What is the best way to code inventory items that are being used in intracompany transactions, so the sales of those items can be recorded?

We have purchased a company who is now making parts for us in house to sell to our customers.  From an Accounting standpoint, do these finished goods parts need to be coded/identified differently in Sage so that we know how much money is being spent in house for our orders?  If not, what is the best way to identify these parts?

  • 0

    That is an accounting question you should talk with your CPA about in detail.  Once you have their answer on the accounting considerations, ask here about how best to do (...whatever they say...) using Sage 100.

    It really depends on the corporate structure.  We have clients which operate as multiple brands within one legal entity, and we have clients who have things set up as separate companies where there is a purchase / sale transaction for the inventory changing hands.  Get legal accounting advice from a CPA, not here.

  • 0 in reply to Kevin M

    I should have asked if new part #s need to be made.  That was the argument between Accounting and Purchasing.  Our Accounting controller does not seem to know the essentials.

  • 0 in reply to BB creek

    Inventory items are created for managing inventory value and quantities on hand.

    Misc items are for sales / costs associated with non inventory items.  (They could be used for things that you physically have on hand, but that you don't manage quantities).

    Charge codes are for service charges (without quantities).

    Special items (beginning with *) are a special category, that doesn't need to be tracked in any way outside of the order / invoice.

  • 0 in reply to Kevin M

    I understand that part.  I just wondered if there would need to be so many variations of the same part # or if that would be confusing from a tracking standpoint.

  • 0 in reply to BB creek

    That depends on how you want to manage the inventory (quantities, costs, pricing...).

  • 0

    Your further clarification in the replies below made me curious. I inferred that these parts may be created to a spec for a specific  customer or situation from the statement "just wondered if there would need to be so many variations of the same part # or if that would be confusing from a tracking standpoint."  

    The implication would be that you might have similar but not the same items. Is this the situation?  

    If I am wrong in my assumption you can ignore the rest.

    I think it would depend on whether these are assemblies of other parts, the source and tracking of those parts or if these are say custom parts created in a machine shop and in either case, will these parts that were created ever be used again for another customer, or even this customer with any repetition? 

    When you refer to the money being spent on in house orders, is this being looked at as an intercompany transaction or is this company that was acquired now a department within your company?  Does the cost that you are needing to reflect represent the finished good (intercompany)  or the total costs of it's creation but broken into labor and materials?

    You can assign anything a number or an ID, but it's important to establish what information you need to be extracting and how you need to use that information so that the process you design supports the end result.

     

  • 0 in reply to ChrisFix

    Hi,

    Yes, this is a company that was acquired and is now a part of our parent company. I believe the cost would be the finished good cost.

    Does this information help?

  • 0 in reply to BB creek

    Partially, I am still trying to understand the item variations. Are these made to order items or are they items that once created will be sold repeatedly to any customer? Feel free to email [email protected] and we can jump on the phone and talk it through. 

  • 0 in reply to ChrisFix

    Hi, so when this acquired company makes parts for us, the materials are pulled out of our inventory as a debit and then we receive the sale of the goods as a credit.  The acquired company is not receiving any sales though.  Is there a way to make sure the acquired company is also on the sales report?

  • 0 in reply to BB creek

    Big picture you would have to make some kind of intercompany transaction. I don't know what that would be as there is a lot I don't know. I would suggest that you either work with your local partner, or shoot me an email at [email protected]. That way we can have a conversation as this thread wont get us what we need to discuss. I am not going to charge you to have a conversation if that's you concern.