How to Implement an Expensing Method

When implementing the method to Expense product to P/L when items are removed from stock there are different ways of doing so depending on whether the settings were made right at the start, or whether you have changed your expensing system after having used the Expense product upon purchase method. You can read more about cost accounting here.

Expensing in a new database

When you want to implement Expense product to P/L when items are removed from stock in a newly created database, it is important that you make the correct settings before you count the stock in your warehouse or make any purchases.

Click here to use the overview in the section on Settings to create the settings you want to use.

Important! If manual entries were made against the Balance sheet account for stock value, possibly as Opening balance or Manual posting of stock value, this may lead to the Balance sheet account for stock value being twice as much as the actual stock value.

If this has happened, you will need to make a manual entry for the value of the difference to correct the stock movement journal that was created at the time of the stock count. This is because the Balance sheet account for stock value already contains the values, which are automatically posted during a stock count.

Changing your expensing method

When changing from the Expense product upon purchase to the Expense product to P/L when items are removed from stock method, the change will only be implemented for products that are entered into stock after the relevant settings were made. That is to say that all goods, which have items in stock from before, will not be expensed at the time of invoicing before the old items in the warehouse have been removed/sold and new goods have been received.

In brief, if you would like the change to apply to stock that was already on the system, you will need to go through the steps below.

How to change the expensing method for existing stock

Take a backup.
Print out the Stocktaking report.
Then print out the Stock value list (stock movements).
Reset the warehouse. For details see the section on Emptying the warehousebelow.
Make your settings for the Expense product to P/L when items are removed from stock method. For more details click here.
Re-enter your stock figures by running a stock count. For more details click here.

The expensing method for existing stock has now been changed.

Backup

Before you start the process of changing your expensing method, it is important that you make a backup of your data in Mamut. To start up the Backup wizard, go to File – Backup – Create Backup.

When you have completed the wizard, you are ready to start making changes.

Emptying the warehouse

When changing the point of expensing for product costs from the time of invoicing to the time of an item being removed from stock, all stocked items have to be removed from the warehouse. Before you empty the warehouse you need to get an overview over all your stocked goods and their value. You can get an overview over your products in stock by going to View – Product – Reports and printing the Stocktaking report and Stock value list (stock movements).

Note! If you are using serial numbers, consignment numbers or best before dates, you need to print out separate stocktaking reports for these goods.

You then need to empty all your warehouses. This is done by going to View – Warehouse – Stocktaking, selecting a warehouse and then clicking on Reset warehouse. If you have more than one warehouse, repeat the procedure for all remaining warehouses.

If you are going to apply the Individual rule for updating stock value, only products which will be expensed when they are removed from stock will need to have their stock count reset.