Sale of an item of Stock (Asset)

Accounting
1

Hi,

I was just wondering if there is a function which would allow a sales invoice to be linked to an item that is categorised as Stock(Asset) and is being sold on.

The only option currently appears to be to create a separate “inventory item,” however this seems to be a doubling of efforts. If an item is sitting as “Stock(Asset)” then should this not populate an inventory item automatically when the purchase invoice for that item is created?

Any help with this would be much appreciated,

Dynamic_V

2

You wouldn’t normally use “stock” for items that have been purchased for resale, you would categorise them as “general purchases” and the sale as “general sales”. The “stock” nominal code is generally for year end adjustments to track the value of whatever stock you hold at your year end date - there are plenty of other posts on here explaining this process in more detail.

3

Hi,

Thanks for the reply. Quick question, When i sell an item that i have purchased as general sales, is there a way the sale’s invoice of that item can be tagged can be tagged to the purchase invoice for the same item? Would “project” do ths?

dynamic_v

4

How many of these do you do? You could use projects, or you could use the rebilling feature.

5

It will be all the time. I’m buying and selling used vehicles.

Thanks

Dynamic_v

6

Hi,

Would really appreciate help on this I purchase vehicles from one source and create a purchase invoice on the system. I will then sell the vehicles to another customer, when I create a sales invoice is there a way I can sell the purchase invoice of the system with keying in the details again

Thanks

7

Did you click the link in my post?

8

I did yes. But it gave me the impression that it was for re-billing on the purchase invoice.

9

Yes, that is what you are doing, aren’t you?

At least one of is confused!

10

No…I simply want to be able to sell a customer a car that I have purchased. So can I go into the purchase invoice and sell that purchase invoice of the system to a new buyer creating a sales invoices that will reflect that purchase? HELP !!!

11

The method that @Lurch mentions would allow you to basically copy the purchase invoice but as a sales invoice (all the details - the nominal code, the description, the price, the VAT etc. would all copy over). Using the re-billing feature, you can also select to add a markup if you wish:

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And then add your mark up (or leave it as it is, and edit the value yourself):

This feature is really intended for things like expenses incurred on behalf of a client, or while working for a client (such as travel, hotels etc.). However, you could do it like this if you wish.

As you mention you’re selling a car, and you’re doing this over and over again, I’m assuming you’re a car dealership of some sort? If so, this could be useful. For example, if you entered the purchase including mileage, previous owners, colour, model, then it would save you entering them twice.

Using a project tag could also help associate the purchase invoice and the sales invoice together if you wanted to do that, and that would allow you to see the profit on a car by car basis. You could even tag purchase invoices for new parts or work you’ve had done on the vehicle to the project tag too, to give you a full picture of the cost of the vehicle. You could use a tag such as the reg number (AA00AAA) or similar.

However, that all said, as @ian_roberts mentions above, stock is generally recorded as General Purchases on purchase invoices rather than as assets. The only time you could them as assets is at year end or year start, where they become “stock” (either opening or closing). There’s quite a few threads on the forums on this topic - do a quick search on recording stock, and you should find one that’s suitable.

Hope that helps.

12

Ahh very helpful. Will the refilling client let u put their full name and address

13

Unfortunately no, you would need to select an existing client.

That said, there would be nothing stopping you from selecting an existing client, and creating a new one on the following screen, like so:

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14

If i use the rebilling feature. Where do I input the sales amount not percentage. Thanks

15

On the next screen (invoice create). You can just leave the percentage as zero.

Your best bet is to give it a go yourself and see how it works. With that particular feature, nothing is saved until you click ‘Save’

Note: I’m not an accountant, so if you’re unsure if this is the correct way to account for it, or the correct nominal codes etc., it may be best to double check with your accountant to be sure

16

Hi…
Quick couple of questions.

  1. If i am being paid commission on a item that is an item I did not pay for. So I raise a purchase invoice or sales invoice and is there a category a should use.

  2. If i wish to pay myself money from my profits, should I do a sales invoice to myself and is there a category I use for this too.

Many Thanks

Dynamic v

17

The category would depend on the item itself, but generally a purchase invoice would only be raised if the business paid for it, or if it was owned by the business but paid for by the Sole Trader or Director. The tagging of the invoice itself would then be down to who paid for it etc., as per any other invoice.

The way you take money from the business depends on a few factors - are you a director of a company, or a sole trader; and if you are a director are you taking it via payroll or dividends? If you’re a director of a company, I think this is probably best discussed with your accountant as there are usually tax advantages depending on how you are paid.

If you’re a sole trader, there is no legal separation between you and your business, so you would need to simply withdraw the money from the business, log it in your current account and tag it as a transfer to the Proprietors Drawings Account. This would then need to journalled at a regular interval. There’s more on this here