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  • I Buy, I Sell, I Inventory and linked accounts

 

 

ANSWER ID:9178

When setting up an inventory item, you'll need to select from the options I Buy, I Sell and I Inventory. When you select an option, you'll also need to specify a "linked account" to ensure transactions relating to the item are posted to the applicable accounts.

This support note explains these options and which might be best suited to your business.

'I Buy', 'I Sell', and 'I Inventory'

The use of these options either individually or in combination is detailed in the table below.

Option

When to use

Examples of use

'I Buy' (only)

Enables you to create item purchase invoices without putting stock into the system. Does not track stock levels. Will enable you to produce item purchase reports. Used in a Periodical Inventory system.

Retailer - high turnover business. You can buy physical or non-physical items such as a service.

'I Sell' (only)

Enables you to create item sales invoices without having stock in the system. Does not track stock levels. Will enable you to produce item sales reports. Used in a Periodical inventory system.

Retailer - high turnover business. You can sell physical or non-physical items such as a service.

'I Inventory' (only)

Work In Progress. An interim component of the auto-build process. Used in a manufacturing process. Tracks the level of stock on hand. Used in a Perpetual inventory system.

Manufacturer - You would not inventory services.

'I Buy' and 'I Inventory'

Raw Materials. A base material of the auto-build process. Enables you to create item purchase invoices. Will enable you to produce purchase item reports. Used in a manufacturing process. Tracks the level of stock on hand. Used in a perpetual inventory system.

Manufacturer

'I Sell' and 'I Inventory'

Finished Goods. The final output of the auto-build process. Enables you to create item sales invoices. Will enable you to produce sales item reports. Used in a manufacturing process. Tracks the level of stock on hand. Used in a Perpetual inventory system.

Manufacturer

'I Buy' and 'I Sell'

Enables you to create item purchase invoices and item sales invoices without having stock in the system. Doesn't track stock levels. Will enable you to produce purchase item and sales item reports. Used in a Periodical inventory system.

Retailer - high turnover business

'I Buy' and 'I Sell' and 'I Inventory'

Enables you to create item purchase invoices and item sales invoices. Will enable you to produce Item Sales reports. Used in a manufacturing process. Tracks the level of stock on hand. Used in a Perpetual inventory system.

Retailer - low turnover business

Inventory linked accounts

Linked accounts make the software easy to use. By using linked accounts certain types of transactions are automatically linked to the ledger accounts you have chosen. Just as there are linked accounts for tracking your debtors and creditors, there can be linked accounts to track sales, purchases and the value of your inventory items.

Here's a description of the accounts associated with the I Buy, I Sell and I Inventory options.

Account

Description

Income Account for Tracking Sales

The account to use for recording income from the sale of this item.

Asset Account for Item Inventory

The account to use for recording the on-hand value of this item.

Cost of Sales Account

The account to use for tracking the costs of producing or purchasing this item.

Expense Account for Tracking Costs

The account to use for tracking the costs of purchasing this item.