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I also prefer the spaces, always formatted my numbers that way.
Its the only way I could find to use the exported file directly from QBs without having to remove each space to get the numbers to automatically calculate.
Maybe someone else has a solution? QBs support was also no help...Comment
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So my next question is around cost of goods sold (chart of accounts setup) specifically in Quickbooks,
Example
* You purchase and pay for 10 apples for R100 each at a total of R1000 in January 2020
* You use a different supplier to collect and deliver the apples to your store at a total cost of R500 paid for in February when your apples are ready
* Essentially you have 2 invoices and they are paid for in 2 different months from 2 different suppliers
* The apples make up 2/3 of the total cost to get the apples to your store and the transport makes up 1/3
Scenario 1
* The apples are entered as COGS into Quickbooks and paid for in January - These are physical stock items in quickbooks as you keep track of the inventory
* The transport is entered as COGS into Quickbooks and paid for in February - This is entered into quickbooks as other charges as it is not a stock item and inventory tracking is not required
Scenario 2
* Exactly the same as Scenario 1 except that the transport is entered as an expense and not COGS
How this looks from an accounting perspective \ Quickbooks for both Scenario 1 & 2
* The transport shows on the income statement\management accounts for the month of February in full R500 as an expense as it is classified as other charges and contributes to the months profit\loss
* The apples on the other hand only show up as a COGS in the month that it was sold as it is an inventory item - so if you sell 1 apple a month you will have a COGS from March to December of R100 contributing to your profit\loss for the particular month
So my question is basically,
Should the transport be a COGS or an Expense
* As a COGS it skews the Gross Profit figures for the individual months as the transport costs are all taken into consideration in 1 month February
* As an Expense the figures don't change however it does not skew the Gross Profit as such however the transport is then not taken into consideration in the COGS \ Gross Profit calculation
Your input is highly appreciated on how to handle the above or maybe how to input this differently into Quickbooks. Or maybe I just got it wrong and the transport is an expense?
A very very long post I know, just trying to explain it as best as possible...
Thanks hope this makes sense!Comment
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Transport inwards in that example, especially if material, is a cost of sale and is also part of the stock value at the end of any reporting period.
Quickbooks is elegant at dealing with it.
Have a look at the Help data for a Group Item. Bear in mind unit of sale and then explore the possibilities...Comment
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Thanks Andromeda, I think I understand what you explaining... Take the transport cost divided by number of units and add this to the apples\material as a group inventory item.
Did a quick read. Will read up abit more and see what I can come up with...Comment
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Another related Q for my understanding. Say everything is done correctly and as per the law etc in capturing all data... is the profit & loss statement that QuickBooks generates essentially the same figures that will be submitted to SARS as the companies annual return?
What I am getting at is even though you may have R100 worth of stock remaining from the previous FY which was paid for in full in the previous FY... This R100 will contribute to the now current years FY? in terms of tax returns?Comment
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I did abit more reading and correct me if I am wrong - QBs uses the average cost method to determine product cogs? Additional to that it uses the perpetual method continuously calculating the average price? and this is determined directly from the invoice for the product not the cost the QBs user allocates to the product...Comment
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100% correct. It values stock at average cost and therefore cost of sales too.
Regarding the transport issue, and in fact the apples, you would probably expense the whole lot as cost of sales on acquisition, then add back the stock on hand at every reporting period, at latest cost.Comment
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Kewl thanks Andromeda,
So how does one handle using QBs with an accountant.
For annual returns, do you hand over the file once all capturing is complete for them to prepare the annual returns?
and for VAT do you hand them the file as VAT is due?
and can you do any new capturing while the file is with your accountant?
What would be the process?Comment
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Hello,
What accounting standard is applicable in South Africa. Cannot seem to get a definitive answer on the net.
Is it IFRS or SA GAAP? or are these the same with SA GAAP adapted from IFRS...
and how does GARP relate to this?Comment
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You should basically use IFRS for SMEs, but see the attached anyway Summary of frs audit and review v1.pdfComment
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Yes. Essentially you decide on the effective date. For example you would make 28/02/2018 for that financial year. Your accountant would be able to make changes up to that date. You would be able to make changes after that date.
Once he is done he exports a very small change file which you import on your side. It helps if your accountant is familiar with Quickbooks and has your version or a later one.
If your accountant is not QB proficient, then you would just supply the printouts asked for and he would send you a list of adjusting entries, as with other packages.Comment
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Thanks a mil, this has been a very helpful answer
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