items that have inflation

Actually all you can do is hope, I certainly have no idea what in the world you are talking about.

>

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.

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.

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?

????

Not a clue

Name a field of work where costs are stable. Your field of work is no different.

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.

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 > >I am finding Qb to be very unhelpful. When I have to change the cost it

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.

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.

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).

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'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.

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.

commission

inflated cost,

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.

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.

That's a very bald statement which completely ignores decades of debate within the accounting profession over historic cost and replacement cost!

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!

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.

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.

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, you pay PREVIOUS commissions based on CURRENT prices.

If your sales people only knew.... Forget the sales people.. how about if *YOU* had a clue.

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

I've had better thanks for my effort than what I recieved from you in this thread.

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.

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.

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.

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.

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

I make it a policy of never trying to derive any personal benefit from my posts to this usenet. I do so out of the goodness of my heart. I'm quite certain most mid-range applications all have this feature, like MAS 90, Accpac Advantage Series, etc.

I find your discretion admirable. As I stated, I didn't need the COGS adjustment feature -- that's not the reason I'm looking. I just need bigger, better, invoicining and customer/job management software.

Thanks anyway