NESFA® Treasury Procedures: Setting Up a New Inventory Item
Creating a new inventory item is a multi-step process. Before the inventory
item can be set up, you need to have created a number of other
- An inventory account, IV-xxxxx, an asset account which holds the current
value of the inventory for that item.
- A cost of goods sold account, CG-xxxxx, an expense account which
accumulates the inventory value of all copies sold
- A sales income account, SI-xxxxx, which accumulates the income from sales
of this item
- A sales expense account, SE-xxxxx, which accumulates any cost of sales
other than cost-of-goods-sold
- Possibly a royalty account, RY-name, if royalties are to be paid. This
will normally be a single royalty account for all items by a given author.
xxxxx should be the same in each case and should be constructed
systematically. (We did not always do this, but let's take care not to make it
- To create the inventory item, use Tasks/Inventory and select New.
- Give the item a name. The standard is author's last name followed by a
- Select Stock item as the type of item
- Fill in the comment field with Author/Title, ISBN 978-x-xxxxx-xxx-x, etc.
- Fill in the SI, CG and IV accounts
- Use FIFO as the method of determining cost.
- Enter the ISBN-13 on the Custom Fields tab; it is no longer necessary to
enter the ISBN-10.