Sundry (misc) sales items - Should they be Inventory or Non-inventory?

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We have a "SUNDRY" sales item setup for when we get in a one off product for a customer.
This would be an item we would not normally stock and do not need to load on the item list.

It is currently setup as an "Inventory" item which means that quantites are tracked.
Should this item rather be a "Non-inventory" item?

If so, we would obviously need the "This item is purchased for and sold to a specific customer:job" checkbox ticked so we can enter the sales income account etc.

I have a feeling we were possibly told to set it up the way it is (Inventory item) but I can't remember why.


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Andrew

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Posted 4 weeks ago

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Toni

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I would advise for you to leave as an Inventory Item - it is a good tracking tool to ensure that all that you purchase is also sold at the correct quantities - and it should always have a zero balance.
I use the same process for our one off products and it would be a bit of a nightmare for me reconcile each month if there were no quantitiies recorded.
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Sue Renouf

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Hi Andrew,

I have found that having an item that varies in price in inventory is a trap in Reckon.  If the cost of goods sold is averaged over the items and one costs $1 and the other $1000, the cost of goods sold for the $1 is hundreds of dollars in your cost of goods sold. Perhaps you could check your accounts by creating a profit and loss for just the sundry item items with and see what the outcome is for the cost of goods sold.

Regards,

Sue Renouf
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Andrew

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Ah yeah, negative quantities - that was part of the problem (sort of!)....

We also use the SUNDRY product to sell a load of misc products that came with the business when we bought it.  Products that will not be kept as a stock item when eventually sold/disposed of, so no point loading on.

So we have a large negative quantity anyway, which I wasn't really too concerned about - I just thought not tracking the quantities would be more suitable for this situation.

I suppose my question was:  Does using "Non-inventory" (with "This item is used for" ticked), do exactly the same as "Inventory" item, with the exception of tracking quanties?  But I think I just answered it...

I remembered the main reason I thought the "Inventory" method is not ideal for sundry items - average costs.
Inventory items use average costs to impact the COGS/asset accounts?
And Non-inventory items use the actual cost on the bill or invoice rather than the average cost.

Is this not more accurate?  Especially when the average cost will be all over the place when selling $1 items then $1000 items.  And apparently the average costs can not be changed in Reckon?


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Kellie Cockerell

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Hi All

We have our misc item set up as non inventory.  It can throw our p&l out if the product hasn't been sold within the same month as goes straight to cogs.  Had wondered if the expense account should be change from cogs however unsure what to & it would probably upset all the stock adjustments we have done in the past when we have ended up adding the item to inventory.   I inherited the program so unsure if this is the correct way or not.

Kellie 
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Andrew

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Hi  Sue, we must have read each other's mind - I hadn't read your post!

I know, considering it is Reckon Premier we are running, it is certainly lacking in that area.

I remember seeing in another business how many average prices had become miles off over the years somehow.  But at least in that accounting system you could run a report on average costs, and correct ones that were obviously wrong.

I'll try and run a report on my sundry items and check the results, thanks.

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Sue Renouf

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Ha ha. I read your post and thought you had answered your own question well, Andrew.
I have set up sample company files and run profit and loss reports after such a scenario to convince clients not to use inventory in this case and have convinced them with the results. Inventory in Reckon is dangerous in the wrong hands, no matter which version. 
Cheers,
Sue
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Andrew

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Oh so you have already done it for me then!?  Would you advise to use Non-inventory for our situation from your experience?
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Sue Renouf

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Yes. Definitely.
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Andrew

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OK, thanks Sue.

Toni, am interested what your opinion is on this reasoning for doing things differently?