Hi all, wondering if anyone has dealt with accounting for zero cost inventory. We "purchase" used tires, often for no money at all, and later sell them for a cash amount much less than that of a new tire. Does anyone know the proper way to account for this, both the "purchase" transaction and the sale transaction?
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Hi there,
I believe that I have a solution for you.
1) Create the relevant item with the following configuration:
-Costing method : Average; this is to account for the fluctuation in cost,
-Unit cost = 0.00
-Unit price = 0.00
-Select the Gen. Prod and VAT. Prod posting groups that apply to your situation,
-Create a dummy vendor and apply to the item,
-Ensure the remaining, important information is completed.
-If you are multiple variants of the items, such as different sizes, you will need you use the variants and stock keeping units functionality.
2) Create a purchase order against the dummy vendor.
-Enter the vendor's correct details into the purchase order (General, Invoicing tabs),
-Add a purchase line for the item in question and define the "direct unit cost" (If 0.00 then leave blank) and a quantity.
-Define a "Qty.To Receive".
-Click functions > Release,
-Click Posting > Print and post > Receive and invoice.
At this stage you will have a zero cost inventory for the item. Now all that is left to do is to create and post a sales order.
3) Create a sales order,
-Define the customer: you may need to create the relevant customer(s), however there are two options:
1.Create a new customer record each time you sell the product to a different person.
2. Create a generic customer which can be used to post all sales against.
-The application method (Invoicing tab) for the customer should be set to "Apply to oldest". This will ensure that you do not have to complete application postings between the customer ledger entries and the posted sales invoices.
-Create sales lines within the sales order for the items you are selling; define the relevant item variant where applicable.
-Define the "unit price" and quantity,
-Click functions > Release,
-Click Posting > Print and post > Shipment and invoice.
Once you have posted the sales shipment and invoice; the item's inventory will reduce and the relevant value postings will be applied to the G/L accounts which are linked to the item's posting groups.
Hope this helps!
Either you can go with G/L account or you can purchase with zero value by enabling Inventory value zero on item card
Hi jcaff
it depend on how you need do accounting for the given scenario if you need to handle inventory, sales & purchase then you need to configure items.
if you don't want' to have inventory then you can use purchase & sales journals for accounting entries only.
it totally up to you how you wan't handle accounting situation once decide that if you need any help on Navision you can raise a question.
Hi jcaff ,
there are two way to in item to the inventory
1. Purchase Order
2. Item journal
On your case your tires are receive like free inst it , so.. either you can use above 2 option to in your stock to system
1. Purchase Order
If you use this ... you have to create vendors from receiving , if there is no vendor you can create a dummy vendor on your vendor card and use it
other thing is cost in line tab : if you receive it as free you can use "Line Discount%" as 100(100%) then it will be in without cost
2. Item journal
you can just in the received quantity to your stock location by Positive adjustment
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On your sales then you can use the sales order and do the sale as proceeding like general sales order
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