Inventory Levels on P&L

KE Paradise
KE Paradise Member Posts: 4
edited August 2019 in Reckon Accounts (Desktop)
We run Reckon with all our parts as inventory items.  We also have several mulitcurrency suppliers.

Our COGS purchasing account is Purchases
Our Sales account is Sales
Our Asset account is Stock on Hand - (Other Current Asset)
Accrual Basis

On the p&l  the cost of these items is only reflect after they are sold, not what we have purchased and paid for during the same period.  Therefore it's not really a true reflection, because we have purchased a whole lot of products but they are still sitting in the Stock On Hand ledger.  Is there a way around this?  

I am considering changing all my parts to have the asset account of 'Closing Stock' (there for a COGS account) so that my P&L is a truer picture of my business.  But could this have other implications?  I have saved a back up copy of the file and opened it in a new name as a test, then I was going to make this change.  But with about a thousand parts, its a big job if it doesn't work.  

I would appreciate any assistance or advice.

Comments

  • Michael Graham
    Michael Graham Member Posts: 9
    edited March 2015

    Your current P&L is a true reflection of your business as it only contains those costs of goods sole that are directly attributable to your income. You cannot accurately track Gross Margin if you don’t run a perpetual inventory system. The alternative is the Post all cost of goods sold to your P&L and then do an inventory adjustment at the end of each Qtr or month to determine your gross margin for that period. 

    I would suggest you have a conversation with your account on what is the most appropriate method of reporting for your business.

     

    Michael

  • KE Paradise
    KE Paradise Member Posts: 4
    edited September 2014
    So perhaps it would be pertinent for Reckon to allow for a 'include Stock on Hand in P&L' toggle button in the reports area so that you can get a true 'cash' profit and loss.   Doing journal adjustments each period is cumbersome. 
  • John G
    John G Reckon Staff Posts: 1,570 Reckon Staff
    edited February 2017
    Hi KE Paradise,

    Thanks for asking the Reckon Community.

    Accounts Business has two types of stock items:
    • Inventory Parts for Stock you track and are stored first in the Stock on Hand Balance Sheet account and transferred to COGS as you sell it, item by item.
    • Non-Inventory Parts, for Stock you do not keep track of.  These are charged to the COGS accounts immediately and in total.
    Do take note of Michael's and Kevin's comments above and do talk with your Accountant for the best way to apply these Stock types to your business.  

    regards,
    John


  • KE Paradise
    KE Paradise Member Posts: 4
    edited September 2014
    Thanks Gentlemen,

    As state in the first question we use mainly Inventory Parts.  I am speaking to my accountant and also another business that I know is experiencing a similar issue.

    Thanks
    Kari