[GNC] Stock Levels

[David Carlson]

doncram, I think that you contradicted yourself when you said GnuCash
supports inventory control then described how difficult it is to emulate a
few of the most basic features of inventory control.

On Fri, Oct 2, 2020 at 4:21 PM doncram <doncram at gmail.com> wrote:

> Hi Frederick & others -- It has often been said in this email forum that
> GnuCash doesn't support inventory, but I think that's basically wrong.
> What I mean is that while GnuCash has no separate inventory module as are
> available in some versions of Quickbooks, say, one can use GnuCash + a
> supporting spreadsheet (in Excel or freeware LibreOffice Calc which both
> have some database features) perfectly well for accounting for a business
> with inventory.  A few demonstrations/examples are needed to provide for
> arriving potential users though.
>
> A simple approach which might work especially if there are not too many
> transactions could work as follows:
>
> *When purchasing inventory, perhaps of a few different types*:
> a) enter transaction into GnuCash as increasing one big Inventory account
> and decreasing cash without any detail about numbers of units of what
> types, just reference the invoice or sales receipt which you file into a
> Vendor file.
> b) in the spreadsheet create rows as needed for each the different types of
> inventory (say Barnevelder chickens and Chantecler chickens) and in three
> new columns for the purchases record the numbers and prices paid and total
> dollars paid for each
> Repeat as new transactions happen, adding 3 columns each time.
> Keep one column carrying the sum of all purchases as an estimate of current
> value of each type, with a sum at bottom reporting the total value of
> inventory.
>
> *At the end of a month or other accounting period*, do an inventory
> inspection and record in a new set of 3 columns the number of each type
> which you count, a price per unit (perhaps use the original or the last
> purchase price, or a new estimate of your own based on what you see and
> know), and a calculated current total dollars value.  Perhaps some units
> will have been lost or some new chicks have been hatched and some prices
> will have changed, so the sum of value of current inventory will be lower
> or higher.  Then update your financial value in Quickbooks to reflect the
> amount of that change:  increase or decrease "Inventory" value and
> recognize a gain (say "Gain from Inventory growth") as income or a loss
> (say "Loss from Inventory decline") as expense.
>
> Also *whenever you sell any units*, add three columns for the numbers sold,
> the price per unit, the dollars yielded.  In GnuCash enter an increase in
> cash and recognize "Revenue from sale of chickens" or whatever.
>
> In your business, you will also record expenses for operating costs, and
> any revenues from sales of eggs say, and in the Income Statement for a
> given period you will see whether you have made a profit or loss on the
> period.  In this approach, with your counting and revaluing your inventory
> to roughly a current market value each period, profit can be shown due to
> gains in value even if there have not been any sales.  As suggested here,
> the spreadsheet would tend to expand to the right.  But perhaps that is
> fine, as after all there is no shortage of empty columns available in any
> spreadsheet nowadays.
>
> Note there are many possible different implementations.  One could have
> GnuCash inventories for each type of chicken, so values for each type would
> appear in your Balance Sheet, though at cost of requiring many more GnuCash
> transaction entries.  One could use "inventory valuation" approaches other
> than the current market value estimation approach suggested above,
> variations that may be legally allowed in financial accounting (e.g. First
> In First Out (FIFO), LIFO, Average Cost, Specific Identification), but are
> probably not worth bothering with.  These variations might allow for some
> gaming to advance or defer taxes due, or to manipulate reported earnings of
> your firm sooner or later, but such gaming is generally not worthwhile.
> Also a more database-oriented approach to organizing the information might
> be possible, say with columns for each type of chicken and one row for each
> transaction or re-valuation or new total value.  Perhaps that would allow
> for some different types of reports using DCOUNT and DSUM type formulas.
>
> But perhaps the above approach would work for you?  Maybe you could
> explain a bit more about what you want to do?
>
> In my opinion, Quickbooks' inventory feature is cumbersome, requiring one
> to go through multiple screens to create a new inventory type, and
> requiring application of just one type of valuation (I think requiring
> every unit to be valued at same price per unit always, i.e. this is suited
> only to situations where suppliers are unrealistically required to sell to
> you at the same price forever).  It does not allow one to choose other
> valuation approaches.  It probably fails to provide reports that you want
> suited to your application.  It fails to support useful calculations that
> are often wanted (such as for when inventory of each type should next be
> purchased and what order quantity should be used, based on "Economic Order
> Quantity" theory or similar).  I know of manufacturing firms which use
> Quickbooks for accounting but absolutely would never use it for inventory;
> they instead use a separate spreadsheet for inventory that works for them.
>
> Note in past discussions, as mentioned, sometimes users have been directed
> to try to adapt GnuCash's feature for tracking shares of investment trading
> securities (which looks up current stock prices online, and handles stock
> splits, and so on), but stocks are fundamentally different and it never
> works for a user to take that approach.  By the way I am in favor of
> several other features being added to GnuCash to make it more widely
> usable, but not for an inventory module.
>
> Frederick, does this help?
>
> Don Cram
>
>
> On Fri, Oct 2, 2020 at 5:36 AM Derek Atkins <derek at ihtfp.com> wrote:
>
> > Gnucash does not have inventory support.
> >
> > If you only need to track a few items you can probably hack something
> > together using a Stock account, but it is not a true inventory.
> >
> > -derek
> > Sent using my mobile device. Please excuse any typos.
> > On October 2, 2020 5:17:09 AM Duikerbos <duikerbos at gmail.com> wrote:
> >
> > > Morning
> > >
> > > I am starting a small Broiler project and using GnuCash to track
> > > transactions
> > >
> > > Is it possible to track stock levels, birds purchased less birds sold?
> > >
> > >
> > > Frederick
> > >
> > >
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-- 
David Carlson