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Reciepts - inventory HELP!

Discussion in 'Business Fundamentals' started by Sno, Jan 1, 2003.

  1. Sno

    Sno Senior Member
    Messages: 320

    Ok, I'm doing reciepts for a year and a half. Trying to put them into quickbooks pro.

    I entered the invoices as labor and parts just as shown on the old invoices ( I do apartment maintenance besides snow plowing )

    Here is the question.

    On about every job I do I always buy extra parts and materials just in case I need them I dont have to run to the store for a 1.00 item. If these items are not used I dont charge for them. Some really add up ad over the last 1 1/2 years I have a fortune in this stuff but its all in the gargage and have actually done work using this stuff and it cost me nothing cause I already had it.

    Can I get away with adding all these reciepts of extra parts as expenses?
    If I do, do I have to inventory all that stuff?

    What are the pro's and con's?

    I could probably double my expenses by including these receipts.

    I also buy in bulk if the price is right is the biggest reason I have all this $ in reciepts.

    Just cant see inventorying all these little pieces and parts.

    PVC couplers, pipe, wire, valves, switches, lumber, screws, nails, salt, etc.
     
  2. digger242j

    digger242j Senior Member
    Messages: 672

    First off, let there be no misunderstanding, I will *not* claim to know a darn thing about accounting.

    That having been said, I think I'd just charge them as an expense to whatever you were working on at the time you bought them. If you save a buck on a later project by using your own leftovers that's great. I can't see where there would be a problem with the tax man. What you lost in profit on one job by over-buying would be made up in profit on another job by using "free" material. It would all wash at the end. And the day you retire you can have a big garage sale report the earnings from that too.

    I'm vaugely familiar with Quickbooks. If I'm not mistaken it'll keep pretty good track of how well you do from one job to another if you take the time to assign all the expenses where they belong. To charge things off to one job and use them on another job as I suggested would sorta defeat that purpose. I guess the question is, how much aggravation is it worth to have it do all it's capable of?
     
  3. HLS Wholesale

    HLS Wholesale Senior Member
    Messages: 111

    You probably already expensed them when you bought them the first time, assuming you don't have an inventory system. It sounds like these gadgets are immaterial in price and therefore are not worthy of "capitalizing" those costs until they are sold. If I'm wrong, and they are expensive, then it would be best to go ahead and inventory them...that way your P&L statements are more reflective of reality.

    If you are (and I assume you are) expensing them when purchased, then no....you cannot expense them again when they are actually used. If you eventually sell them, then 100% of the sales price would then be recorded as income.

    Hope that helps...

    Dan Norton
     
  4. Sno

    Sno Senior Member
    Messages: 320

    No, I'm a rookie.
    I have been putting tool, advertising etc. reciepts in one shoebox.

    And the material reciepts I picked out what I used and charged the customer, then tossed them in another shoebox.

    Right now, I have just what I used on the jobs in the reimbursed expense account. (Quickbooks)

    It shows as income on the reports. Nothing shows as expenses.

    After studying it awhile, looks like I need to enter them again as an expense also.

    Then, I thought. why not expense it all? Even what I didnt use?

    Guess that is the question I'm trying to determine.

    I just bought the quick books pro. Trying to put past invoices and expenses in for tax info.

    Also, trying to learn accounting and quickbooks.. at the same time LOL

    Man, any help would be apreciated/.
     
  5. HLS Wholesale

    HLS Wholesale Senior Member
    Messages: 111

    Yes, expense it all. What you left over is scrap. If you sell it, it will be income.

    Here's the proper technique:

    Buying materials for a job:

    Dr. Cost of Sales $xxx.xx
    Cr. Cash $xxx.xx
    (This is done automatically when writing a check...you'll have to tell it which cost/expense account to apply the check to)
    However, if your just entering old receipts, it may best be done through the general journal using the debit and credit accounts I show above.


    Record a completed job:

    Dr. Accounts Rec. (or cash) $xxxx.xx
    Cr. Income Account $xxxx.xx
    (This is done automatically when entering an invoice to a customer)

    Recording non-job related expenditures:

    Dr. Expense accounts (Rent, Utilities, etc.) $xx.xx
    Cr. Cash $xx.xx

    Does this help?

    Dan
     
  6. Sno

    Sno Senior Member
    Messages: 320

    Damn scrap...

    Yes, thanks.

    :)
     
  7. MLB

    MLB Senior Member
    Messages: 110

    if you understand

    then there's no "damn scrap". It's non scrap. It doesn't exist to accounting anymore. You're thinking/making it more complicated than you need to.
    You buy the stuff, you enter the check (or cash) transaction in QB's - it's expensed (money out). When you use some in a job, its income, just like the labor (money in). That's all you have to do with it. What's left over is just vaporware........you don't have to keep track of it or make sure it matches what was spent to buy it or anything like that. Relax :)
     
  8. Sno

    Sno Senior Member
    Messages: 320

    That helps even more. If it matters, I have a boat load of Non scrap.

    Half the time, expense was double the income.

    Should start paying off though.

    Thanks.
     
  9. Lawn Lad

    Lawn Lad Senior Member
    Messages: 407

    Also, keep in mind that if you carry inventory, or declare it on your taxes, you must report your taxes on an accurel basis. You can no longer report on a cash basis.

    Keep it simple and write all the materials off when you buy 'em and use the scrap/extra when you need it. When you look in your shop at all the extra supplies, think of it as money, materials already paid for. If you can use it, it's pure profit on the next job.
     
  10. Sno

    Sno Senior Member
    Messages: 320

    That I was unsure of also, thanks.