Set up COGS in Reckon One

Stephen Balson
Stephen Balson Member Posts: 26 ✭✭
edited September 2018 in Reckon One
I've just switched over to One from Hosted and I wanted to start looking at COGS. I hadn't use COGS in Hosted, so it's all new. I have tried searching the community and google and I understand the principals, but not sure how to set it up in One.

Can some one give me a hand please?
I'm using the new One, not silverlight.

This is what I have done as an experiment for bottles of water.
Added a new Account called COGS Bottles of Water. With account type of COGS.
Added a new item called Water COGS. That we buy and sell. Set Buy unit cost to $0.25 and Sell to $2.50. Set the account to COGS Bottles of Water (as above). Added a new buying invoice. Item as above and qty of 24. 24*0.25 = $6.
Added a new selling invoice. Using the item from above. Qty 10. 10*$2.50=$25.

Looking at a Profit and loss report for today, only the above transaction are entered for today, I see:
COGS Bottle of water -$19
Income $0
Gross profit $19 (positive)

So this is wrong. I have changed the item so that the sell account is water (income). The P&L is now:
Income: Water $25
COGS: COGS Bottle of water $6
Gross profit $19

This looks better, but shouldn't it be
Beginning Inventory + Inventory Purchases – End Inventory = Cost of Goods Sold
So I bought 24 bottles. Using the above shouldn't it be
0+24-14=10
10*$0.25 = $2.50

So Income $25
COSG $2.50
Gross Profit $22.50

Also how would I add inventory that I had before this purchase?
And how do I remove inventory that got stolen?

Thanks.





Comments

  • Rod_7542780
    Rod_7542780 Member Posts: 7
    edited December 2016
    Hi, the closing inventory requires a journal entry from you to reflect the true cost of sales, the entry would be debit stock on hand asset account in current assets of the balance sheet and credit closing stock COGS account. The reckon one is not designed to run a perpetual inventory and stock costing nor do they claim that as a feature, to supply a closing stock value. normally a business will do a stock take at the end of the financial year to work out an accurate GP and net profit. A stock-take will automatically adjust for shrinkage.as it wont be there to count.
  • cosmic
    cosmic Reckon Developer Partner Posts: 1,073 ✭✭✭
    edited September 2018
    Yes, RA1 is not ready for Inventory control, if you are seriously interested in maintaining a reasonable perptual inventory control , then RA premier would have been the best option.

    Cosmic Accounting Group

    Accountants and Tax Agents 22397009

  • Stephen Balson
    Stephen Balson Member Posts: 26 ✭✭
    edited July 2015
    Thanks guys. So One is not designed for stock tracking. Not an issue.So really the COGS account/item option is really just the same as having it an expense, as seen in my example above? Or did no not set it up correctly?
  • Rod_7542780
    Rod_7542780 Member Posts: 7
    edited December 2016
    Hi, You are correct, accounting for inventory when you are a retailer is essential to having an accurate PnL,and is required under tax law. Purchases for resale need to go in the COGS area of the pnl. Purchases and freight inwards are not expenses. They vary directly with the volume of sales.
  • Stephen Balson
    Stephen Balson Member Posts: 26 ✭✭
    edited July 2015
    Hi Rod. Thanks for the info.
    From the ATO web site I found this on Stocktakes:
    https://www.ato.gov.au/business/manage-your-invoices,-payments-and-records/stocktakes-and-assets/sto...#

    You will need to do a stocktake if:
    • your business turnover is greater than $2million, or
    • the difference between your stock level at the beginning and end of year is more than $5,000 (you can make a reasonable estimate to determine this).
    My business does not meet either of these criteria, so it appears that I don't need to keep inventory.