prepetual or periodic

Sage 50 Accounting - Canadian Edition

Sage 50 Accounting - Canadian Edition
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prepetual or periodic

  •  i was just wondering what invetnory system makes more sense to use im leaning towards periodic so i dont have adjust inventory everyday however im not sure

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    Ainsley

     i was just wondering what invetnory system makes more sense to use im leaning towards periodic so i dont have adjust inventory everyday however im not sure

    Hi,

    Simply Accounting is designed to be a perpetual system.

    It's possible to use it as a periodic (manual) system, all you have to do is buy, and sell everything as a 'service', and you can still use the price lists, and keep track of sales and purchase statistics.

    If you have to adjust inventory everyday, either you, or someone using your system, are doing something wrong.  There isn't enough information in your post, for someone to make an educated guess as to what that could be.

     

  •  The company i am working for is a small retail store that just opening up and im trying to make the chart of accounts and start linking them as well, my issue is that im not sure what system to use to track inventory and sales. 

  • Hi Ainsley,

    In Simply Accounting, Perpetual = inventory tracking is automatic. 

    When you buy an item, it's quantity and value are added, to the electronic 'ledger card', and when you sell an item, it's quantity and value are removed.  You can easily check cost, margin, etc. anytime.

    Also, when you sell an item, the cost is calculated and posted as part of the sales transaction, so you can find out how you did, right away, without counting inventory.

    Periodic = nothing is automatic.

    When you buy an item, it's cost is recorded, but lumped into a total.

    When you sell an item, it's cost is unknown, so nothing is recorded except the sales $$.  You have to do that manually, usually daily.

    When you count inventory, you have to post manual adjustments to the General Ledger to record the sum, of the individual counts * value.

    In the pre-computer days, businesses would usually tag their items with either both a sales, and a cost price (often encoded like H.37 for $8.37), or a Sale, and a 'department' code  (i.e. Dept 1 was 15% markup, 2 and 7 were 25%, etc)

    The cash register would record the sales through the day, and the day end report would show the 'Dept' totals, calculated by which 'Dept' buttons had been pressed for each sale (& / or return). 

    You could then calculate your inventory costs, based on the day's sales, and record that into the ledger.  Periodically, all the inventory would be counted, the markups were calculated back to the inventory cost, by department, and the adjustments were entered in the General Ledger.  It was a lot of work, and in this computer age is completely un-necessary.

    So, if you need to keep track of inventory, use a perpetual system.  There's usually no need to separate inventory by G/L code, it's just extra complication.  If your inventory arrives bar-coded, and you don't want to buy a Point-of-Sale system right away, use bar-codes as your product codes, and stick the manufacturer's product code into the description.  (i.e. 039404005571, POR 0557 Biscuit joiner etc.)  Any cheap wand-type scanner can be plugged into the computer, and will read the barcode (unless it's mangled)

    Or, if you have a straightforward cash business, and don't need to keep track of inventory, just get a cash register and enter the sales dollar amounts and tax into the accounting program at the end of each day. 

    I hope that helps, please post back.

  •  There is a seperate pos system and there is thousands of different items that do not follow a specific mark up, im fine with keepoimg track of sales daily since the tills would be closed out every evening at close and day end reports are printed.  From my understanding there will be a seperate company hired to come in and count the inventory for year end.  We will be accepting credit cards, cash and debit cards.  i dont think i have to keep track of inventory with simply since the pos will, but i think i am not sure.

  • Ainsley

     There is a seperate pos system and there is thousands of different items that do not follow a specific mark up, im fine with keepoimg track of sales daily since the tills would be closed out every evening at close and day end reports are printed.  From my understanding there will be a seperate company hired to come in and count the inventory for year end.  We will be accepting credit cards, cash and debit cards.  i dont think i have to keep track of inventory with simply since the pos will, but i think i am not sure.

     

     Hi,

    If you'd posted that you have a Point-of-Sale system at the start, we would have saved some time.  I've never heard of a point-of-sale system that didn't include, or require, a perpetual inventory control system.  That's what they do, and what they're for.  Most of them have their own accounting system, or will integrate with one. 

    The count that you do, for year end, is a verification check on the accuracy of a perpetual system, and to give you the information that you need in order to correct inventory errors and adjust for losses.

    So, from what you say, you may not additional accounting software at all, or if you do need it, you don't yet know which one you need.  The question regarding perpetual versus periodic inventory, has probably already been decided.

    Outside of a little gift shop selling home-made candles, probably no-one uses a periodic inventory system.  It's so labour-intensive as to be totally impractical.

     

  • so what is that you think this company needs? we have simply accounting pro and my boss wants me to keep track of everything on it form payroll to sales to purchases to paid outs.

  • Ainsley

    "i dont think i have to keep track of inventory with simply since the pos will, but i think i am not sure."

    so what is that you think this company needs? we have simply accounting pro and my boss wants me to keep track of everything on it form payroll to sales to purchases to paid outs.

     I think you need some clarification from your boss, on what information is to be kept track of, where.  Any transaction that you would need to record, can be entered into Simply Accounting Pro, including payroll, etc.  Sounds like the POS system is separate, and they don't have plans to integrate it.

    One way to ask the question would be to ask what happens when the inventory count is done.   Is the data loaded into the Point-Of-Sale system, and adjusted there?  What you need to know is if the POS system tracks quantities, and values.  If it does, there is no need to have inventory detail records in Simply Accounting.