Inventory accounting

[tsb]

I'm wondering if anyone is using ledger for inventory accounting,
particularly for a merchandizing or manufacturing business. Is anyone
using ledger's commodity-related features to track inventory?

[Zack Williams]

I tried doing this a while back for inventory of equipment for resale,
but the problem I ran into is that it was hard to keep track of
identical items purchased for different amounts at different times,
and use that as a basis for sale price.
- Zack

[John Wiegley]

On Aug 8, 2010, at 1:09 PM, Zack Williams wrote:

> I tried doing this a while back for inventory of equipment for resale,
> but the problem I ran into is that it was hard to keep track of
> identical items purchased for different amounts at different times,
> and use that as a basis for sale price.

Something that I'm going to implement this month is the ability to use
commodity "notes" as a price indicator. For example:

2010-08-08 Sample
Assets:Inventory 1 HOME (120 Broadway) @ $10,000
Equity

2010-08-10 Sample
Assets:Inventory 1 HOME (245 Eastwick) @ $30,000
Equity

2010-08-20 Sample
Assets:Cash 1 HOME (120 Broadway) @ $15,000
Income:Profit $-5,000
Assets:Inventory

John

[tsb]

Varying purchase prices for a single inventory item is where things
get tricky. I would need a way to record each purchase price and
ledger's reporting facilities would also need to be aware of what
method of inventory valuation I am using (LIFO, FIFO, weighted
average, etc.).

A manufacturing operation would add further complexity in inventory
tracking. Both finished products and raw materials need to be tracked
and there would need to be some way of showing the relationships
between the two. For example, 1 loaf of bread is equal to 0.5 lbs of
flour + 1 tablespoon of yeast etc.

[John Wiegley]

On Aug 8, 2010, at 6:35 PM, tsb wrote:

> Varying purchase prices for a single inventory item is where things
> get tricky. I would need a way to record each purchase price and
> ledger's reporting facilities would also need to be aware of what
> method of inventory valuation I am using (LIFO, FIFO, weighted
> average, etc.).

Ledger does not automate "lot" selection in any way, such as LIFO or FIFO.
These must be manually modelled by the user, if desired.

John

[Simon Michael]

I found a book yesterday that has a whole chapter on tracking inventory and work-in-progress. I recommend the whole
thing, I think it's at about the right level of detail for many of us. Gets right down to nuts and bolts. It's
"Accounting Savvy for Business Owners" by Philip Goodman, http://www.cpa911publishing.com/Accntsavvy.htm .

[Simon Michael]

I think hledger's simple-minded fixed prices would work to your advantage here.