NESFA® Treasury Procedures: Setting Up a New Inventory Item
Creating a new inventory item is a multi-step process. Before the inventory
item can be set up, you need to have created a number of other
accounts:
- An inventory account, IV-xxxxx, an asset account which holds the current
value of the inventory for that item.
- A cost of goods sold account, CG-xxxxx, an expense account which
accumulates the inventory value of all copies sold
- A sales income account, SI-xxxxx, which accumulates the income from sales
of this item
- A sales expense account, SE-xxxxx, which accumulates any cost of sales
other than cost-of-goods-sold
- Possibly a royalty account, RY-name, if royalties are to be paid. This
will normally be a single royalty account for all items by a given author.
The xxxxx
should be the same in each case and should be constructed
systematically. (We did not always do this, but let's take care not to make it
worse!)
- To create the inventory item, use Tasks/Inventory and select New.
- Give the item a name. The standard is author's last name followed by a
number.
- Select Stock item as the type of item
- Fill in the comment field with Author/Title, ISBN 978-x-xxxxx-xxx-x, etc.
- Fill in the SI, CG and IV accounts
- Use FIFO as the method of determining cost.
- Enter the ISBN-13 on the Custom Fields tab; it is no longer necessary to
enter the ISBN-10.