Re: [SL] Service company; ad-hoc parts, parking/fuel expenses

[Jeff R. <je...@jr...>]

Hello Alan

There is no need to go through all the trouble of keeping inventory just 
to track taxes. I do the same thing as you as far as buying stuff for 
clients but I just enter the purchase under "AP/Add transaction". I 
chose my expense account for "parts expense" and write a little memo if 
I need to. When I sell it I have a part called "misc part sale". It's 
got a price of "$0.00" and is linked to "Part sales revenue". Once I've 
got it in the invoice on a line, I type over it with a correct 
description and fill in the price I'm selling it for.

The purchase becomes a direct expense and the sale becomes a direct form 
of income, nothing is ever in stock more than a few days here so I'm not 
worried about the balance sheet showing any inventory.

The taxes will be recorded properly and you can run a taxes paid and 
taxes collected report from the AP and Ar sections to reconcile them at 
remittance time.

Jeff


Alan Murrell wrote:
> Hello.
>
> I run an IT service company (well, just myself, really).  I don't keep an inventory, but do buy hardware and software for my clients on an as-needed basis.  I am wondering if the following workflow is correct?
>
> First, I created two parts: "HARD001 - Hardware" and "SOFT001 - Software".  My idea is to use just those "parts" for hardware and software, rather than creating a seperate part for every piece of hardware and software I purchase.  I would then just change the descriptions as appropriate (e.g., change "Hardware" to "Dual-head video card" or change "Software" to "Microsoft Office 2007 Profession", etc.)
>
> Once I purchase a part, I would then create a purchase order.  From the purchase order I then create a vendor invoice, which I then issue a payment on after it has been posted.
>
> This should, I believe, do the following:
>
>   1.) Place the part into inventory
>   2.) Balance out any amount owing to "0"
>
> Once the part is in inventory, when I add it to a Sales Order, I am assuming that the inventory will be reduced accordingly?
>
> Is this a good way to go about it, or is there a better way?  The only reason I am wanting to mess around with POs and vendor invoices is because I need to make sure I track the taxes that I pay on goods I am then reselling to my clients, and I don't know of another way to do that?
>
> While on the topic, I also keep track of other expenses like parking and fuel.  What is the best way to do that?  Should I enter them in individually as a GL transaction, or do a PO/vendor invoice thing?  I wouldn't want to do a PO/vendor invoice for each individual fuel and parking expense, as I have quite a few of them in the course of a month.  Is this what "Vouchers" are for?  I am thinking a "cleaner" way to do this is to track my fuel and parking for each month seperately, but in a spreadsheet (one for each month) which keeps a total of each expense, plus any taxes paid on it.  I can then maybe create a "dummy" vendor for these sorts of expenses and do the PO/vendor invoice thing; I wouldn't mind doing it once per month, or is a GL transaction best?  Can you input taxes paid and have them go into the appropriate tax account by doing a GL transaction?
>
> I hope that makes sense?
>
> Thanks for your tips!
>
> -Alan
>
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