 zero accounting software inventory reports get ready to be an office hero with zero support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page we also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable so once again click the link below for a free month membership to our website and all the content on it here we are in our custom zero home page we set up in a prior presentation scrolling in a bit holding down control up on the scroll wheel at 175% zoom in opening the demo with the reset button resetting the data and opening the demo at the same time we're going to duplicate some tabs as we do every time to put our major financial statement reports in right click in the tab up top to duplicate right click in the duplicated tab to double duplicate into the middle duplicated tab we're going to go into the accounting drop down open up that balance sheet report tab to the right skip to the Lou tab to the right accounting drop down this time the income statement the profit loss the P to the L back to the middle report and we're going to change the date here customize in it and drop down 22 into the month update that's the setup process we've been doing every time and so now we're going to be looking at other reports of that are other than these major two financial statement reports focusing in on the inventory remembering that basically all other reports are given more information more detail about one or multiple line items on the major financial statement reports that we have just opened balance sheet and the income statement so now we are clearly looking at the inventory which we don't have an inventory line item here which is a little disturbing for our report but that's okay inventory is turned on we will be looking at the inventory before we open them up though just realize that if I go back to our flowchart when we think about inventory there's a couple different ways that we could be dealing with inventory inventory is one of those things that often complicates the accounting process and could be kind of a specialized area especially with different types of inventory and then you have to see how are you going to account for the inventory you could account for the inventory within the zero system tracking it on a perpetual inventory system or possibly track it outside the system on a periodic system tracking it in say like an Excel worksheet making periodic adjustments so for example the first method you could use for inventory is basically when you purchase the inventory if it's like a custom job you have a very quick turnaround of the inventory of just in time kind of system maybe you just expense it when you buy the inventory and then you turn around and you create the invoice in that case you're basically still using a cashed based system but if you're holding on to any significant amount of inventory for any significant time you're going to have to track the asset of inventory if nothing else basically for taxes might require you to do that in the United States and therefore then you have the question of do I want to use a perpetual or periodic inventory system and a perpetual inventory system you might simply just purchase the inventory and report it to the inventory account but not turn on the class tracking item so that you're not trying to track the units of inventory within the zero system but instead track it on say Excel Google sheets something outside the zero system and then periodically do an adjustment decreasing the inventory in the zero system and recording the related cost of goods sold possibly at the end of the night into the week into the month for example and then of course there's the full service system which we're going to focus in on here where we do track the inventory within the zero system so that means that we have inventory that's both included on the purchasing side the vendor side as well as the pay up as well as the income side so when we purchase the inventory with a bill or check form for example the inventory account goes up but so does the units the units of inventory also go up and then when I sell the inventory with an invoice or typically a sales or money out form I got a check register kind of form then the inventory is going to go down automatically because we've designed it to do so in the zero system and that kind of system a perpetual inventory system where we track the inventory in zero then we're going to have these subsidiary reports that we can be generating that will give support to the line item of inventory on the balance sheet now I think when they when they updated these reports they kind of deleted the information on the the balance sheet here so it's not going to tie in exactly we'll look at it in more detail in our practice file to see how it works but let's just get a general idea now I'm going to go and right click the tab to the right and duplicate it let's go open up some of our inventory reports accounting drop down reports I usually just search for inventory in the find field inventory and you see we've got an inventory item list we've got the inventory item details we've got the inventory item summary the old version of the summary as well so let's go into the inventory item list and check that one out first so let's change the date to cover the same time range I'll customize the date and be going to the 31st so this is reporting basically the list of items as of a point in time and so notice they have here the untracked items versus the tracked items so the untracked items are ones that we're not going to be putting in place in a perpetual inventory system if I go back to the first tab and I go to my accounting drop down and go to my way said business drop down and go to my products and services when we set up the products and services we're going to determine in here whether they're going to be inventory or service items or whether in other words we're going to be tracking the inventory on these three we set up the perpetual inventory system telling the system we want you to track it on a perpetual inventory method so these up top not tracked and then down below you've got the items that are tracked so the tracked items on the units the unit sales price the total value on these three items so unit cost unit sales price and total value and then that the number of units on the right now usually that the value that we're looking at would be the 20 times the the 20 times the the 7 20 times 7 7 times 20 would be the 140 in other words we don't put the inventory on the asset books for what we're going to sell them at we put the inventory on the books for what we purchased it at so you would think then that we would have a total value on the balance sheet over here in inventory of of that what was it three three 20 we don't because I think when they reset the data they deleted the information in the inventory account but you could see it if I set up an if I add another item over here and let's just say that we're gonna say plus and I make an invoice and I'll just set up an item as we go just we could see the activity I say this is a customer and we're gonna say let's set up an a new item I'll just set up a new item which is just gonna be inventory one item let's say let's call it we're gonna say it has a purchase item a purchase so I'm gonna say that we purchase it for a thousand dollars and it's gonna go to costs of goods sold no tax on the purchase and then the sales price 1600 let's say and the sales account is gonna be sales and there's a tax on the sales side let's say and I track this item so we're turning on the tracking inventory and save it I'm gonna have to put some inventory on the and then it deleted this cost-to-good so I'm gonna have to put some inventory on the books now because I'm selling the inventory I'm gonna right-click the tab up top and duplicate it again and now that I've added the inventory item business drop-down products and services and let's go down to that there's the inventory item I added let's edit it so let's just go into it and then edit the item and I'm just gonna I'm sorry let's go into it and add an adjustment new adjustments to it I'm just gonna put a few units on the books like three maybe at a cost of what do I say a thousand dollars and adjustment account I'm gonna put the other account let's just say Miss Salinas or or advert let's just put it into some other general expense region I won't have one put this is the beginning balance we're putting on the books that's gonna make a journal entry increase in inventory the other side go into that expense account you wouldn't normally I'm normally do that this way I'm just trying to show you the activity and then over here I can record the sale which will decrease the inventory by let's say one by a thousand dollars so if I approve that then we can go back to our our balance sheet and I'm gonna update the balance sheet so now we've got inventory on the books so we put the inventory on the books of the increase in the inventory of the three thousand and then we made an invoice decreasing it here and so I can see that tracking now in my inventory over here update and then we've got our list of inventory down below now we've got the the amount here two units at one thousand dollars and the sales price is this but the total value is this two thousand right so the two thousand is what's pulling over now to the balance sheet we have the two thousand in the balance sheet okay let's add another I'm gonna right-click and duplicate this again we'll work more with these sub ledgers when we get to our practice problem drop down let's go to the reports let's look at another one another one let's say this is gonna be the this is gonna be inventory again inventory items detail report so this is gonna give us a similar set of information let's make this going from January 1st to December 31st update and so now we've got the detail of the of the action that's been taking place so the source the reference the con the contact description value movement increase and decreases and the quantity on hand movement so now we've got basically the activity that's been happening for them so there's that detail let's do another one right click duplicate and we're gonna go to the accounting drop down and go to our reports and now we have the inventory inventory item summary let's check that one out so this let's do the dates again we're gonna say custom and we've got to sim let's make that January 1st to December 31st update and so now once again we've got the tracked items up top because of the one these are the ones that are more complicated with the units and the untracked things that we don't have you aren't you know tracking the units down below so up top then we've got our our opening balances purchases cost a good sold or decreases the adjustments this is the adjustment that we made increasing it to put those two thousand on the books and then the closing balance over here and once again you would think that the closing balance which is the which is the cost times you know the number of units would tie out then to the balance sheet but it doesn't because again I think in the demo version they did stay basically deleted the inventory items here so but we could see that two thousand right there and again we'll work with this more in the second half of the course to tie this out but that leads into our next point noting that although we should really have the inventory tied out to our sub ledger if we're doing a perpetual inventory tracking system within the zero system but once again the system doesn't force us to do that meaning it's it's quite likely as we saw in prior presentations that the accounts receivable and the accounts payable will tie in exactly to the sub ledgers account receivable aging accounts payable aging because zeros could be more strict in terms of possibly not allowing us to enter a transaction that's going to be hitting receivables and payables unless we add the contact related to it forcing the sub ledger to basically tie out with inventory most accounting softwares including zero often aren't as as restrictive meaning if you just enter a journal entry to inventory without selecting an inventory item then it'll let you post that transaction and that transaction is going to throw off your your account here on the balance sheet from tying out to your sub ledgers so that's something when tracking inventory within the system we have to be careful of a couple things we got to be careful of one we got to set up the correct the correct items to track the inventory two we got to make sure that whenever we record something whether a purchase of inventory or sale of inventory we are recording the proper item and then three we got to make sure that we actually still do a physical account of the inventory to see if we have any spoilage see if the physical count changes or differs from what we have in our system and then possibly make then we have to make adjustments like kind of like we did when we put the beginning balance on the book so that we tie out our system to what the physical count is what is in the real world i kind of think so in a perfect world the perpetual inventory system would always tie out to what's in the real world because we're increasing and decreasing with every purchase and sale but things happen theft happens spoilage happens errors happen and therefore we got to tie out we got to look at the real world from time to time and adjust our inventory to to match it