DM Cloud does not maintain an Inventory General Ledger Account. However, you can create a project to store your inventory items, and keep track of what items you currently have in stock and record and report the total amount of Inventory you currently have on your financial reports. Please note, this is not a true Inventory System, and if you have more than a few items at a time in stock, know which items are promised to projects, or attempt to perform a physical count of your inventory, you may want to consider our Professional Version which offers a Full Inventory System.
At the end of the year, if you wish to record the total amount of Inventory that you have, there is a little bit of setup required. The first thing you will want to do is create a Project to act as the Storage Room/Inventory Project. When items need to be added to inventory, they can either be transferred to this project using the Transfer button (available in the DM2011 version) or manually transferred with offsetting vendor invoices (in previous versions of the standard package). Once the items have all been moved into Inventory, you can run the Project Profit and Loss Report (Located in the Project Management Section of the Reports) to determine how much Costs have been incurred. You can then create a Journal Entry dated at the end of the year, Debit your Inventory account and Credit a Deferred Cost of Goods COGS account (or each of the COGS account listed depending on how much detail you require). You will want to make sure that you make that Journal Entry Auto Reversing so that the next year financials are correct.
Creating a Stock/Inventory/Storage Project:
1. In Projects & Specifications check to see if you already have a Storage Room Project created for you, it will be coded ZZZZZ.
2. If you do not have this Project in your system, add a new Project, use the code ZZZZZ; the Sales tax code should be Out of State or Exempt.
3. Go to File > Company Settings > COGS Accts tab. Place the Storage Room Project Code into the Storage Room Project field.
4. Choose OK
Moving an Item to the Storage Room Project from an Existing Project:
1. Go to the Project that holds the original item purchased and paid for to the vendor (a vendor invoice should be entered for this item/component - if not, transferring the Item to Stock/Storage Project may not be your best solution- copy the Item instead).
2. Highlight the Item and choose the Transfer Item button.
3. Doing so will display the Transfer Item Window shown below.
4. The Source Project and Source Item information is populated automatically with the Project and selected Item from the Project and Specifications Window. The Item Quantity and Client Description are also displayed for reference. In the Transfer To section, enter the Storage Room Project Code (ZZZZZ) into the Destination Project field. If a Storage Location Project has been entered on the Company Information Window - COGS Accounts Tab, it will default as the Destination Project.
5. You can optionally enter a Destination Location Code within the Destination Project under which the merchandise will be transferred to.
6. The Mark Source Item menu allows you to set the status (Complete, Inactive, or Nothing) of the Source Item upon executing the transfer. If Complete, which is the default selection, or Inactive is selected, the Source Item will be moved into the respective folder on the Projects and Specifications Window. If Nothing is chosen, the Item will continue to be available with the other active Items in the Source (original) Project.
See the HELP in your program for more information on transferring an item or a partial item.
Accounting: Upon executing the transfer, the following transactions are created:
- A negative Project Purchase Order Vendor Invoice is created for each Component on the original Purchase Order for the Transfer Cost of the Component. The negative Vendor Invoice will be for a special XFER Vendor so that all the activity of all transfers can be monitored by reviewing the activity for the XFER Vendor.
- If the Component was originally created using a Project-Related Operating Expense, a negative Project-Related Operating Expense for the XFER Vendor will be created rather than a negative Vendor Invoice for a Project Purchase Order.
- These Vendor Invoices will remain on the Checking Window - Pay Bills / Print Checks Tab and in Accounts Payable until manually removed by the User. You will need to Tag both entries and choose the Offset button on that window. This allows the offsetting Payables to be reviewed if necessary.
Selling the Storage Room Item/Stock Item to a Client:
- Once you are ready to sell the item to a Client, you will need to transfer the item out of the Storage Room Project to the Project that is purchasing the item.
- Follow the same steps from above, but use the Storage Room Project item as your Source Project/Item. Change the Destination Project to be the Project to sell the item to.