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• # 99441
• Wed 07 May 2014 02:01 AM

I'm taking on a new client and have a query regarding entering stock figures in order to present an accurate P+L report at the end of each quarter.  It's a fabrics company that buys in rolls of fabric and then sells in random quantities/lengths/widths etc, so using the quickbooks stock feature would be impossible.  

If I set up Stock on hand (BS account), Opening stock (COGS) and closing stock (COGS) accounts, then:

At the beginning of the period:

Cr Stock on Hand (BS)

Dr Opening Stock (P+L)

and at the end of the period:

Cr Closing Stock (P+L)

Dr Stock on Hand (BS)

This gives me the figures in right order on the P+L report Opening stock + Purchases - closing stock = total cost of goods sold.  However, the opening stock account never gets cleared as I would then debit it again with the opening stock for the next period.  

To clear this up, I could just have one stock account on the P+L (COGS) that leaves a balance at the end of each period (opening stock less closing stock) but it would appear on the report as Stock + Purchases = total cost of goods sold which doesn't look very good despite the figures being correct.  

I suppose what I'm after is a way to clear the opening stock (COGS) account at the end of each period (with a credit), but I'm unsure as to where the Debit side of the entry could go!  Any Ideas??

Thanks, Chris

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• # 99704
• Sat 17 May 2014 01:57 AM

Anyone have any ideas on this? I've tried asking Inuit about this to no avail.  Astonishingly, the people that provide pro advisors with support seem to have very little accounting knowledge, so barely understand what I'm trying to achieve here, and can only advise on the standard stock features of quickbooks!

One of the main problems with the method I have described is that if I run a P+L report that covers more than one quarter, the opening and closing stock figures are the cumulative figures put in for each quarter which results in a figure for actual stock used (cogs) that is just plain wrong :(

As things stand, it's looking like the only reliable way to do this is to export a Quickbooks P+L to excel and manually put in the opening and closing stock figures.  Surely there's a better way?!

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• # 99710
• Sun 18 May 2014 08:32 AM

Let's says you start the month with the correct value in the stock asset account E.g. £2,000

You then post the purchase invoices during the month to a COGS account E.g. £7,000

Then at the end of the month if you have £3,000 stock you would post the following journals:

dr COGS £2,000 and cr stock asset £2,000

and dr stock asset £3,000 and cr COGS £3,000

Thus you end up with stock asset £3,000 and COGS £6,000 which is right as you have effectively not sold £1,000 of your purchases. You could of course just post one journal for that £1,000 change in stock to get the asme end result.

• Ruth
  www.shoreaccounting.co.uk

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• # 99717
• Sun 18 May 2014 06:39 PM

Hi Ruth, thanks for your response.  What you have described is exactly what I've proposed in the orignal post except that I've done it in to sub accounts of COGS (opening stock and closing stock accounts).  What you have said will produce the correct figures, however it will just show up as one figure for COGS on the P+L report. What I'd like to achieve, is something that reads:

Opening Stock

Plus Purchases (and other costs like shipping etc)

Less Closing Stock

= Total COGS

Any ideas?

Thanks, Chris

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• # 99721
• Sun 18 May 2014 09:19 PM

It is normal to just show one COGS figure, with the balance sheet being referred to for stock figures.

But if you want to do this, it is correct for the opening figure to remain the same if you are using cumulative totals.

Or if you working on a month by month basis it will effectively be cleared to zero as all P&L accounts are at the end of a period when total profit is transferred to the relevant reserve account. Thus you do exactly the same in month 2 as you did in month 1, adjusting for both opening and closing stock.

• Ruth
  www.shoreaccounting.co.uk

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• # 99740
• Mon 19 May 2014 05:45 PM

I know it's fine to show a total COGS figure but he likes to see what he's actually spent as well as the actual COGS on the P+L.  I think I know where I am with it though. Thanks for your help

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