Difference between revisions of "Internal Accounting, Example Promotional Stock"
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=== The Philosophy Behind Catalyst Internal Accounts === | === The Philosophy Behind Catalyst Internal Accounts === | ||
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'''"Move stock internally between departments, attributing the Cost against a department and the flexibility to show an internal profit, if required."''' | '''"Move stock internally between departments, attributing the Cost against a department and the flexibility to show an internal profit, if required."''' | ||
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==== Details ==== | ==== Details ==== | ||
In this example we are going to give away some promotional stock to the value of £100.00 showing no profit on the internal movement, thus charging the movement at cost. | In this example we are going to give away some promotional stock to the value of £100.00 showing no profit on the internal movement, thus charging the movement at cost. | ||
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* Reduce the stock quantity when an item is given to a potential customer. | * Reduce the stock quantity when an item is given to a potential customer. | ||
* Show the cost of this against the Clothing & Merchandising dept. | * Show the cost of this against the Clothing & Merchandising dept. | ||
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==== Set-up ==== | ==== Set-up ==== | ||
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* Create a Sales Ledger account called "Internal Promotional Sales", e.g. {{DataPrompt|INT001}}. | * Create a Sales Ledger account called "Internal Promotional Sales", e.g. {{DataPrompt|INT001}}. | ||
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When the month end updates the nominal, the system looks at the centre modifier and if it is set, it then checks the settings for how to proceed with the update, because the concept of the centre modifier is to add the modifier character to a position on the centre it is to update. So, in this example the system would add the letter ''I'' into the sixth position of the nominal code, therefore updating centre ''11100I'' ''Parts Sales Internal''}}. | When the month end updates the nominal, the system looks at the centre modifier and if it is set, it then checks the settings for how to proceed with the update, because the concept of the centre modifier is to add the modifier character to a position on the centre it is to update. So, in this example the system would add the letter ''I'' into the sixth position of the nominal code, therefore updating centre ''11100I'' ''Parts Sales Internal''}}. | ||
| − | * Set the Internal Flag to ''YES''. | + | * Set the Internal Flag to ''YES''. |
* Create a profit & loss nominal centre, cost of sales, called ''Promotional Costs'' and assign this to the default payment centre. Centre {{DataValue|12200I Promotional Costs}}. | * Create a profit & loss nominal centre, cost of sales, called ''Promotional Costs'' and assign this to the default payment centre. Centre {{DataValue|12200I Promotional Costs}}. | ||
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| − | * Set the {{DataPrompt|Cash Sales:}} flag to {{DataValue|Yes}} so that the internal debtor is cleared immediately. | + | * Set the {{DataPrompt|Cash Sales:}} flag to {{DataValue|Yes}} so that the internal debtor is cleared immediately. |
On the {{DataPrompt|Group/Analysis Tab}} | On the {{DataPrompt|Group/Analysis Tab}} | ||
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On the {{DataPrompt|Stock Tab}} | On the {{DataPrompt|Stock Tab}} | ||
| − | * Set the {{DataPrompt|Cost Of Sales}} code to be {{DataValue|12200I}} - Promotional Costs. | + | * Set the {{DataPrompt|Cost Of Sales}} code to be {{DataValue|12200I}} - Promotional Costs. |
* Change the Account Pricing to charge at zero. | * Change the Account Pricing to charge at zero. | ||
{{Note|If you unsure how to set the account pricing, please review the following article | {{Note|If you unsure how to set the account pricing, please review the following article | ||
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==== The Process ==== | ==== The Process ==== | ||
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* Using Stock Control, Point of Sale, invoice the item of stock at zero price to the customer against sales ledger account {{DataPrompt|INT001}} | * Using Stock Control, Point of Sale, invoice the item of stock at zero price to the customer against sales ledger account {{DataPrompt|INT001}} | ||
| − | * The Payment screen will appear as usual but default the payment type to ''12200I Promotional Costs''. | + | * The Payment screen will appear as usual but default the payment type to ''12200I Promotional Costs''. |
* Click {{Button|Post}} to complete the transaction. | * Click {{Button|Post}} to complete the transaction. | ||
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| − | ==== Accounting Entries ==== | + | ==== Accounting Entries ==== |
<pre>Sales Ledger Invoice | <pre>Sales Ledger Invoice | ||
CR 11100I Parts Sales Internal 0.00 | CR 11100I Parts Sales Internal 0.00 | ||
DB Z994 Debtors 0.00 | DB Z994 Debtors 0.00 | ||
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Sales Ledger Receipt | Sales Ledger Receipt | ||
CR Z994 Debtors 0.00 | CR Z994 Debtors 0.00 | ||
DB 12200I Promotional Cost of Sales 0.00 | DB 12200I Promotional Cost of Sales 0.00 | ||
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Stock Movement | Stock Movement | ||
CR Z922 Stock Value -100.00 | CR Z922 Stock Value -100.00 | ||
DB 12200I Promotional Costs 100.00 | DB 12200I Promotional Costs 100.00 | ||
| − | COS | + | COS |
========== | ========== | ||
12200I -100.00 Promotional Cost of Sales | 12200I -100.00 Promotional Cost of Sales | ||
========== | ========== | ||
NETT LOSS -100.00</pre> | NETT LOSS -100.00</pre> | ||
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The above results in a loss on the profit and loss for the promotional costs. | The above results in a loss on the profit and loss for the promotional costs. | ||
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* [[Vehicle Integration to Nominal Ledger]] | * [[Vehicle Integration to Nominal Ledger]] | ||
| − | {{KB_Tags| | + | {{KB_Tags|internal, accounting}} |
{{ZN_Accounts}} | {{ZN_Accounts}} | ||
Revision as of 12:15, 21 December 2018
Contents
Summary
This article shows an example of how to deal with items given away for promotional purposes. It assumes that you can create nominal ledger centre and understand how to invoice stock from Point of Sale.
More Information
If you are unsure about how to create nominal centres and invoice stock from Point of Sale, please review these articles.
The Philosophy Behind Catalyst Internal Accounts
"Move stock internally between departments, attributing the Cost against a department and the flexibility to show an internal profit, if required."
Details
In this example we are going to give away some promotional stock to the value of £100.00 showing no profit on the internal movement, thus charging the movement at cost.
System Goals for the movement of stock
- Reduce the stock quantity when an item is given to a potential customer.
- Show the cost of this against the Clothing & Merchandising dept.
Set-up
- Create a Sales Ledger account called "Internal Promotional Sales", e.g. "INT001".
On the "Invoicing Tab"
- Make the account VAT exempt.
- Make the Centre Modifier ""I"", this means...
 | When an invoice is produced onto this account the sales centre stamped onto the invoice will be the default centre stamped onto the stock code, stock group or if they're not set, the stock settings. In this example we shall use centre 100, Parts Sales Retail that links to nominal centres 11100 Parts Sales Retail which is stamped on the stock code. When the month end updates the nominal, the system looks at the centre modifier and if it is set, it then checks the settings for how to proceed with the update, because the concept of the centre modifier is to add the modifier character to a position on the centre it is to update. So, in this example the system would add the letter I into the sixth position of the nominal code, therefore updating centre 11100I Parts Sales Internal |
.
- Set the Internal Flag to YES.
- Create a profit & loss nominal centre, cost of sales, called Promotional Costs and assign this to the default payment centre. Centre '12200I Promotional Costs'.
- Set the "Cash Sales:" flag to 'Yes' so that the internal debtor is cleared immediately.
On the "Group/Analysis Tab"
- Make the account group "INT"
On the "Stock Tab"
- Set the "Cost Of Sales" code to be '12200I' - Promotional Costs.
- Change the Account Pricing to charge at zero.
| If you unsure how to set the account pricing, please review the following article |
The Process
- Using Stock Control, Point of Sale, invoice the item of stock at zero price to the customer against sales ledger account "INT001"
- The Payment screen will appear as usual but default the payment type to 12200I Promotional Costs.
- Click [Post] to complete the transaction.
Accounting Entries
Sales Ledger Invoice
CR 11100I Parts Sales Internal 0.00
DB Z994 Debtors 0.00
Sales Ledger Receipt
CR Z994 Debtors 0.00
DB 12200I Promotional Cost of Sales 0.00
Stock Movement
CR Z922 Stock Value -100.00
DB 12200I Promotional Costs 100.00
COS
==========
12200I -100.00 Promotional Cost of Sales
==========
NETT LOSS -100.00
The above results in a loss on the profit and loss for the promotional costs.
See also
- Internal Accounting
- Recommended Accounting Routines
- Stock Integration to the Nominal Ledger
- Vehicle Integration to Nominal Ledger
