One method to move it out of stock is to sell it to a customer, where the
customer is your own company;
You sell it for zero dollars, moving it out of inventory, no profit recorded
but a cost of goods sold recorded.
No cash moves so I would suggest *not* doing what you've suggested below
because it will inflate your sales figures and possibly affect your tax
position.
The preventative measure for this problem is that if you are buying
fertilizer that you do not intend to sell on, purchase it with a vendor
transaction rather than a vendor invoice. This way you select the expense
category upon purchase.
If the fertilizer is on the same invoice as items you intend to sell on,
create a vendor invoice and a vendor transaction, use the same invoice
number and date for both.
In general, I would suspect a farmer does not need stock control in the
"parts" sense, perhaps in the "live" sense ;-)
Regards
Barry
On 28 July 2010 02:42, ario <[email protected]> wrote:
> Hi Gerald,
>
> thanks, that sounds easy.
>
> But, how will the cost of the fertiliser appear in the 'costs of goods
> sold' of the specific department which consumed the fertiliser?
> Thinking of it, the follwoing solution pops up in my mind:
> Maybe through a simultaneous cash transfer?
>
> 'fertiliser stock' dept:
> cash debited by X
> inventory credited by X
>
> 'couliflower on area 1' dept:
> cash credited by X
> costs of goods sold debited by X
>
> both cashes are the same company cash, only appearing under different
> departments. So the company cash position won't change a bit, the
> inventory is credited and the costs of goods sold are debited.
>
> Does this sound correct?
>
> thanks
>
> ario
>
> On Tue, 2010-07-27 at 09:55 -0400, Gerald A wrote:
> > Hi Ario,
> >
> > On Fri, Jul 23, 2010 at 7:11 PM, ario <[email protected]>
> > wrote:
> >
> > for a farm there is fertiliser in stock, purchased some time
> > ago and
> > recorded through 'vendor invoice', hence recorded as inventory
> > in stock.
> > Now the farmer is spreading some of this stocked fertiliser on
> > the soil,
> > but he is not selling any, nor does he know how much produced
> > end-goods
> > (kg produce) will result from his current farming operations.
> > How is the consumption of this fertiliser to be recorded and
> > moved out
> > of the inventory and charged to that particular
> > 'department' (specific
> > area) and project (cropping type and date) of the farm without
> > selling
> > any to a third party?
> > I'm quite stuck with this as the only possible way I see to
> > move this
> > used fertiliser out of the inventory is through selling.
> >
> > I'm still getting my feet wet in ledger-smb, so I can't give you a
> > definitive answer.
> >
> > However, there must be a way to "consume" things out of inventory
> > without selling
> > them. I think of a paper company -- when they need paper, they just
> > remove it from
> > inventory. This would be similar to any process where a company keeps
> > supplies on
> > hand.
> >
> > Now, as a pure hack, if no one else responds with the "correct" way to
> > do this, you
> > could create a "customer" called internal who you "sell" the goods to.
> > Since the
> > goods are paid for, you could "charge" the internal customer $0 and
> > this would
> > allow your fertiliser to be consumed.
> >
> > It's a hack, and I'd love to hear the real way to approach this.
> >
> > Thanks,
> > Gerald
> >
> >
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--
Barry Clearwater
Managing director
BC Systems Consultancy Limited
Email: barryc - at - bcsystems dot co dot nz
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