items that have inflation


J

jasonandrobyn

I am finding Qb to be very unhelpful. When I have to change the cost it
the item for the constant inflation to our economy it doesn't work well
with QB. I pay commisions and also want to track for salaried sales rep
if they are truly making money for the company. But, in my income by
customer detail report it doesn't always work that way....if I built an
item at $10.oo but then later had an increase and now change it to
10.50 it still comes up with the old $ or just no cost at all...it is a
hassle.

I have been thinking of ways to correct this, am I doing something
wrong, is this a flaw with QB, did I build the items wrong in the first
place...etc..

The only thing I can think of is that I would have to build the item
again and then merge it...but would that work..and it is alot of work
so I don't want to mess things up. In my field of work items are hardly
ever the same price from month to month.

I hope I stated the problem clearly and thanks ahead of time for any
help....it just takes me so long to calculate my commisions because I
have to manually overtype and add lines to the report in excel.
 
A

Allan Martin

jasonandrobyn said:
I am finding Qb to be very unhelpful. When I have to change the cost it
the item for the constant inflation to our economy it doesn't work well
with QB. I pay commisions and also want to track for salaried sales rep
if they are truly making money for the company. But, in my income by
customer detail report it doesn't always work that way....if I built an
item at $10.oo but then later had an increase and now change it to
10.50 it still comes up with the old $ or just no cost at all...it is a
hassle.

I have been thinking of ways to correct this, am I doing something
wrong, is this a flaw with QB, did I build the items wrong in the first
place...etc..

The only thing I can think of is that I would have to build the item
again and then merge it...but would that work..and it is alot of work
so I don't want to mess things up. In my field of work items are hardly
ever the same price from month to month.

I hope I stated the problem clearly and thanks ahead of time for any
help....it just takes me so long to calculate my commisions because I
have to manually overtype and add lines to the report in excel.
Actually all you can do is hope, I certainly have no idea what in the world
you are talking about.
 
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L

Laura

QB won't do what you want to do nor should you adjust the cost anyway. When
you record an asset into your accounting software you record it using the
COST paid for that item. At no point in time do you ever change that value.
If you sell the item at a higher price then you record that as part of your
income. Never do you adjust your recorded cost for inflation or deflation
for that matter. Cost is cost and will stay recorded at that price forever.

I think you need to do some research as to the proper accounting of
inventory items before you expect QB to do something that are contrary to
accounting principles.
 
L

L

jasonandrobyn said:
I am finding Qb to be very unhelpful. When I have to change the cost it
the item for the constant inflation to our economy it doesn't work well
with QB. I pay commisions and also want to track for salaried sales rep
if they are truly making money for the company. But, in my income by
customer detail report it doesn't always work that way....if I built an
item at $10.oo but then later had an increase and now change it to
10.50 it still comes up with the old $ or just no cost at all...it is a
hassle.
There is no such thing as 'items that have inflation'.
The cost 'is what it is'. "if I built an item at $10.oo but then later had
an increase" is nonsensical statement.

If you built an item, and the item cost $10 at the time of the build -- then
$10 is the cost of the item. If you later change the item to reflect an
increase in the price to build, suceeding items will reflect the new cost.
Think about it, using an expense 'outside' of an item build. As an example,
fuel is going up. If I paid $1,200 in May 2004 and now pay $2,000 in May
2005 --- the cost of the fuel is increasing... but it doesn't change what I
already paid.
I have been thinking of ways to correct this, am I doing something
wrong, is this a flaw with QB, did I build the items wrong in the first
place...etc..
The flaw is not in QB. You *may* be entering costs incorrectly, but there is
no way to tell from your post. As to whether you built the items wrong, what
does your software item entry have to do with your product?

Or, when you say 'built' are you referring only to QB and the ability to
'group' items for assemblies?
The only thing I can think of is that I would have to build the item
again and then merge it... ????
but would that work.. Not a clue
and it is alot of work
so I don't want to mess things up. In my field of work items are hardly
ever the same price from month to month.
Name a field of work where costs are stable. Your field of work is no
different.
I hope I stated the problem clearly and thanks ahead of time for any
help....it just takes me so long to calculate my commisions because I
have to manually overtype and add lines to the report in excel.
It sounds as if you are trying to pass on to your sales reps the INFLATED
costs of doing business..... using current costs to project what you think
income should have been as opposed to what income really was.
 
J

jasonandrobyn

Ok maybe I explained it incorrectly. Let's use toilet paper as an
example.

2 months ago I build my item toilet paper and the bost was 15.00 a case
and the selling price was 24.99.

now with the cost of everything especially transport has gone up now my
vendor sells me the toilet paper for 18.00 and now I have to raise my
sell price to 28.99.

Well it appears that Qb is using the average cost of toilet paper
instead of the new price when I do a commsion report. I need to be able
to pay commisions based on the new cost of toilet paper...not the
average.

Thank you for your help.


Here's an example of one report for an invoice.
 
L

Laura

Continuing with the TP example...

When you pay the commissions aren't some of the products sold purchased
at$15 and others at $18. So using the average price would be a better
representation of the items sold.

QB only uses the Average cost method. If you need to use a different method
then you will need to find a different product. Peachtree offers LIFO and
FIFO in addition to Average cost.

Additionally I don't think that QB intended the average cost calculations to
be used to calculate sales commisions. It is designed to figure out the Cost
of Goods Sold for tax purposes. You may need to use some sort of sales
report to calculate the commission instead.
 
A

Allan Martin

jasonandrobyn said:
Ok maybe I explained it incorrectly. Let's use toilet paper as an
example.

2 months ago I build my item toilet paper and the bost was 15.00 a case
and the selling price was 24.99.

now with the cost of everything especially transport has gone up now my
vendor sells me the toilet paper for 18.00 and now I have to raise my
sell price to 28.99.

Well it appears that Qb is using the average cost of toilet paper
instead of the new price when I do a commsion report. I need to be able
to pay commisions based on the new cost of toilet paper...not the
average.

Ok dude. now I understand what the hell you are taking about. Now you are
talking real shit.

Don't have a solution except to say if you want it to be automatic it will
have to come from a third party vendor and will probably involve manually
entering and updating the item cost in the items cost field on a continious
basis.
 
A

Allan Martin

Laura said:
Continuing with the TP example...

When you pay the commissions aren't some of the products sold purchased
at$15 and others at $18. So using the average price would be a better
representation of the items sold.

QB only uses the Average cost method. If you need to use a different
method then you will need to find a different product. Peachtree offers
LIFO and FIFO in addition to Average cost.
The method of valuing the inventory does not appear to be the issue in this
instance. The OP appears to want the margin for commission purposes to
always be based on the current cost and not on any particular LIFO OR FIFO
layer being absorbed.

In any event I'm glad I'm not a salesperson in his organization. I would
cost me a fortune in grease. (BOGU).
 
L

L

jasonandrobyn said:
Ok maybe I explained it incorrectly. Let's use toilet paper as an
example.

2 months ago I build my item toilet paper and the bost was 15.00 a case
and the selling price was 24.99.

now with the cost of everything especially transport has gone up now my
vendor sells me the toilet paper for 18.00 and now I have to raise my
sell price to 28.99.

Well it appears that Qb is using the average cost of toilet paper
instead of the new price when I do a commsion report.
Yes. And that is because you still have some toilet paper that you purchased
for the lower price in your inventory. And, the cost -- for Cost of Goods
Sold -- *IS* the average price that QB calculated.
If you buy 10 cases of TP at $15, sell 8, and buy 10 more cases of TP at $18
your total cost for TP was $330. The 8 cases you sold cost you $120, and the
12 cases you have left cost you $210 == $17.50 each.
Of course, there are other methods for calculation Cost of Goods, as Laura
pointed out -- but the software package YOU CHOSE to use does not offer the
other possibilities.

I need to be able
to pay commisions based on the new cost of toilet paper...not the
average.
I'm not at all sure what your cost of goods sold has to do with commission
to your sales reps.
If the reps get a percentage of the sales prices the COGS has nothing to do
with that. If the sales reps are requesting commisions based on base price
to you, then by asking you to inflate the base price of stock in hand to
match higher pricing they are taking advantage of you. If, instead, you are
trying to calculate commisions based on profit, then using an inflated cost,
is, as I stated in my original post, an incorrect calculation which leads to
ripping off your sales reps.
 
J

jasonandrobyn

You know sometimes I read posts to try and become more educated with
QB..and from time to time I see butheads writing some crude
comments..as in my post 2 people were rude...keep your comments to
yourself...didn't ur momma ever teach u if u have nothing good to say
keep it to yourself..I find it extremely rude that people use this post
as a reason to show their personalities...

On the otherhand I find that this site is for the most part great and
helpful and a nice change to ahve people that care enough to give free
advice and be kind..so thank you to those people.

On my issue to the one who said I am ripping off my sales reps..you
don't have a clue what you are talking about so don't prejudge without
the full info...I carry enough inventory to get me through as my
warehouse is not huge so trust me when it is time to pay commisions
again I am now paying the higher price for my merchandise...In which
case my sales reps have nothing to complain about because nobody in muy
field ( in this area) pays 50% commisions which is great...but if I am
paying for the item they sold at a higher price than last time they are
only entitled to the 50% net profit..not average of what the item has
cost me in the past not pertaining to the current sale at hand. A huge
majority of my merchandise never even sees the warehouse as my drivers
pick it up and then deliver straight to the customer.

Again thank you for the help!!! I will try something else and play with
it to see if I can get a work around this.
 
A

Allan Martin

jasonandrobyn said:
You know sometimes I read posts to try and become more educated with
QB..and from time to time I see butheads writing some crude
comments..as in my post 2 people were rude...keep your comments to
yourself...didn't ur momma ever teach u if u have nothing good to say
keep it to yourself..I find it extremely rude that people use this post
as a reason to show their personalities...
On the otherhand I find that this site is for the most part great and
helpful and a nice change to ahve people that care enough to give free
advice and be kind..so thank you to those people.

On my issue to the one who said I am ripping off my sales reps..you
don't have a clue what you are talking about so don't prejudge without
the full info...I carry enough inventory to get me through as my
warehouse is not huge so trust me when it is time to pay commisions
again I am now paying the higher price for my merchandise...In which
case my sales reps have nothing to complain about because nobody in muy
field ( in this area) pays 50% commisions which is great...but if I am
paying for the item they sold at a higher price than last time they are
only entitled to the 50% net profit..not average of what the item has
cost me in the past not pertaining to the current sale at hand. A huge
majority of my merchandise never even sees the warehouse as my drivers
pick it up and then deliver straight to the customer.
The problem is you just don't get it. People are not accusing you of ripping
off your salesforce just be be assholes. They are saying it because based on
your previous posts (even this one) you are indeed screwing them.

Mama says "stupid is a stupid does".
 
H

HeyBub

jasonandrobyn said:
On my issue to the one who said I am ripping off my sales reps..you
don't have a clue what you are talking about so don't prejudge without
the full info...I carry enough inventory to get me through as my
warehouse is not huge so trust me when it is time to pay commisions
again I am now paying the higher price for my merchandise...In which
case my sales reps have nothing to complain about because nobody in
muy field ( in this area) pays 50% commisions which is great...but if
I am paying for the item they sold at a higher price than last time
they are only entitled to the 50% net profit..not average of what the
item has cost me in the past not pertaining to the current sale at
hand. A huge majority of my merchandise never even sees the warehouse
as my drivers pick it up and then deliver straight to the customer.

Again thank you for the help!!! I will try something else and play
with it to see if I can get a work around this.
You know, don't you, that you are the only person on the planet who pays a
commission based on "net profit." (Except for the entertainment industry.)
Does your "net profit" account for taxes, returns and allowances, freight in
and out, payroll, rent, and all the other things that comprise "net profit?"

Truth be told, I wouldn't be a salesman for you - there's just too much
opportunity for you to screw me out of my pay check.

You can make this whole issue go away by paying a commission based on retail
sales. By so doing, you would match the time-tested process used by everyone
from shoe salesmen to people who sell 747s.
 
A

Allan Martin

HeyBub said:
You know, don't you, that you are the only person on the planet who pays a
commission based on "net profit." (Except for the entertainment industry.)
Look the OP may not be the brightest star in the sky but I have to ask what
planet you are from? Paying commissions on margin (you call it net profit)
is not at all uncommon.

The problem is the method the OP is using to calculate the margin that
screws his sale force big time.
 
P

Paul Danaher

Laura said:
QB won't do what you want to do nor should you adjust the cost
anyway. When you record an asset into your accounting software you
record it using the COST paid for that item. At no point in time do
you ever change that value. If you sell the item at a higher price
then you record that as part of your income. Never do you adjust your
recorded cost for inflation or deflation for that matter. Cost is
cost and will stay recorded at that price forever.
I think you need to do some research as to the proper accounting of
inventory items before you expect QB to do something that are
contrary to accounting principles.
That's a very bald statement which completely ignores decades of debate
within the accounting profession over historic cost and replacement cost!
 
L

L

jasonandrobyn said:
You know sometimes I read posts to try and become more educated with
QB..and from time to time I see butheads writing some crude
comments..as in my post 2 people were rude
Looked at the thread.. didn't see rude. Allan can be acerbic at times, but
he's helpful when he advises. Laura's comment re accounting principles was
voiced strongly, but was IMO right on the money. Could you perhaps be
referring to 'moi'? If so, read again.

As to crude - 'undisguised or unadorned; plain:', 'blunt', 'being in an
unrefined or natural state' - ummm, yeah. Kinda what you need in newsgroup
advice. Elegant is for user manuals and QB onscreen help. And you've shown
how well you do with those!
...keep your comments to
yourself...didn't ur momma ever teach u if u have nothing good to say
keep it to yourself..I find it extremely rude that people use this post
as a reason to show their personalities...
I decoded your rambling post in order to zone in on what I *THOUGHT* you
were asking --- how to change/modify QB's method of tracking COGS.

The answer was not what you wanted -- QB offers only ONE method of
calculating COGS. And, in case I was incorrect as to what you were asking, I
pointed out the accounting obvious - it was wrong because it might cheat the
reps. To be fair, I also offered the possibility that it could also cheat
you. I gave an example, using your numbers, just in case you did not realize
how changing the value impacted your sales reps commisions.

I was just trying to be sure I understood what it was you were getting at.
Evidentally, I was right on the money.

There are other software packages that will use other methods for
calculating COGS, such as LIFO and FIFO. There are none, that I know of,
that will inflate the COGS to represent your current purchase price. To
perform that kind of manipulation requires effort on your part.
On the otherhand I find that this site is for the most part great and
helpful and a nice change to ahve people that care enough to give free
advice and be kind..so thank you to those people.
Hmm, you've attacked two out of the three folks who actually gave you QB
related information in this thread. 'Course, you didn't identify which two
of us you thought had "nothing good to say". For myself, just killfile me if
you like because I have no intention of following your suggestion to "
....keep your comments to yourself ". There are too many folks who ask
(nicely) for advice and deserve more than an empty newsgroup.
On my issue to the one who said I am ripping off my sales reps..you
don't have a clue what you are talking about
Really? You ASKED how you could force QB to inflate the cost of goods in
order to "be able to pay commisions based on the new cost".
so don't prejudge without
the full info...I carry enough inventory to get me through as my
warehouse is not huge so trust me when it is time to pay commisions
again I am now paying the higher price for my merchandise
So, you pay PREVIOUS commissions based on CURRENT prices.
...In which
case my sales reps have nothing to complain about because nobody in muy
field ( in this area) pays 50% commisions which is great...but if I am
paying for the item they sold at a higher price than last time they are
only entitled to the 50% net profit..not average of what the item has
cost me in the past not pertaining to the current sale at hand.
If your sales people only knew....
Forget the sales people.. how about if *YOU* had a clue.
A huge
majority of my merchandise never even sees the warehouse as my drivers
pick it up and then deliver straight to the customer.
IF that is the case, if truly the stuff sells about as fast as you buy it,
then the COGS SHOULD reflect that. If it does not, perhaps you are not
recording your sales properly in QB.
Going back to my example: If you buy 10 cases of TP at $15, AND SELL ALL TEN
and buy 10 more cases of TP at $18 your total cost for TP *IS STILL* $330.
The 10 cases you sold cost you $150, and the 10 cases you have left cost you
$180 == $18.00 each. Just what you asked for.
In other words:
IF YOU ARE ENTERING YOUR SALES IN AN ACCURATE AND TIMELY BASIS, AND IF THE
METHOD YOU USE KEEPS AN ACCURATE COUNT OF YOUR INVENTORY THEN THE COGS USED
BY QUICKBOOKS WILL ACCURATELY REFLECT THE COST OF THE ITEMS ON HAND
Again thank you for the help!!!
I've had better thanks for my effort than what I recieved from you in this
thread.
I will try something else and play with
it to see if I can get a work around this.
Go to it. Might I suggest you don't apply your 'work around' to your tax
forms. Your sales reps might have nothing to complain around but I suspect
your government will.
 
A

Allan Martin

There are other software packages that will use other methods for
calculating COGS, such as LIFO and FIFO. There are none, that I know of,
that will inflate the COGS to represent your current purchase price. To
perform that kind of manipulation requires effort on your part.
L, just for your information:


As we move up the software food chain you will find that many of these
programs permit the calculation of the COGS to be based on a "user specified
amount, or most recent cost, or standard cost".

It should be understood that these programs while allowing theses methods
will always automatically calcualte the difference between the resulting
cost of goods sold and the moving average cost and post this variance to a
specific account chosen by the end user. I know this for a fact because the
software I sell and support can do this and find it hard to believe others
in this price level category do not also.
 
J

jasonandrobyn

Allan and L you need to get a life if you are gonna get so offended and
balsey with your "advice" don't give it if you are gonna just crap on
people..people come here for advice.... If I knew the correct answer to
my question or knew how to word it better....would I have had to ask
it???? And that's why I attempted asking it here.You guys keep saying I
am trying to screw my sales reps and that angers me because I wouldn't
be here trying to get help if I was trying to screw them, my goal is to
ensure they nor the cmpany I work for get screwed. My sales reps get
paid quite nicely and I don't want to screw them at all..i actually
care. But except for what we keep in inventory which are items we
generally pay the same for all the time anyways....other items we buy
from local vendors and if I bought something that I don't stock at all
in my warehouse and then I have my driver pick it up and then deliver
to my customer..and if it cost me a few bucks more to buy it than last
time I had to but this item..how do you come to that I am trying to
screw my sales rep because I pay them based on the current $ it cost me
to pay for that item vs what we sell it for? Maybe I don't know what I
am talking about...but that's why I came here and I can admit it...I
just don't appreciate getting trashed on because of lack of QB or
accounting knowledge..it is not my company I have been running the
commision reports and realized a problem with it. The previous person
was calculating it all manually which I think is ridiculous and time
consuming. So I figured there must be a better way. I have never used
QB b4 coming to this company. So again I apologize for not being a QB
expert. Sorry to bother anyone that feels like they have to trash me
for trying to correct a problem. Again I meant no harm by trying to ask
a help question.
 
H

HeyBub

Allan said:
Look the OP may not be the brightest star in the sky but I have to
ask what planet you are from? Paying commissions on margin (you call
it net profit) is not at all uncommon.
Paying a commission on "margin" is, if not illegal, certainly immoral. Be
that as it may, *I* didn't call it "net profit," the OP did.

"...I am paying for the item they sold at a higher price than last time they
are
only entitled to the 50% net profit....."

"Net profit(loss)" is defined as revenue less cost of goods sold and all
other expenses. If he is allocating rent, insurance, property taxes, and the
like (some do) to each of his sales departments and products, then paying
50% of the remainder to his sales force, his sales force is starving.
The problem is the method the OP is using to calculate the margin that
screws his sale force big time.
I brought up the potential for screwing his sales force, you assert he *IS*
screwing his sales force. We're really on the same page.
 
L

L

Allan Martin said:
L, just for your information:


As we move up the software food chain you will find that many of these
programs permit the calculation of the COGS to be based on a "user
specified amount, or most recent cost, or standard cost".

It should be understood that these programs while allowing theses methods
will always automatically calcualte the difference between the resulting
cost of goods sold and the moving average cost and post this variance to a
specific account chosen by the end user. I know this for a fact because
the software I sell and support can do this and find it hard to believe
others in this price level category do not also.
Thanks for the info. You mentioned going up the software food chain -- while
I don't need COGS adjustments, I *AM* thinking I may have outgrown QB. Any
suggestions? If you wonder why I ask you, it is because you ARE the resident
QB fanboy (as you've named yourself) and I want a real upgrade as opposed to
an alternative offered by a disgruntled QB user. If you could contact me
offlist (remove what I hate from my email domain) I would be appreciative.
Perhaps just a link to your site from where you sell and support these
higher end products?
Thanks
 
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A

Allan Martin

jasonandrobyn said:
Allan and L you need to get a life if you are gonna get so offended and
balsey with your "advice" don't give it if you are gonna just crap on
people..people come here for advice.... If I knew the correct answer to
my question or knew how to word it better....would I have had to ask
it???? And that's why I attempted asking it here.You guys keep saying I
am trying to screw my sales reps and that angers me because I wouldn't
be here trying to get help if I was trying to screw them, my goal is to
ensure they nor the cmpany I work for get screwed. My sales reps get
paid quite nicely and I don't want to screw them at all..i actually
care. But except for what we keep in inventory which are items we
generally pay the same for all the time anyways....other items we buy
from local vendors and if I bought something that I don't stock at all
in my warehouse and then I have my driver pick it up and then deliver
to my customer..and if it cost me a few bucks more to buy it than last
time I had to but this item..how do you come to that I am trying to
screw my sales rep because I pay them based on the current $ it cost me
to pay for that item vs what we sell it for? Maybe I don't know what I
am talking about...but that's why I came here and I can admit it...I
just don't appreciate getting trashed on because of lack of QB or
accounting knowledge..it is not my company I have been running the
commision reports and realized a problem with it. The previous person
was calculating it all manually which I think is ridiculous and time
consuming. So I figured there must be a better way. I have never used
QB b4 coming to this company. So again I apologize for not being a QB
expert. Sorry to bother anyone that feels like they have to trash me
for trying to correct a problem. Again I meant no harm by trying to ask
a help question.
Please, your pissing on me and L and telling us its raining. You are well
aware of what you are doing, tugging on our heart strings, I don't buy it.
 

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