Getting Started with Inventory
NOTE: Inventory methodologies have tax implications. Before choosing your preferred method, obtain advice as to what method is best for you from your advisors. It's not easy to change Inventory methods once it is locked in, however it is possible.
1. Inventory Guide
Step One. Trialling Inventory In 7 Steps
- Import Chart of Accounts - Firstly, Chart of Accounts (full tutorial here) should be setup, as this will be needed these when setting up Inventory items or importing transactions.
- Setup Contacts - Next, setup some customers. A tricky part of this setup was taking note of the 'Multiple Contacts and Addresses per Company' arrangement, as their postal addresses are often different to the billing address. This is covered in this help page.
- Import Inventory Items - You can use spreadsheets to import Inventory items. Read this guide to help you import items via spreadsheet. We suggest a importing a small batch of items initially to ensure you are clear about the process.
- Set Stock Levels - Stock levels can be entered in two ways:
Opening Balance - directly affect stock on hand levels, but it does not post to ledger accounts which means you will need to manually journal entries. This suits small quantities of stock.
Purchase Order - enter a past-dated order to receive stock in, in effect recording the actual purchase at the time. This suits larger quantities of stock.
Both methods work depending on how much stock you have, and also based on the advice of your Accountant.
- Set Stock Levels, and Locations using Attributes - You will need to request attributes by creating a service ticket before they are visible, for example: Location, Colour, Size. > Setup Inventory Attributes on how to set stock levels and locations with Attributes.
- Testing out Inventory Tracking - The best way to see how Saasu tracks stock is by creating test invoices. We will enter in a sale invoice to see their impact on stock. Let's review current stock values prior to this sale:
Note: Current and Average cost is based on the Purchase invoice figures
In order for Attributes figures and stock figures to be accurate, click on the 'Label' icon at each line level and select the particular attribute you want to sell:
As soon as the sale invoice is saved, despite not receiving payment yet, stock level will immediately be updated, in one of two ways based on the type of invoice:
a) Sale Order - On Hand levels still remain unchanged, however note the updated figures under Committed - this is the quantity of items waiting to be fulfilled in Sales.
b) Tax Invoice - bypasses the Committed values and directly reduces your stock levels. You might use a Tax Invoice type when you have immediate stock on hand to ship out for example.
- Quickly Finding Data - You can quickly get to data by doing some simple searches in Jump, which is the universal search bar in Saasu. This means if you are on the phone to a customer, you can quickly bring up their transactions. Or if you want to search for any invoice, contact or item you can do so within the same screen!
2. Data Migration
If you have existing data, such as MYOB, you can follow instructions on this page to migrate it over. Some tips for migration are:
- Always test a handful of data for import first
- Check data is consistent, be wary of commas in descriptions as CSV turns commas into column breaks
- Import no more than rows of 1000 per spreadsheet at any one time
- Consider leaving historical transactions behind, instead utilise CoA Opening Balances (and for Inventory)
Saasu's recommended order of migration is as follows:
- Chart of Accounts - Before this step, check your tax codes against Saasu via Settings (for this file) > Tax Codes to make sure they exist.
- Inventory Items - Before this step, refer to Importing Items for hints on how to fill in some of the fields.
- Open Transactions - Both sale and purchase invoices can be imported via spreadsheet. But please note that we suggest you don’t bring in historical transactions prior to your changeover date. As data from multiple financial years can be tricky to line up between systems, as well as the inability to mark invoices as 'paid' during importing. We suggest you contact our Accounting Partners to assist you with this.
This help guide provides the full step by step instructions, in more detail.
3. Individual Items
There are two main methods to setup stock levels initially. However as the effects on ledger accounts are different for the methods, consult your Accountant for the most suitable method for your business.
1. Purchase Order method
For new stock, simply enter in a Purchase Order for the quantity that is being ordered. Upon delivery of the goods, change the type to 'Tax Invoice' so the stock on hand levels are accurately reflected.
For existing stock (or historical purchases), make sure you backdate the date of the invoice, and save the invoice directly as a 'Tax Invoice' (as stock is already on hand). This method ensures that your Balance Sheet is updated with the correct values at the correct date, as well as the stock on hand levels (Tax Invoice) and average costs.
2. Opening Balances method
Goto View > Items > Items, then click on the 'Opening Balances' (OB) button (top right). Enter in the starting date of the OB, as discussed with your Accountant, followed by the quantity and unit costs.
Note the following about this method:
- This method does not post to the Balance Sheet, but will update the stock on hand levels and average costs.
- You can only enter one OB at any given time. Any changes made will override the previous entry.
- Combo items cannot be updated using the OB method, you must build them.
4. Combo Items
In order to update stock quantities for combo items, you will need to build them. Follow this help note on how to setup and then build combos.
Note this is a manual process and you cannot import stock levels.
5. Backorders, Shipping, Freight and Discounts
Back Orders and Recommended Processes
Backorders are when a sale occurs on an item that is not in stock. This sometimes happens for Janet, who needs to manage the process based on how the supplier delivers the good. It is further outlined in this help note:
- Fully received stock delivery (purchase side) - use this method if you receive a full delivery from your supplier, then update the sale invoice accordingly
- Partial received stock delivery (purchase side) - use this method if her supplier has only delivered part of the invoice, a duplication and invoice amendment is required here
- Partial delivery of stock (sale side) - duplicate the sale invoice in to a) fulfillable order, and b) pending order
- Partial delivery of stock where it has been paid in advance (sale side) - duplicate the sale invoice in to a) fulfillable order with payment details, and b) pending order with payment details
Drop ShippingRefer to this help page on drop shipping. In Saasu, you will still create these items but do not select the 'Inventoried' option.
Freight is treated like any other item in Saasu. As there isn't an option to automatically handle freight, another item needs to be created for it. When invoicing, you will need to use the 'Item' layout to select this option. Learn how to manage customs and freight
You can also create freight in 'Service' layout, like so:
Managing Customs duty and other charges
Sometimes you may order goods from overseas suppliers. Often there are customs duty/taxes charged, as well as 100% payable GST amounts. For customs charges, follow instructions on this help page to enter it into Saasu. Each customs charge has to be entered in manually. For pure GST amounts payable in full, follow instruction on this help page to enter it into Saasu. This way, when you run a BAS report the GST figures are correct.
Discounts can be applied at one of two stages, but only using the 'Item' layout:
- At Contacts level - You can set a contact to receive a percentage discount, each time they are added to an invoice.
- At Invoicing level - You can apply a discount percentage manually during invoice creation.
6. Inventory Management and Reporting
With items setup correctly, Inventory Management is then possible. Here is a list of processes that is available.
Virtual items are not physical items, but you still wish to buy/sell them and keep a record of their transaction history. Virtual Items option should be ticked for labour, time so they can be included in Combo Items as well. To setup a virtual item, Add > Item and then in the item setup screen make sure you tick the Virtual check box.
Vouchers and promotions
Vouchers and promotions can be flagged at the Item setup page only. This data can also be obtained when you export a list of items from the main Items page.
At this stage there are no alerts within Saasu, so you will need to manage the alerts manually.
Item History Report
This report allows you to see the history of inventory on hand, and will show both items and combo item. It will also show the COGS and margin made on products that are inventoried. This report is useful for estimating re-order quantities, observing demand trends for product or simply to check you have correctly captured and timed transactions involving inventory.
The Item History report works on the basis of a Perpetual Inventory system, where it is updated on a continuous basis. Please see your Accountant if you are unsure how this affects your Inventory. The various reports to help you with managing stock are:
- Level Check - after a stocktake, enter the item counts. Any differences will generate an inventory adjustment posting it as a journal entry.
- Stock Alert - run this report to show which items are running below their 'Restock' quantities and need to be re-ordered. Simply click on '+ Order' or '+ Build' once the results have been verified.
- Stock Value - a quick overview of all items and their on hand, average and total values for a specific date. This is particularly useful for stock reconciliation processes, to check against the relevant Balance Sheet/Aged Receivables/Payables reports.
Attribute ReportingThere are two Attribute reports (more details):
- Item Attribute History - a history of all transactions made within a date range, for each attribute category, sorted by the invoice date
- Item Attribute Summary - similar to the Stock Value report, it gives the on hand, on order, committed and available figures as at the date you run the report