The Inventory Management features of VersAccounts allow you to track the quantities and values of all of the items bought and sold by your business. Before we go into the details of using the system, you should familiarize yourself with some of the terms we will be using.
Approved Vendor
- For each part, you can specify suppliers capable of selling the part to you. For each approved vendor, you can specify the minimum order quantity, the negotiated price for that particular quantity, and the expected lead time for delivery.
- The quantity produced when a Part's related Bill-of-Materials is built.
| Inventory Type | Default Product Category | For Purchase | For Sale |
|---|---|---|---|
| Raw Materials | Raw Materials | X | |
| Work-in-Process | |||
| Finished Goods | Goods Purchased for Resale | X | X |
Bill-of-Materials
- You can combine specified quantities of Parts to produce other Parts within your inventory. The Bill-of-Materials is a list of the Parts and quantities required to build a Batch Quantity of a Part.
- The function that combines inventory, based on a Bill-of-Materials, to produce a Batch Quantity of a Part.
- This represents the physical instance of a Part and its related Unit-of-Measure that you are keeping in your inventory. For instance, to continue with our example for pencils, you could have Inventory Items for individual pencils (P-001 / EA) and pencils in a box of 1000 (P-001 / 1k-box). These Inventory Items would appear as separate lines on your inventory listing.
- For any particular Part, you can shift your inventory between measurement units to suit your needs. For instance, you could break a box of 1000 pencils into 1000 individual units. Alternatively, you could consolidate 1000 pencils into a 1000-unit box.
- Inventory Type
- There are three types of inventory: Raw Materials, Work-in-Process, and Finished Goods. The total value of each of these types of inventory is reported on your financial statements as GIFI 1221, 1225 and 1226, respectively.
- Any physical thing that can be kept in your inventory. A part is identified by its Part Number. You can assign any part number that is convenient for your business needs. The only requirement is that the part number be unique. For instance, you might have an inventory of pencils with a part number of 'P-001'.
- Once you have created a Part, you can create an Inventory of the part by either a) purchasing it from your suppliers or b) building it from other materials in your inventory.
- Inventory is purchased from suppliers and sold to customers as Products. Every time you create a part with an Inventory Type of either 'Raw Materials' or 'Finished Goods', the part will also be listed as one of the Products traded by your firm. When a Part is created with an Inventory Type of 'Work-in-Process', it is not assigned as a Product, since your firm is not expected to buy or sell things that are only partially manufactured.
- The Product Category determines whether a particular product is Purchased or Sold. If the 'For Sale' box is ticked for a particular product category, then items belonging to that product category can be placed on a Sales Order. Likewise, if the 'For Purchase' box is ticked, then the items belonging to that category can be placed on a Purchase Order.
- You can create as many Product Categories as you like. Products within a category will be grouped together in the drop-down lists used for creating Purchase Orders and Sales Orders.
- When you create a new Part, it will automatically be assigned to one of two Product Categories, based on its Inventory Type as follows:
- The term by which you choose to measure your inventory. This can be a standard measurement unit such as an SI kilogram or an SI metre. Alternatively, you could choose to measure your inventory as single-units or EA (Each). You could also define custom measurement units that might be convenient for your particular needs, such as '1k-box' to represent a box containing 1000 units of an item.
- In general, you will want do choose a unit of measure that is the smallest unit you ever expect to deal with of any particular Part. For instance, if you buy pencils in boxes of 1000, but sell them individually, you will want to choose EA as your Unit-of-Measure for your Part related to pencils.
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