Hi Guys,
I wonder if someone can help.
We have an operating system that manages our stock perpetually. AAT never covered this as far as i can remember, they only ever covered periodic stock accounting.
So when anything movement happens with stock it posts a double entry on Sage 50. However it only adjusts stock on the balance sheet, it doesn't go to CoS on the P&L, until the sales invoice is raised when the cost is then posted to Purchases.
So for eg booking parts to stock(rather than for a job) Dr stock - Cr Purchase Accrual.
When the purchase invoice is received Dr Purchase Accrual - Cr Accounts Payable.
For parts directly for a Job, when they're booked to a job its Dr WIP - Cr Purchase Accrual. When the job is invoiced out its Dr Parts Cost on the Job (so CoS) - Cr WIP
For parts used from stock for a job its Dr WIP - Cr Stock. Then when the job is invoiced out its Dr Parts Cost on Job (CoS) - Cr WIP.
So, the postings to the Stock and WIP are Balance Sheet nominals.
However, as a company we have always accounted for WIP in the sales on the P&L. So I am being told we need to do a journal for the WIP in the P&L and then for the 'stock movement' in the P&L. But i just don't understand this. If i need to make an adjustment, i have no idea what it should be or how to find out how much for.
The other issue i have is that the stock value on the Operating System is completely different to what is on the balance sheet on Sage.
Has anyone dealt with anything like this before? Any advice or pointers would be greatly appreciated?
Thanks
I wonder if someone can help.
We have an operating system that manages our stock perpetually. AAT never covered this as far as i can remember, they only ever covered periodic stock accounting.
So when anything movement happens with stock it posts a double entry on Sage 50. However it only adjusts stock on the balance sheet, it doesn't go to CoS on the P&L, until the sales invoice is raised when the cost is then posted to Purchases.
So for eg booking parts to stock(rather than for a job) Dr stock - Cr Purchase Accrual.
When the purchase invoice is received Dr Purchase Accrual - Cr Accounts Payable.
For parts directly for a Job, when they're booked to a job its Dr WIP - Cr Purchase Accrual. When the job is invoiced out its Dr Parts Cost on the Job (so CoS) - Cr WIP
For parts used from stock for a job its Dr WIP - Cr Stock. Then when the job is invoiced out its Dr Parts Cost on Job (CoS) - Cr WIP.
So, the postings to the Stock and WIP are Balance Sheet nominals.
However, as a company we have always accounted for WIP in the sales on the P&L. So I am being told we need to do a journal for the WIP in the P&L and then for the 'stock movement' in the P&L. But i just don't understand this. If i need to make an adjustment, i have no idea what it should be or how to find out how much for.
The other issue i have is that the stock value on the Operating System is completely different to what is on the balance sheet on Sage.
Has anyone dealt with anything like this before? Any advice or pointers would be greatly appreciated?
Thanks