Cost pricing clarification
HI Myob community
Just to clarify when you purchase an item to out into your inventory to sell later is it the price you put in as the purchase price or is it the actual price that you paid. I purchase items internationally as as t he currency changes so does the purchase price.
For example I'm just trying to get my head around how MYOB calculates "profit". So if I purchase an item for $20 and sell it for $50 then the profit is $30. Then the following time the item costs $25 so the "profit drops to $25. Does MYOB then calculate the average of these two purchases and sales?
Then in part two of the question to make things even more complicated I have this scenario.
We have a USA component to our business and we are often sharing equipment purchases. So Au business will buy product A and USA business will buy product B. We then transfer stock between the two businesses.
At present to keep the inventory in each business correct I will simply put in X number of product A in sales from Au business and have the invoice total of $0 and similarly have a purchase invoice from USA business will a total of $0.
By doing this will MYOB then see the purchase price as $0 and then calculate t he actual profit of the sale as described earlier as now $50 profit as there was no cost?
I guess then the inventory costs or sales will be affected as I have sold items at $0 in the system. Would this then show up in the system as -$25 profit?
It gets even more complicated as most times the items I am transferring between the two business as priced differently as one business is operating in USD and the other in AUD so exchange rates also come into play.
Sorry it's a bit long. Over to you community
Hi Mark299
The "fair transfer price agreement" is not something that I would be able to comment on.
However, there was a question relating to closing off an invoice and purchase without the impact on the bank account. Generally in these situations, you want to use a contra/holding account and use the below process:
- Create a holding account if you don't already have one - Accounts>>Accounts Lists>>New - give the account a number, name and set the account type to be Bank.
- When ready to make payment, go to Sales>>Receive Payments>>Select the Deposit to Account to be that newly created account and then process the payment as per normal.
- Once that has been created, go to Purchases>>Pay Bills>>Select the Pay from Account to be that newly created account and then process the payment as per normal.
What the above process will do is put the payment from the invoice into the holding account and uses those funds to pay off the purchases. As no "real" bank accounts are involved there is no impact on your bank accounts.