Hi Luis,

Thanks for using Sage City.

With Sage Business Cloud Accounting you can manage your stock levels to make sure you always have the right quantities available. To do this, you need to create Stock item records. When you buy and sell these items, the number in stock is increased or reduced and the value is recorded.

Information about your stock item levels and values are updated when stock items are added to invoices and credit notes.

You can also manually adjust your stock levels to change the number of items you have in stock. You would generally use this to write-off damaged stock, or to adjust quantities after a stock take.

The value of the stock that you hold is usually shown as an asset to your business on your Balance Sheet. When stock is sold it becomes a cost and should be represented on your Profit and Loss as a cost of sale. This is to make sure that your Balance Sheet only reflects the value of Stock that you still hold.

To record this, we recommend that:

1. The purchase of stock items are recorded against an Asset ledger account. You can set a default nominal ledger account on the stock record to make sure the purchase of items is recorded correctly.

2. When stock is sold, you transfer the value of sold stock from the Balance Sheet to the Profit and Loss using a journal. If you’re not sure which nominal ledger accounts you should be using, we recommend that you contact your Accountant for advice.

Alternatively, if you want to you can record the purchase of stock to your Profit & Loss. For more information about how to do this, please speak to your accountant or refer to our guide.

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Regards,

Paul

Sage UKI