"Set up Suggetions"
Mike or Penny Novack
stepbystepfarm at mtdata.com
Tue Sep 9 20:50:04 EDT 2008
LaMark Lee wrote:
>Hello, I'm a young entreprenuer in need of a small business transfer/transaction system that works simultaneous w/ a chart of accounts similiar to the common set up. I'm buying a bulk order of wholesale t-shirts then paying screen printing service ( 5.00 per shirt) then resale at retail (19.99) pricing. I need a way to record business expenses of good/services (t-shirts and screenprinting) , the return (14.99)/recoupment(5.00) of sales and in seperate accounts to determine profit/loss every month w/ reports. The reason why I would have profit loss is because of t-shirt giveaways for marketing, t-shirt donations and selling shirts less than wholesale price (5.00). I also might resale some t-shirts at wholesale prce to promote. I doing so I'm not losing money. How would I record this as well. Contact me whenever you get a chance. Thanks!
First step is to learn enough "accounting for the small business". In
other words, if you don't know HOW you would be doing this the old
fashioned way with pen and ink on paper then GnuCash won't help much.
What acountign software like GnuCash does for you (and does very well)
is autoposting journal to ledger checking every step of the way that you
remain in balance and never mistranscribing an number -- 99% of the
errors in old fashioned bookeeping being transcription errors or math erros.
But for this little example:
1) What you pay out for the tee shirts and what you pay to get them
printed are NOT expenses. They represent the cost of acquiring inventory
for sale (an asset).
2) As you sell tee-shirts, your sales coming in are transactions split
between "income" and reducing the value of inventory.
3) "Selling" some at cost for promotions? Well you probably want to keep
track of how much you "spent" on promotions. So instead of JUST
increasing cash and reducing inventory the same amount you might use a
more complex set of transactions.
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