item card shows it on hand. There does not seem to be any way of writing this off; [Adjust Inventory] doesn't work, because there is no inventory... Also, the other problem with this is that you would have to be very careful in setting up your posting groups, for all the things you want buy using purchase orders but do not hold in inventory; window cleaning, office cleaning, bulk tea-bags, sundry odds and ends, so that they post to the correct g/l purchase expense accounts. It could be a lot of work. I hope someone will come along shortly and give a better answer. (I'd also like to know if there is a way of adjusting the on-hand quantity of a service item, short of selling it to a customer at a price of zero.)
If I were in your position I think I'd be considering preparing my purchase orders for non-inventory items off system, perhaps using Word and Excel, or even using a pad of paper templates and a pen!
Sorry, not much help!
M
Thank you for this MalcolmS... how about the Purchase Order? How can I make a PO for a non inventory item?
Hello Hazel,
If you want to post a vendor invoice without anything happening in inventory you could do this by using a General Journal. You would select the document type to be 'invoice' and the account type to be 'vendor', allowing you to choose any of your existing vendors. You are then able to choose which G/L account (any in your chart of accounts) you post the debit / expense to.
I hope this helps.
M
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