Inventory
Standard verison Included in Freelance and Business plans, this feature lets users create products and services for sales and purchases, without advanced Inventory Plus features like stock tracking or automated COGS recognition.
Inventory (Standard) is ideal for service-based businesses or non-retail operations that don’t require stock tracking, making it a simple yet sufficient solution for managing items sold or purchased without the complexity of inventory control.
Inventory Plus
Overview
NuMetric's Inventory Plus Module is designed to streamline and enhance inventory management through a perpetual inventory accounting system. This system ensures that inventory values, stock levels, and stock movements are continuously recorded and updated in real time. The module uses the Weighted Average Cost method to accurately and efficiently track inventory expenses.
Weighted Average Cost Method
The Weighted Average Cost method determines the average cost of a company’s inventory by dividing the total cost of goods available for sale by the total units available for sale. This approach is known for its simplicity, requiring less paperwork and a single cost calculation for inventory tracking. The primary benefit is the ease of managing inventory expenses, making it an ideal choice for businesses aiming to streamline their operations.
Functionality
When activated, the Inventory Plus Module in NuMetric manages product stock and costs based on the weighted average method. This ensures that inventory management is accurate and efficient. Here’s how it works in practice:
1. Item Creation: When a user creates an Item (Product for Sale), the system automatically generates two accounts:
Asset Account: Under "Inventory"
Expense Account: Under "Cost of Goods Sold" (COGS)
The user also selects the income account associated with the item's sales.
2. Bills: Upon purchasing an inventory item, the system adds the purchased items to stock management and updates the average cost per item.
3. Sales Invoice: During sales transactions, the system deducts the items sold from stock management, ensuring the real-time tracking of inventory levels.
4. COGS Transaction: For each sales transaction, the system automatically records a COGS transaction based on the calculated cost per item in stock management. This ensures that the expense is accurately reflected in the financial records.
Handling Returns and Refunds
Purchase Returns: When a bill return includes items (products for sale), the system will deduct the quantity from stock management based on the purchased value on the return record date. This process also updates and deducts the items' cost-weighted average.
Sales Refund: In the case of sales refunds, the system will add the refunded quantity back to stock management based on the related COGS sales transaction. It will also update the items' cost weighted average to accurately reflect the returned goods.
Handling Bundled Products
Creation of Bundled Products: Users can create new items for sale, including multiple items and units. They can manage the production of these new bundled products either manually or automatically. In both production scenarios, the system will automatically create two accounts:
Asset Account: Under "Inventory," to track the stock of the bundled products.
Expense Account: Under "Cost of Goods Sold" (COGS), to record the cost of producing the bundled products.
The user will also select the income account associated with the item's sales.
Manual Production Run: The system will show the available quantity for sale and manage stock and COGS transactions as it does for any other item for sale.
Automatic Production Run: The system will add a production (collection) transaction with component COGS at that time for each sales transaction. This ensures that the system can add the corresponding COGS transaction accurately.
Writing Off Items
Manual Write-Offs: In cases of item waste, expiry, or any other cause, users can manually write off these items. The system records a write-off transaction that deducts the damaged items from stock management using the weighted average COGS. This process ensures that the financial records accurately reflect the inventory loss and maintain precise stock levels.
Managing Non-Sale Items
Stock Management of Non-Sale Items: Users can manage the stock of items not for sale, such as stationery, marketing items, and gifts. The system allows users to identify these products as not for sale while still managing their stock levels.
Asset Account: For purchases of non-sale items, the system establishes an account under "Assets—Inventory."
Write-Offs for Non-Sale Items: Users must manually write off used non-sale items and select an appropriate expense account each time to record the transaction accurately.
Benefits
Real-Time Updates: Continuous tracking and updating of inventory levels and values.
Simplified Inventory Management: Utilizes the weighted average method for straightforward cost calculations.
Integrated Financial Management: This module seamlessly integrates with other financial modules, such as billing and sales invoicing, ensuring that all transactions are accurately recorded.
Versatile Stock Management: Ability to manage both sale and non-sale items efficiently, maintaining accurate records for all types of inventory.
NuMetric’s Comprehensive Approach
NuMetric’s commitment to redefining accounting technology is evident in its innovative features, such as the Inventory Module. By harnessing the power of cloud technology, NuMetric ensures that small businesses can confidently manage their finances, fostering growth and sustainability.
The Inventory Module in NuMetric Accounting Technology is a powerful tool designed to enhance inventory management efficiency. Its real-time tracking and simplified cost calculations allow businesses to manage their inventory accurately and effectively, contributing to overall financial stability and operational efficiency.