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How to Mark Inventory for Store Use?

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  • How to Mark Inventory for Store Use?

    Occasionally, we will use an inventory item for use around the store. How do we go about marking it as such, so that the inventory count stays correct?

    Do we make an invoice for our company "purchasing" the item at cost? That would set the inventory count right, but how would we mark it as paid? We technically already paid for it when we bought it for inventory. Plus, we would have to deal with the added sales tax.

    There has to be a way to deal with this in Quickbooks, but I have searched for hours, and I still haven't found ANYthing about it anywhere.

    We use Premier 2007.

    Any help would be greatly appreciated.

  • #2
    Create4 a customer IN-HOUSE and enter an invoice for the items and set the amount to 0.00. This will enter a "Sale" for $0.00, move the purchase cost from Inventory to COGS and decrease the inventory quantity by the number listed on the invoice.
    Joe Williams
    joewilliams@wavelinx.net
    Piedmont, Ok

    Comment


    • #3
      If you only do this once in a while and/or it is a relatively small amount, try this:

      Create a customer for this.

      Make that customer taxable.

      Then, create a sales receipt. (You could do the same using an invoice, but I would keep it out of a/r)

      Put the prices in at the average cost for that date (run an inventory valuation report, for that date, to get this info).

      Then, create a discount item which points to your Supplies, or Advertising expense account and use this for the full amount of the invoice. This will minus the amount of the 'sale', posting it to that expense account.

      This will leave the amount of sales tax in your sales tax payable account, and take the item off of your shelf at average cost, incl sales tax.

      Thoughts?

      Laura D

      This seems to take care of the sales tax issue. . .and, your bottom line is accurate. . .however, it does (technically) inflate sales because you sold the product to yourself. I am not sure that matters, but. . .?
      Laura Dion
      Advanced Certified QuickBooks® ProAdvisor
      Cents-able Bookkeeping, LLC


      ♫•*¨•.¸¸.•*¨• I make QuickBooks sing! •*¨*•♫♪ ♪♫

      www.centsablebookkeeping.com
      Recommending Qbox: http://bit.do/qbox-98
      _______________________________

      Comment


      • #4
        Or create a vendor 'Inhouse inventory use'.

        Now create a zero value Bill. Under the Items tab record negative quantities of whatever you've used, at current average cost. Under the expense tab use whichever expense account you want, with the amount (positive) of the items, so the total A/P is zero. This will move the inventory quantities out, at cost, so there's no COGS recorded, and record the expense.
        Joyce Beck
        joyce@pc-firstaid.com
        ------------------------------------------------------------------------------
        Accounting and bookkeeping support, QuickBooks Pro Advisor
        Home and small business computer services in Northampton, UK

        Comment


        • #5
          RobJoy and Joe -

          If you use either of these methods, how do you account for the sales tax payable issue?

          Laura D
          Laura Dion
          Advanced Certified QuickBooks® ProAdvisor
          Cents-able Bookkeeping, LLC


          ♫•*¨•.¸¸.•*¨• I make QuickBooks sing! •*¨*•♫♪ ♪♫

          www.centsablebookkeeping.com
          Recommending Qbox: http://bit.do/qbox-98
          _______________________________

          Comment


          • #6
            Over to you, Joe, Sales Tax not a UK thing.
            Joyce Beck
            joyce@pc-firstaid.com
            ------------------------------------------------------------------------------
            Accounting and bookkeeping support, QuickBooks Pro Advisor
            Home and small business computer services in Northampton, UK

            Comment


            • #7
              Thanks for the responses.

              But as Laura D. asked, how do you deal with the sales tax payable if I do it the way RobJoy is suggesting? If we aren't actually selling the item, then we are required to actually pay sales tax on it, but your method doesn't seem to cover that.

              Why is there no kind of form or "official" way to do this in Quickbooks? I would think this would be a pretty common phenomenon.

              Comment


              • #8
                In OK and AZ there is no sales tax on items used "in house", but there may be a Use Tax ( tax for the amount of the purchased cost). You have to manually calculate the tax, using the COGS on the "in house sale" and then add it on your next sales tax payment with note.
                Joe Williams
                joewilliams@wavelinx.net
                Piedmont, Ok

                Comment

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