How can we move inventory items to costs on a project taking the item from inventory and allocating it to the project?
Hello Kelliet,
You can't allocate inventory items to projects directly. Project allocations work by allocating journal entries. By default only revenue and expense accounts are set to allow project allocation. This means that typically, because an inventory item on a purchase invoice won't generate an entry to a revenue or expense account, it can't be allocated to a project with default settings. You've got some options. You could open the chart of accounts and allow allocations to projects for additional accounts, like the inventory asset accounts. You could wait until the sales invoice and allocate the cost of goods sold of the inventory to the project. Depending on the scenario, you could setup departments instead of projects. You may have to talk to your accountant to see which option is best for you.
Thanks,
Chris Parrish
As Chris mentions, this is typically done at the time of the sale. Costs and Revenue can be allocated to projects on a sales invoice if the accounts are set to allow project allocations.
You can also allocate to projects on Inventory Adjustments at the same time as relieving the inventory, if that is a more appropriate entry in your circumstance.
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