[GNC] Stock Levels

Fri Oct 2 20:16:57 EDT 2020

A bit unfair i think.  I was referring to GnuCash + a spreadsheet, not just
GnuCash.  It takes some words to explicitly state how inventory accounting
works anywhere, especially if mentioning alternative approaches.  And I am
trying to put forward a workable solution for a potential GnuCash user
rather than pushing them away.

But i did try Quickbooks Desktop Pro for how they do inventory, and I still
pretty much dislike it though I just had a tiny bit more success.  Seems
one can change incoming and outgoing prices of an inventory item at any
time, then the new price(s) stick.  The software apparently applies average
costing to reprice all items currently in inventory immediately upon
purchase of any new item at a different price.  I think that's not actually
an option taught in accounting courses/textbooks so maybe it is not
strictly legit;  in textbooks I think average costing is applied only at
the end of an accounting period in valuing ending inventory and
transactions during the period. The Quickbooks help system says go buy or
subscribe to higher level Desktop Pro Enterprise if you want to apply
FIFO.  I think LIFO (also to be done at end of month) and Specific
Identification are not supported at all in Q, while I think they could be
done straightforwardly in a spreadsheet.

Don

On Fri, Oct 2, 2020 at 3:35 PM David Carlson <david.carlson.417 at gmail.com>
wrote:

> 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
>