MAINTAINING OF INVENTORY ACCOUNT

STEP: 1

When you are running your company then you are engaged in different activities whether your operations concerned with services, manufacturing, wholesale purchasing etc. It depends upon the type of business that you have to purchase inventory or you are just concerned to sale it out by buying it from any other source, but in such a case you can see that you are involved in both activities, first you buy the inventory and then you sale it.

Sale and Purchase both occur in this case, so now we will see that how we will maintain our inventory account in Peachtree. The first step is to open your company which is already made by you in Peachtree software, after opening it the below window will open in front of you.

STEP: 2

After opening your company you will see the below window from where you start making your inventory account, first you will go to the toolbar in which you click on “maintain” when you click on it you will see different options in this tab.

As you are going to make your inventory account so you will choose “inventory items” from this window.

                                                            

STEP: 3

When you click on inventory items then the below window will open, you can see different options here which are concerned with the inventory or products which you buy or sell. It is compulsory to fill the requirements which are necessary to keep records in this software, if you did not mention then it may be possible that an error will be occur or may be your financial statements are not correct because of not providing the correct information which are required to be fill in this software, so one mistake can create many problems and to overcome it you should provide the exact and real information about your inventory.

STEP: 4

As you already know that for every account, customer and vendor we assigned different and unique ID which is not repeated again, so same is the case here when you make your inventory account you will assign a unique id which is different for every product, whether it is related to purchase or sale. This will help you because you can easily check your inventory accounts that which inventories are left with you or which are sold.

STEP: 5

After giving a ID to your inventory, the second step is to write a name of your inventory in the next option which is of “description” here you will mention the name of your product which you are going to purchase or which you are going to sale.

At the right side you can see the first option is of “item class” this option is concerned with the class of your inventory which means that whether your item is of stock item, non stock item, related to service, assembly, labor etc. It means if you are just concerned with the sale purchase activities like you are not a manufacturing or a service company then you select “stock item” because you are just running a shop in which you just purchase the inventory then sale it.

Now you have to fill the below requirements in which the first one is of “GENERAL”, in this you can see different options related to your inventory, at left side the first option is of “description” in which you have to select that whether you are going to purchase the inventory or sale the inventory, suppose if you have to sale your product then you will select “for sales” in this option.

STEP: 6

Now you mill move forward and will see the other options, the first one is “price level 1” this option ask from you that at which price you will go to sale your inventory or at which price you will purchase the inventory or may be already purchased it, once you select the price for any specific item then it will automatically set for all other inventories which are related to this specific item so in this way you do not have to mention the price of same product again and again. But here it is important to know that you can change your price at any time when you want to change it, the process through which you can change it will also be discuss but in some other requirements. After this “price level” the next option which you have to fill is the “last unit cost” in this you will mention your one unit cost means you have to tell how much is the cost of your one unit which you are going to sale or purchase, when you mention this for at once then automatically this software will save this cost for other inventories also but only those inventories which are related to this specific inventory and comes under this specific type. Now the next option which you can see is the “cost method” in which you have to tell your method of cost that whether you want LIFO method, FIFO method or AVERAGE method for your cost. As you know that LIFO method is used for “last in first out” means that the inventory which is purchased by you at the last will be sale out first, and the second method FIFO means that the inventory which you purchased first will be first sale out, and average means that both above discussed methods will be applied at average rate. 

STEP: 7

Now you have some other options in which the first one is “item type” here you will tell the type of your inventory means whether it is portable or not, durable and some other types. The next option now you have is “location” in which you have to tell the place at which you keep this inventory whom account you are maintaining, like if you are running a shop then obviously your all inventory will occupy some space or position there so the place of every inventory is also mention with it in maintaining its account. For example you keep your one product in your shelf 1 then when you maintain its account you will mention shelf 1 in the “location”.

The next option after above is “Unit/measure” in this you have to tell the unit of your product, like if the product is of fabrics then the unit is may be of meter, inches etc.

STEP: 8

In the below window you can see that at the right side there are three accounts options which you have to mention for each of your account which you maintain for your inventory, the first one is of “GL sales account” here you will enter the sales account which you already made in your chart of accounts and for this you have to click on the magnifying glass of this option and after opening it, the below window will be open which you can see by the arrow from where you will select your sales account. In the same way you have next option which is “GL inventory account” here you will the inventory account which is already made in your chart of accounts and for this you have to click on the magnifying glass of this option and after opening it, the below window will be open which you can see by the arrow from where you will select your inventory account. You have one more option here which is “GL cost of sales account” here you will enter the account of your cost of goods sold which is already present in your chart of accounts and for this you have to click on the magnifying glass of this option and after opening it, the below window will be open which you can see by the arrow from where you will select your cost of goods sold account.

  

STEP: 9

After this at the end of this window you have two more options the first one is “preferred vendor ID” which means that if you are maintaining your inventory at the time when you purchased it then obviously you purchased it from any vendor which is already present in your vendors account or if not then you can add this new vendor and it automatically will be add in your vendors list, here you will enter only the ID of that vendor and for this you will click on magnifying glass and if this vendor already exists in your list then it will be shown in a new window. The second one is “buyer  ID” which means that if you are maintaining your inventory at the time when you sale it then obviously you sale it to any buyer which is already present in your buyers account or if not then you can add this new buyer and it automatically will be add in your buyers list, here you will enter only the ID of that buyer and for this you will click on magnifying glass and if this buyer already exists in your list then it will be shown in a new window. After doing all this above procedure now it’s time to save this inventory account and for this you will go to the top of this window and click on “save”.