Help! Mfg. accounting-inventory/COGS chart of accounts

[Shaun @ Tru6]

Originally posted by bb80sc
Call me crazy, but this thread is actually making me miss accounting a bit I use to reconcile every account to the penny every month. There were several times when I just could not get things to reconcile. Then, I'd wake up at 2:00 in the morning and the answer would be there. Sure enough, I'd go into the office the next day and that "was" the solution. BTW, my wife just saw this thread and she really likes the purses. Let me know how to order one!

Good luck.

Hi Brad,

I too like the precision, I just wish I knew what I was doing! I am a far better marketer than accountant, that's for sure! I know just enough to get me in trouble.

Which purse would you like? Just let me know which one and color, take 25% off the suggested consumer price, add $4.50 for shipping.

You can PayPal orders@g9girl.com, or if you want to send a check, send to:
G9Girl, Inc.
74 Foster Street
Cambridge, MA 02138

I'll get one out straightaway.

Thanks so much.

Shaun

[LeeH]

Wow! I'm having flashbacks to my business. We had the same exact problem, but we made window screens. Each screen was made up of a certain amount of extruded aluminum, four plastic "L" corners, screen mesh, plastic spline, and mounting hardware.

We used Quickbooks, but seems like we had it set up to remove each item from our parts inventory every day as we added finished screens to our sellable inventory.

My opinion is that there's a point where you just spend the money and call your accountant. You don't want to get 6 months into this venture and then find out your accountant wants/needs it done a different way.

[dtw]

Good points above- there may not be the capacity to make the reports you need in MYOB, but you may not need to invest in a new ERP system/acctg package just yet. Every package these days has the ability to dump data to excel - you may be able to do the analysis and reporting you need from there, depending on your excel skills.

Costing, as mentioned, should be based on your BOM (bill of materials). Looks like you've got the right idea on generating those. Either in MYOB or excel, you should have no problem analyzing your sales mix, determining profit leaders,etc, by tracking revenue and associated margins by SKU.

Not sure I know enough to offer an opinion on the purchase entry issue? Are you saying that you have 2 months worth of purchases you need to put into your package, to correctly reflect the cash burn you did before you bought the package? Yeah you could probably just run a batch entry through the P&L...if it was me I would probably just key them all individually but that's the accountant in me.

[Shaun @ Tru6]

Hi Dave,

thanks for the advice, looks like I am good to go on the whole inventory, COGS, sales issue. yes, I can dump to excel, I'm just one for automation and running reports internally would have been great.

In truth though, if this business works out in the scale I hope, a custom written application that ties bookeeping with web-based orders (both online store and boutique/teen-based sales reps) with inventory mapping will be the way to go. I could probably get something written in Filemaker Pro for $5K or so.

RE: entering historical data, I set up a temp clearing account in liabilities as a credit card so that running each transaction through the bank register defaulted to that account, I now have vendor historical data and even created a few jobs like "purse design" such that all R&D with purses was categorized.

Next I'll just make a JE against the CC account and credit my Capital Paid In.

Got our final heat transfer images for testing in today and they look great. Early September we'll have a complete line.

OK, on to setting up a merchant account...

[rvanderpyl]

OK I make a living, selling, installing and customizing Accounting Software.

What you need is a package that can

1. track your actual raw materials into inventory (GL Account RAW MAT 1300). Purchasing and AP
2. Has BOM (Bill of Materials) and can do a build in which it pulls the required items from your RM inventory, rolls up the costs and allows you to either enter actual or a factored labour componenent
3. Put those finished materials (GL ACCT 1310 Finished Goods) into stock with the cost as built attached.
4. Track the sales of each built item against it's cost. (SALES GL Acct 4000, COGS Account 5000 ,maybe a pair for each product type if you want to break that out. IE purses, shirts)
5. Allow you to report on sales of sku's with COGS vs Selling for a profit analysis. Plus a few million other reports for AP/AR Fast/slow moving etc.

You mention a WEB interface as well.

And you need GL for statements, probably could use Bank Reconcilition functions, straight AP for expenses. Maybe a Kitting function to allow custom combo's that are put together only on order. IE a leather purse + gold chain strap

You might be able to get a custom app written for $5k, but it is only going to have what you think of when it is being written, and everything you want to add will cost another $1k.

Looks like MYOB has some of that, however it doesn't appear to have an actual BOM function, or any WEB capabilitys.

I suggest taking a look at something like Simply Accounting Pro which has a BOM and offers a predefined 'Webstore' option. Only problem is it is only available for PC's. Mac's aren't very common in accounting departments.

Note, I have not actually used Simply Accounting, I sell a higher end package, but I try to stay current on what is available so I know whether I am going to be put out of business by a $250.00 system soon

[techweenie]

Shaun, I've been using MYOB for my (service) business for over 8 years.

Your account setup looks good.

But I think you may be trying to do an analysis within MYOB that is much better handled separately. Consider that assembly and packaging labor and overhead/utilities, plus a portion of G&A, plus actual packaging materials are all part of your COGS.

Because fixed (and some variable) costs will have a 'sliding' impact on COGS, this is a separate analysis better handled in Excel, IMHO.

Using Macs for accounting is just like using Macs for anything else: just like a PC without the crashes, viruses, worms, trojans... and massive lost productivity.