Items

Items are what you buy and sell in business. They can refer to physical stock, blocks of time, inventory, an investment asset, and even predefined services. In many cases, items are inventoried as stock, but this is not always the case. You can use item-style sales and purchase transactions to quickly and clearly bill the things you trade in your business.

Some examples of items:

• Charge rate of $50 per hr
• Widget that you buy, sell, and store as stock on hand
• Callout fee for plumbing services
• Delivery charge based on a per km/mile rate

How can I use Items?

• Add/Edit/List Combo Items
• Inventory Transfers
• Adjust your Inventory

Items

The Inventory Item screen is used to setup Inventory Items you buy and/or sell in your business. This might also be for billing time and services in a more commoditised way. The accounting method you use to track Inventory is an important decision you make with your advisor so before proceeding ensure you know and understand what method you want to use. Saasu uses the Perpetual Inventory System when you setup an item and tick Inventory.

Adding a new Inventory Item

There are many uses for inventory. Selling time blocks and services along with the more traditional buying and selling of stock. The help note about Inventory Methods goes into a variety of ways you can use the inventory system in more detail. The following example is just one method:

1. Enter a Code and Description for the Item
2. Check the appropriate box(s) for the item to tell Saasu whether you treat the Item as Inventory Item, Buy Item and/or Sell Item.
3. Choose the appropriate Tax Codes and Accounts for each of these sections.
4. Click Save and Close to finish or Save and Add Another to save this entry and start adding a new Inventory Item.

Items List

The Items List is used to search and edit Inventory Items you have already added to Saasu

1. The first drop down lets you filter by Active or Inactive or – All – items. Inactive items are those that are no-longer available for sale, produced or stocked in your business. Saasu still keeps accounting records for Inactive Items.
2. Use the next drop down to determine how you want to search. You can search by Code or by Description. Enter the start or part of the Code or Description in the field provided.
3. Click the Show button to generate the list.
4. You can click on the Code or the Description column headings to resort the list as required

Item Options
Visible – You can set an Item to visible so that in your database the Item is flagged to be displayed in your eCommerce product listings, in web pages and other related uses.
Inactive – This is a list of Items that you have previously used when entering transactions, but you no longer need to add entries. For example the Item is no longer going to be carried or purchased into stock or the Item is a service you no-longer provide. By placing an Item in the Inactive Items list, they do not appear in the drop down lists for transaction editing and report settings. You can later re-activate the Item by clicking the Edit icon next to the Item and checking the Re-activate this Item check box and saving the Item.

Inventory Methods for Items

Saasu uses the Perpetual Inventory system like most popular accounting software systems.

Because inventory methodologies have tax implications, you will need a clear understanding from your advisors regarding what method is best for you before proceeding. The following list will give you some examples of which checkboxes to use when setting up inventory items:

Services Billing
Tick: Sell

You can set up inventory items for services you provide for customers so they can be billed easily.

1. Select Items > Items and click the Add icon to create a new inventory item.
2. Enter an item code and an item description.
3. Tick Sell this item.
4. Enter the selling price - This is the amount you charge per hour/day.
5. Select the appropriate income account.
6. Select the appropriate tax code.
7. Click Save and Close.

When you are entering an invoice for a customer, select the Item Invoice layout. This enables you to select the above inventory item you saved from the Inventory Items list. Simply enter the number of hours you spent as the Quantity and the total amount your customer owes will be calculated automatically. For each line item you add in the invoice you could have a description (eg the tasks you completed during those hours).

Time Billing

Tick: Sell

Use this when charging hourly rates but not treating these as inventory.

Retailers

Tick: Inventory, Buy, Sell

• Purchase stock with item invoices without tracking stock levels.
• Used to buy widgets (physical) and services (non-physical).
• Sell stock with item invoices without tracking stock levels.
• Used to sell widgets (physical) and services (non-physical).

Subscriptions and Memberships

Tick: Sell

Use for ONE of these scenarios:

• When charging for a subscription.
• Rate for monthly services.
• Recurring services such as monthly cleaning or web hosting.

Manufacturers/Assemblers

Tick: Inventory, Buy, Sell

• When building combo items not yet complete and available for sale.
• Buy raw materials and build combo items from these.
• Buy assembled or manufactured goods and sell them as is or after building them into combo items.

Inventory Item Opening Balances

When you first start your file there is no inventory information in it. Unless you are a new business, you are likely to have existing inventory that you need to enter and track so that your Saasu file is accurate and represents your true inventory position.

If you are using Saasu for a new business that has been created from scratch (i.e. you have no trading history) then generally you do not need to enter inventory opening balances. However, even a new business may need to enter opening balances depending on how your business is structured and established. A new business may have stock you build or assemble even though the business has had no sales activity yet. You will need to consult your accountant regarding how best to bring these items into your business (eg at what book value you bring them in).

Your previous accounting system will contain the information that you need to correctly transfer your closing inventory position to your new accounting system. Closing the period and doing a stocktake prior to this is a good idea, otherwise you might be bringing across inaccurate stock on hand. Note that you can edit inventory opening balances later so it’s not critical to close the period and do a stocktake, just good practice.

1. Ensure all your inventory items have been set up or imported. To import your items, select View > Import or Export > Inventory Items. Also see the help note about importing inventory items to assist you with the process.
2. Ensure unpaid sales or purchases have been entered in Saasu. This is because the following opening inventory number will be net of the inventory traded in those transactions. In a simplistic way, opening inventory is what you haven’t sold yet, not what hasn’t been paid for.
3. Enter the last date of your previous record-keeping system into the field provided.
4. Enter the quantity of each inventory item from your previous accounting software and their unit cost – The line total will be calculated automatically.
5. Click Save at the bottom of the list.

Large item lists greater than 500 items

If you are a high volume inventory business, we suggest creating your opening inventory via the Inventory Adjustmentscreen (possibly by product category). Trying to capture everything in one opening balance screen for large volumes isn’t currently supported in Saasu.

1. Select Items > Inventory Adjustment and add line items as required using the plus icon next to each item in the screen.
2. Post to the Equity: historical balancing account (because you aren’t capturing these in the opening balances screens when using this method).

My inventory item opening balances don’t appear in the balance sheet

The balances won’t display in the Asset accounts by entering item opening balances. This is because when you enter your opening balances for the chart of accounts, Saasu captures in that area (View > Accounts > Opening Balances). Saasu doesn’t post a balance to the Asset account in the Inventory Opening Balancesscreen to avoid a double up – Saasu just creates the inventory quantity and value such as average cost. Once you enter the chart of accounts opening balances you will capture the value from there into, for example, an Asset: Stock on Hand account.

Workflow Example for Items

These are some simple diagrammatic workflow explanations for how things work in Saasu when trading inventory items.

P = Purchase, S = Sale, O = Order and » = change transaction type.

Buy stock and hold on balance sheet until customers order it:

1. PO – Order stock from your supplier.
2. PO » P – Stock arrives.
3. SO – Order arrives from customer.
4. SO » S – Stock shipped to customer.

Customer orders first and then you purchase stock from suppliers:

1. SO – Order arrives from customer.
2. PO – Order stock from your supplier.
3. PO » P – Stock arrives.
4. SO » S – Stock shipped to customer.

Stocktake, Shrinkage, Free Samples

Use the Inventory Adjustment screen to do this (Items > Inventory Adjustments).

For example, let’s say there are two units of Item A missing after you do a stocktake, or you are giving these away as free sample:

1. Click Add on the Inventory Adjustment screen.
2. Enter -2 in the quantity field.
3. Select the item – Saasu will fill in the unit cost for you, which can be overridden.
4. Select an account (eg Expense: Shrinkage or Expense: Free Samples).
5. Save the transaction.

Item / Stock Transfers

There are a few methods for handling stock location in Saasu. These depend on the version you are on and the specific requirements you have. Here are some examples:

Method 1: Inventory Adjustment

You can use tags to track stock location in Saasu. For example:

1. Tag purchases using the Warehouse tag.
2. When you transfer stock out, do an Inventory Adjustment transaction for negative quantities of items, leaving these tagged as Warehouse.
3. Click Save.
4. Duplicate this transfer.
5. When the fresh screen loads, change the quantity to positives of the same.
6. Save this transaction with the tag set to Store#1.

When you run an Item History report by tag, you will see the balance at each tag location by item.

Item Current Value and Average Cost

Current value of stock is based on the purchases and sales you have made. For example, if you have purchased 100 units @ $50 each and you hold these in inventory, you will have $5,000 in stock value. The average is based on all purchases you have made for the particular item held in stock.

Under the perpetual average system it will use the average cost as at the time you enter the sale.  So, if you go in and modify historical purchases or add in other transactions that may affect the stock average cost (more purchase, inventory adjustments due to stock take or shrinkage etc), the COGS posted to the sales will not get updated.

For example:

1. When you add a Purchase that has 10 units at $10 each so the average cost = $10.
2. When you add a Sale that has 1 unit at $15 each the average cost = $10.  The system DR COGS $10 and CR Asset: Inventory $10.  The average cost at this stage is still $10.
3. When you modify purchase, lets say change the unit price from $10 (Step 1) to $12.  At this stage, COGS for Sale added in Step 2 stays the same even though you have modified it to $12.  At a glance, it seems that the average is $12.  However, as at the time you modified the purchase, there were only 9 units left (not 10 as originally purchased).  The system re-calibrated the avergage cost to $12.222 each (sometimes referred to moving average method), which is the correct value because you just sold one unit at a time slightly lower average cost.

Adding costs to Inventory Items

Sometimes you want to build all your costs into an Items cost of sale value. To do this an Inventory Adjustment transaction is used to build an Item from all the components and related costs. Using Items > Inventory Adjustment > +Add you can create a transaction which converts the various costs into a single saleable Combo Item. The same process can be automated by going to the Combo Item and using the Build option.

e.g. I have a Box and some Freight and Insurance I want worked into my COGS.

Quantity	Unit Price	Total	Item
-10	10.00	100.00	ABC Widget (pre costs)
-1	20.00	20.00	Freight
-1	15.00	15.00	Insurance on ABC
+10	13.50	135.00	ABC Widget

Assessing Item Value

When you need to determine the total value of your inventory at hand, you can run the following reports in Saasu to find this out:

Balance Sheet Report

1. Select Reports > Balance Sheet from the main menu.
2. In the initial filters screen, enter the date for which you would like to see the value of your inventory.
3. Ensure All Tags is selected in the Tags pick list.
4. Click View Report – Look for the Asset Account under Assets to which you assign all your inventory items when you add them. The value against this Asset Account is the total value of stock on hand (excluding tax).

General Ledger Report

1. Select Reports > Accountants > General Ledger Detail from the main menu.
2. In the initial filters screen, enter the date you started your Saasu file (or any date, even before you think you started, if you cannot remember the exact date).
3. Ensure All Tags is selected in the Tag picker.
4. Select the Asset Account (from the Account dropdown) to which you assign all your inventory items when you add these to the inventory.
5. Click View Report – The balance shown at the end of the report is the total value of inventory items on hand (excluding tax).

Transaction By Account Report

You can also use this report to view the total value of inventory on hand.

1. Select Reports > Transaction By Account.
2. In the initial filters screen, enter the date you started your Saasu file (or any date, even before you think you started, if you cannot remember the exact date).
3. Ensure no tag filters are set.
4. Select the Asset Account from the Accounts pick list to which you assign all your inventory items when you add these to the inventory.
5. Click View Report – The balance shown at the bottom of the report is the total value of inventory items on hand (including tax).

Troubleshooting

If you run the reports and feel the figures do not seem right, there could be several reasons for this. Here are the most likely:

• You may still have purchases of type Order with payments applied that have not been converted to actual purchases yet. In other words, Saasu is treating this like a deposit against an order. Load the order, change it to Purchase, and save the transaction.
• You may have traded inventory items instead of treating them as assets. Treating stock as an asset is using the perpetual inventory system (when you click i inventory this item in the setup screen for each inventory item). Trading inventory items are generally allocated to Income or Expense/Cost of Sales accounts rather than Asset accounts.

What affects Average Cost and Stock Value amounts?

When you buy stock treated as Inventory, Saasu adds the value of that stock to an accumulated cost base. Saasu then simply divides this accumulated cost base by the quantity of stock to achieve an average cost price.

MATHS: Accumulated Cost Base / Quantity = Average Cost

We’ll look at some examples of what causes problems with average cost numbers that you weren’t expecting.

Editing old purchase transactions

1. Lets say you put a Purchase in for 10 unit of Surfboards at $500 each = $5,000 of stock value
2. You then sell 9 surfboards at $1,000 each = $9,000 of sale value
3. You then edit the original purchase and change the Surfboard price to $450 each because your suppliers final tax invoice was lower due to a volume discount you hadn’t allowed for
4. You have then altered the accumulated cost value down by $500 to $4,500.
5. There is now $0 of stock value left but you still have one surfboard. When you sell that surfboard it will have an ave cost of $0

Entering transactions out of date order
This can lead to problems where you products change in price over time.

Add a backdated purchase transaction
You have entered Sales and you haven’t necessarily booked the correct amount of stock value use when sold because you are entering a backdated purchase that may influence the value of stock.

Adding freight and other charges into purchases where sales already exist for that stock.
The affect here is that you are chnaging the stock value booked but subsequent sales are already in the system so that value is adding to the accumulated cost available. This can typically result in Zero stock positions but accumulated stock value still existing in the system.

Not entering correct opening inventory quantities and stock values before starting to use your Saasu file
Often we find customers working around the system by entering Quantity of stock in the inventory opening balance screen but not giving it any value. This has the effect of added quantity but not adding accumulated stock value. Subsequent Sales are then booked at zero Cost of Sales (Saasu has no accumulated stock value to draw upon). Often the user has the intent of going back to the inventory opening balances later and adding value but this will add accumulated stock value while possibly leaving quantities of stock in the system with very strange average costs number. As an example.

1. Lets say you add 10 unit of Surfboards to the Inventory opening balance screen for $0
2. You then sell 5 surfboards at $1,000 each = $5,000 of sale value.
3. You will have booked 5 Sales at $0 each.
4. You then alter the Inventory opening balance to add in your $7,000 of value now that you have some opening levels from the business owner.
5. There is now 2 units of stock at $3,500 average cost!

To fix this situation you need to either:
(a) Delete transactions associated with this item, enter the correct opening balances and then rekey the transactions.
(b) Do an Inventory Adjustment transaction to book the correct Cost Of Sales for the transactions that have already occurred.
Note that both methods may have impacts on remittances you may have already made to your tax authority so only perform these fixes if you are prepared to remit adjustments. Otherwise method (b) in your current accounting period is les

Conclusion

In essence it is about the situations where you aren’t entering transactions in the order in which they occurred. i.e. you aren’t actually capturing transaction when they happen but instead are retrospectively fixing, editing or entering data. Present time cost of sales and average costs numbers really rely on the value of stock you hold on balance sheet. If the past gets changed it has to be brought to account so it does influence the present day numbers.

How to Fix Incorrect Average Cost or Cost of Goods Amounts

This will depend on what actions you took, similar to those stated above, that caused the amounts to be altered.  Generally what you will need to do to correct the Average Cost / Cost of Goods Sold (COGS) is roll back the transactions to a date where the COGS is correct.  You will then need to update the sales or purchases transactions by :

• deleting the line item from the sale or purchase
• saving the transaction
• re-entering the line item that you just deleted with the same quantities
• you will need to amend these transactions in order

Undelivered Stock/Inventory items

An explanation follows of how to handle various stock situations where full delivery, partial delivery, or returns may need to be booked into Saasu.

Fully Received Stock Delivery

1. Open the existing purchase order from the purchase lists (use the contact as a filter).
2. Open the purchase order and change the type to Tax Invoice (or Invoice).
3. Click Save.

Partial Received Stock Delivery

This technique reverses the original purchase order and creates:

• (a) A new purchase order for stock yet to be received.
• (b) A new purchase tax invoice for stock already received.

NOTE: Sending the supporting documents for these transactions may confuse the supplier. You will need to decide whether you need to do this or if you are happy for them to rely on the original purchase order for simplicity. Currently Saasu doesn’t fully support partial deliveries, so this example is a method for dealing with this situation. Depending on the strictness of your received goods accounting, you should consult your accounting advisor regarding the appropriateness of this method.

1. Reverse the original purchase by duplicating it and creating the same transaction with negative quantities in the line items.
2. Apply a payment to both at once for net zero amount to close both transactions.
3. Create a new purchase order for the stock not yet received.
4. Create a new purchase invoice for the stock already received.

Excess Supply of Goods

Sometimes your suppliers send you more goods than you ordered. This can happen for several reasons. Handling this situation in terms of workflow depends on your internal procedures. It also depends on whether you have received more stock in error or whether your supplier has done this intentionally. There are several ways to handle this situation in Saasu. We have provided a few below that may or may not suit your needs. You might need to seek advice regarding the appropriate workflow and procedures you need to adopt for your particular situation.

Methods for Handling Excess and Surplus Stock or Supplies

You agreed to take the extra goods even though they were sent in error:

1. Create a purchase order or purchase tax invoice for the excess stock/goods received.
2. Convert your existing order into a tax invoice.
3. Apply your payment to both, clearing them from the Accounts Payable register.

You believe the original purchase order you sent was incorrect:

1. Reverse the existing purchase order with an equal and opposite one.
2. Create a new, corrected purchase order – Use the Duplicate button to create a copy of the original transaction and then change the date and sign to negative on the quantity field.
3. Click Save.

Because there are no payables on purchase orders until these are converted to tax invoices, there is no need to handle this element in this case.

You entered the purchase order for your own records and you don’t normally send them out:

1. Edit the existing purchase order to reflect the new amount.
2. Click Save.
3. Using the dropdown to convert the purchase order to a tax invoice – You do this by changing the Type field.
4. Click Save.

NOTE: This method won’t be appropriate if you sent the original to the supplier or if you have a procedure in place to only ever reverse and re-enter transactions (rather than edit them).

Disassemble

Saasu has assembly inventory, which means you can build new products, services, and kits from individual items. In Saasu, these built products and services are called combo items. A major benefit is that you can further build from combo items and even disassemble or unbatch combo items back into their components. To do this:

1. Create your item by selecting Add > Item – This item should represent the final widgets that result from disassembling/breaking a batch.
2. Create your combo item by selecting Items > Combo Items > Add.
3. Buy your inventory items in as combo items using a Purchase screen – To do this, you select Add > Purchase.
4. Ensure you have the purchase in stock because you can’t disassemble something that isn’t in stock.
5. Select Items > Combo Item.
6. Click the pencil icon beside the required combo item.
7. Enter -1 (minus one) in the field beside the Buildbutton to disassemble one combo item into its parts (eg 10 item parts or widgets). The Inventory Transfer transaction that does this will load so you can confirm and save it.

You will notice the combo item falls by 1 unit and the item widgets go up by 10 units:

• When you run the Level C Reports > Level Check report.
• In the On Hand column of the Item and Combo Item list screens.

For example, the combo item would reduce by 1 on hand for $100 value and item widgets would increase to 10 on hand for $10 per unit of value.

Backorders

PIPELINE: Saasu is planning a backorders release that allows for a simple approach for this situation.

Backorders occur when not all your stock arrives and you need to fulfil an order from a customer.

Backorder workflow in Saasu

In these examples, the customer buys a TV and speakers. You have created a sales order with two line items listed - A TV and some speakers. Later you only receive the TV from the supplier and decide to ship it to the customer despite the speakers not having arrived.

Partial Delivery of Stock

1. Create a new sales order for the speakers.
   TIP: A quick way to do this is to duplicate the original purchase order and remove the TV.
2. Remove the speakers from the original sales order.
3. Convert the original sales order to an invoice (now with just a TV on it).

Partial Delivery of Stock (Paid in advance)

This example is the same as the one above except that you need to reassign the payment to be split across the new and the original sales order.

1. Create a new sales order for the speakers.
   TIP: A quick way to do this is to duplicate the original Purchase Order and remove the TV.
2. Edit the payment on the original sales order so that it’s split across the new sales order and the original one – In other words, the amount relating to the TV would be applied to the original sales order and the amount relating to the speakers would be applied to the new sales order.
3. Remove the speakers from the original sales order.
4. Convert the original sales order (which now just has a TV on it) into an invoice in order to close this.
5. Later, when the speakers come in, you can close that sales order to be an invoice.

Changing Inventory Methods

There are several inventory methods available. You can choose the one that suits you best according to whether you plan to track inventory item stock levels.

You may have started using the inventory system in a particular way only to later receive advice or learn that another way is better for your business. Simply changing the setting under Inventory Itemswon’t create this change if you have already created transactions using these Items. This is because historical transactions are affected. If Saasu simply allowed the change it could create differences to what you have already reported to advisers, tax authorities, etc.

The following table highlights two common situations and shows you ways you might consider dealing with them.

Your chosen inventory method has tax implications

Before choosing or making changes to your inventory accounting methodology be sure to check with your advisor and consider the impact on management reports, tax remittances, and the like as a result of changing historical transactions. As a general rule, changing historical information in accounts may lead to differences between what you report to advisors and tax authorities versus what is in your accounting system.

Current Method	New Method	Approach Options
Inventory, Buy, Sell	Buy, Sell	You have been tracking stock using the perpetual inventory system using an Asset:Stock category or similar. That is, your inventory items are set up with Inventoryticked.When the Inventory Item has been used in transactions: Duplicate your inventory items and save them with new item codes. Re-assign purchase and sales transaction items to these new inventory item codes. Note that you need to work from the most current transaction backwards to the oldest transactions as the inventory system won’t let your inventory levels go negative. Start a new inventory item and Item Journal all the inventory held under the Inventory method over to the new code(s). Delete all and then re-enter all transactions attached to the inventory items. This approach isn’t recommended when you have lots of historical data. Set old inventory items that will no longer be used as Inactive. When the inventory item has NOT been used in any transactions: Find the inventory item in the Items list by selecting Items > Items from the main menu. Click on edit icon to access the Edit Inventory Item screen. Untick Inventory. Click Save.
Buy, Sell	Inventory, Buy, Sell	You have been buying and selling inventory items but not tracking the amount on hand in an Asset:Stockcategory or similar. You decide to keep track of inventory items. If the inventory item has been used in transactions: Duplicate the old inventory item. Create a new item code (eg something similar to the old code for this item). Tick Inventory. Select an Asset Account. Click Save. Set old inventory items that will no longer be used to Inactive. If the inventory item has NOT been used in any transactions: Find the inventory item from the items list by selecting Items > Items from the main menu. Click the edit icon to access the Edit Inventory Item screen. Tick Inventoryand select an Asset Account. Click Save.

Customs and Freight Charges for Items

This method covers the purchase of imports where you want to include tax, freight, and insurance in the inventory value for imported inventory items.
To enter an Import Purchase where you would like the inventory value to include other costs often billed by a customs agent:

1. Set up the inventory item as –no tax code– since tax is not payable to the offshore supplier in this example (i.e. it is a foreign tax you don’t care about and/or don’t need to track) .
2. Add a purchase for the goods or services:

Quantity	Item	Description	Tax Code	Unit Price	% Disc.	Line Total
10	SRW1	Small Red Widget	{leave blank}	50.00		500.00
Total Amount Incl. Tax:						500.00
Total Tax:						0

1. Later when we receive our customs and freight invoice we can establish the tax charged ($50 in this example) and adjust the inventory value to reflect this. By doing this, you are effectively removing the inventory with no tax code and putting it back in as having tax, using the appropriate tax code for your zone.
2. Add a purchase to capture tax, freight, and insurance.

Quantity	Item	Description	Tax Code	Unit Price	% Disc.	Line Total
-10	SRW1	Small Red Widget	{leave blank}	50.00		-500.00
10	SRW1	Small Red Widget	Your Zone Tax Code*	55.00		550.00
1	AIR	Freight Air	Your Zone Tax Code*	22.00		22.00
1	INS	Insurance	Your Zone Tax Code*	11.00		11.00
Total Amount Incl. Tax:						83.00
Total Tax:						53.00

In the above example we established from our customs invoice that $50 Tax is being charged. If this is the case, you only want to do the remove and add back line items in the appropriate amount that reflects the tax portion. In other words,  in the example above, if it were only $30 tax (not $50) you would only remove $300 worth of inventory and add $330 of inventory back with your zone tax code.

Negative Inventory

Quite often businesses agree to sell goods before they actually have them. Consequently, when you use an inventory system that stores stock as an asset, this poses a problem because the effect can be negative inventory. Drop shipping, eBay sales, and pre-ordering can all lead to this situation.

If your transaction practices follow a fairly standard process in day-to-day commerce, it shouldn’t ever be an issue. If you try to create a sale for goods you don’t have yet, most accounting systems will stop you, as does Saasu. It does this because it expects a different workflow. Accounting systems expect a sales order first, and to see that change to a sale later when a trigger occurs for you to change its status. In Saasu, this is the first drop down in the Add/Edit Sale screen. Changing a Sales Order to a Sale moves any deposit to income and accounts for Sales/GST/VAT tax to be payable.

For example, the trigger could be the receipt of goods from the supplier or the delivery of goods to your customer. It depends on your workflow and accounting procedures, and how they relate to laws and regulations regarding ownership and transfer of ownership in your tax zone.

In Saasu you can only run negative inventory (other than the approach mentioned above) if your inventory items are set to Buy and Sell (Not Inventory).

An inventory system can’t operate on negative inventory because it would send Asset: Stock account into a negative balance, which the accounting profession doesn’t like. Consequently, some people don’t run inventory as assets but instead they trade their stock through Income and Expense account Buy and Sell options only). Again, this is a different accounting/tax method, so check with your accountant before making these decisions.

Negative Current Value

Sometimes editing a transaction associated with an inventory item might not be allowed in Saasu.

Example of this situation:

Saasu tells you Unable to complete the requested operation as it will cause negative current value for WIDGET X (Current value will become: -0.100).

What happens is explained in this example:

1. Start with no widget is stock (average cost is $0).
2. Buy 1 widget for $50 (average cost is now $50).
3. Sell 1 widget for $100 (average costs $0 again now because we have no widgets left and have booked $50 cost of sale and profit to the accounts with journals in our business logic layer).

At a later date, changing the transaction at step 2. to say $51 changes the current live average cost to minus $1.

Why can’t Saasu just allow me to change this and accept the negative value

Saasu can’t allow negative inventory values because this doesn’t make financial/accounting sense in a perpetual inventory system. If we allowed this and ignored the accounting logic, we would need to remove and add back all the more recent transactions in the correct order. This would create new Income and Cost of Goods sold entries in the ledger for all those transactions. In other words, we might upset the integrity of the accounting and tax reporting if, for example, commissions, P & Ls, or tax remittances based on this data had since been executed on.

Can I force this in? I don’t mind that the accounts are affected.

Yes, you can following one of these approaches:

1. Delete the sales transaction ahead of that purchase in time (keep a printout or screenshot with the invoice numbers and all the data handy).
2. Adjust the purchase to the new numbers you have.
3. Re-enter the sales you removed earlier.

-or-

1. Enter a separate transaction to capture that $1 value as a journal or another purchase transaction which you note to be an adjustment. You aren’t booking this against that widget.

Balancing Stock Value to Balance Sheet

When you run your stock on Balance sheet in an Inventory account such as Asset:Inventory or Asset:Stock on Hand you can check this value of stock against the Stock Value report in Saasu. This reconciliation process would also be done alongside Accounts Payable and Accounts Receivable reconciliations.

Sometimes these get out of line due to data entry, account coding or other issues. Here’s a few examples than can cause this account to get out of balance:

1. When you setup your Items you would normally specify the Balance Sheet account that you hold inventory in such as Asset:Inventory. If however you setup the item and use the incorrect account then the stock won’t necessarily be booked to the balance sheet when you buy it in.
2. Inventory Adjustment transactions are often used to write-down, write-up or write-off stock value. Sometimes Saasu users mistakenly code this transaction to their Asset:Inventory accounting instead of the appropriate Expense: Damaged Goods account (in the example of write-down or write-off)
3. When you start using Saasu you may enter your opening balances into the Saasu opening Balances screen. However if you are a business that trades stock. You should Purchase your inventory into Saasu after setting up your inventory Items. This makes sure that value will be available in the inventory system and thus the Stock Value report when you run it.
4. If you enter any transaction in Saasu and code to the Asset:Inventory account you are adding value into the balance sheet. However if this transaction isn’t a true Inventory type Purchase or Sale then you aren’t capturing the stock quantity and value inside the inventory system.

Typically accountants will run the Balance Sheet and Stock Value reports for the same date to verify they match. If not they tend to re-run the reports back through time until they get a match. Then they will run the report for each day or week in that month to find the day where the error occurred. They then investigate using the General Ledger Report or possibly the Item History Report report to work out why there is a difference.

Item Attributes

Attributes are available with the Enterprise edition of Saasu.

Item attributes enable you to track detailed information about products, commodities, services, or virtual items that you trade in your Saasu file. For example, you may want to apply an expiry date to an item, specify it’s colour or size, and which stores have it on hand.

In Saasu we provide for some built-in item attributes that are commonly required such as serial numbers, batch numbers, and location. We can also add other item attributes that meet your business needs.  The maximum character length for an individual attribute is 32 characters.

To add attributes to your Saasu file raise a service ticket and we will add them.

Here are some examples of item attributes and how they relate to different business models:

• Surfboard Shop – Length, Colour, Shape
• Clothes Shop – Size, Colour, Batch number
• Electronics e-tailer – Serial Number, Colour, Memory Size, Connectivity Type, Warranty
• Heath Food Shop – Serial Number, Expiry, Batch Number
• Music/Software – Product Key, ISIN, Expiry/Renewal
• Book seller – Author, Publisher, Format, Genre or Category

Item Attributes Example
Here’s an example of a purchase of surfboards with different Item Attributes which demonstrates the capability of the attributes area in Saasu:

1. The Edit Purchasescreen looks like a normal Saasu purchase screen except that there is an attributes icon to the right of the Description field.
2. When you click the Item Attributes icon, you can select or create attributes for that item.
3. The Attributes tab on the Items Details screen lets you see the current status and quantity for that item.

View the Attributes for an Item

1. Select View > Items.
2. Open the item using the pencil icon.
3. Click the Attribute tab.

Transfer Stock Items

Stock transfers in Saasu are performed by an internal Purchase then Sale.

1. Create a contact and set the First Name field to Transfer – You can use this contact for all internal transfer transactions.
2. Add a purchase for the stock you are transferring.
3. In the items list area of the purchase, use the attribute icon to load the Attributes window.
4. In the Location column, enter the name of the new location you are moving the stock to.
5. Set the unit price to be the same as your current average cost for that item if you don’t want to realise value in your profit and loss
6. Enter payment details to be a clearing type bank account (eg Asset: Stock Transfers Clearing – Create one if you don’t have one already).
7. Choose Save.
8. Choose Duplicate.
9. Choose the internal contact called Transfer again.
10. Set the Quantity to be a negative amount of stock. This has the effect of reducing the stock in the location you set in the next step.
11. Go into the attributes window and select the location you are moving the stock from (the available locations where you hold stock).
12. Set the unit price to be the same as your current average cost for that item.
13. Enter payment details to be a clearing type bank account (eg Asset: Stock Transfers Clearing – Create one if you don’t have one already).
14. Save and close the transaction.

Payments are netted in the clearing account so there is no financial impact.

TIP: If you don’t want transfers to appear in the Purchases report, leave the contact blank in these transactions.

Combo Items

Combo Items are used to build products in your business from your Inventory Items. The accounting method you use to track Inventory and Combo Items is an important decision you make with your accountant so before proceeding ensure you know and understand what method you want to use.

Combo Items are normally finished goods that are made up of other Inventory Items. We will use an example to illustrate how you can use this feature. Suppose that we sell a computer package that is made up of a CPU, Motherboard, and two hard disk drives. All of the items making up the computer package are Inventory Items.

Setup a Combo Item

1. Setup the Inventory Items making up the Combo Item if you haven’t already done this then see the help item for the inventory Items. You create one Inventory Item for CPU, one for motherboard, one for hard-disk drive.
2. Setup Combo Items:
   1. Click on the add icon adjacent to Combo in the Main Menu. The Combo Item screen will appear.
   2. Enter a Code and Description for the Combo Item. If you are moving from another accounting package you may wish to use the same code structure else think carefully about your new structure. There are many websites and books that can provide information on name conventions for inventory.
   3. Setup the Combo Item. On the Items to build section, you will enter:
      • 1 x CPU
      • 1 x Motherboard
      • 2 x Hard Disk Drive
   4. Select an Asset Account. For example “Asset:Stock at hand”
   5. Under the ‘I buy this item’ section:
      1. select the appropriate Purchase Tax Code you will use.
      2. enter a minimum quantity for restocking alert
      3. select a default primary supplier and their item code (if you wish to track this)
   6. Under the ‘I sell this item’ section:
      1. Enter your Selling Price including any tax
      2. Select an Income Account where sales income will be booked to e.g. Income: PC Sales
      3. Select a tax code that you will use when selling this Combo Item.
      4. Select a cost of sales Account. e.g. Cost of Sales: Desktop Computers
   7. Click Save or Save and Close to complete the setup of a Combo Item
3. Build your Combo Items. Let’s assume that:
   • you don’t have any stock for the computer package.
   • You have enough spare parts to build two units of that computer package

   To sell this computer package, you will need to build it first. To build two units of this computer package:

   1. Open the Combo Item.
   2. On top of the ‘items to build’ section, enter 2, then click Build.
   3. You will be taken to Item Transfer screen, which basically shows the movements of stocks required to build this Combo Item.
   4. Click the Save and Close button and you should be taken back to the Combo Item screen.

You now have two units of the computer package on stock that can be sold.

Combo Items List

Combo Items are kits, packages, bundles or assembled goods that you build from Items in Saasu.

The List of Combo Items page is used to search and edit Combo Items you have already added to Saasu. After you display the list of Combo Items you can also Add, Edit and Delete them. You can also click on the Code or the Description column headings to resort the list as required.

Show – The first drop down lets you filter by Active, Inactive or — All — items
items with – The next drop down immediately following determines how you want to search. You can search by Code or by Description.
starting with – The start or part of the Code or Description in the field provided.
Add – Add a new Combo Item using the + icon link.
Edit – Edit a Combo Item by clicking the pencil Edit Icon for that row.
Delete (or set to inactive) – Delete or set a combo item to inactive by clicking the trash can icon for that row.

Inventory Transfers

The Inventory Transfer screen can be used to:

• Removing items from your inventory when you have used them to build folio/combo items. That is, reducing the quantity of components used and increasing the quantity of combo items built.
• Move items between different locations (e.g. from warehouse to a store).

In this example the user has built a toy using (a) Wheels and (b) Chasis. The Folio/Combo Item built from these components is a Toy Car:

1. Enter the Date that the transfer is effective for.
2. Enter a summary outlining what the transfer represents. e.g. Build Toy Car
3. The transaction should have the following line items:
   

   Quantity	Item	Unit Cost	Line Total
   -4	WHEELS	0.20	0.80
   -1	CHASIS	1.50	1.50
   1	TOYCAR	2.30	2.30

4. Check that the out of balance is reporting $0 and then save the transaction.

Inventory Transfer Lists

The Inventory Transfer List screen is used to search and edit Inventory Transfers you have already added to Saasu. Inventory Transfers allow you to:

• Transfer items when building combo item. That is, reducing the quantity of components used and increasing the quantity of combo items built.
• Move items between different locations (e.g. from warehouse to a store).

To view a list of Inventory Transfers

1. Enter the Date range you wish to search that the transfers occurred.
2. Select a Tag you may have applied your transactions to in order to further filter down what you require in the list.
3. Click the Show button to generate the list.
4. You can click on the Date column heading to further sort the list as required.

Other features and functions on this screen

	add a new Inventory Transfer from the list.
	delete any checked Inventory Transfers from the list.
	edit a Inventory Transfer in the list.
	add another Inventory Transfers the same as this one.