Using Expense Items and Using the Department/Expense Report in CDBWin 7.4
Tip
Defining Expense Accounts and Applying Them to Items
Beginning with CDBWin Version 7.4.0, you can define items as expenses (also known as Type X items),
which provides improved efficiency when you buy expense items (as they will now be recognized as such
the next time you buy them) and accuracy in determining profitability for expense accounts which are
associated with a department.
First create your expense accounts. On the Setup menu, click Department/Account and
then the "Expenses" tab. If desired, you can associate a department with an expense account on the
"Expenses" tab so the Department/Expense report will report the associated activity between those
department and expense accounts. To print or view the Department/Expense report, on the Report
menu, click Daily Book > Department > Department/Expense.
Once you have set up expenses, you can use assign an item to an expense account from Inventory
Maintenance. On the Setup menu, click Inventory > Items (PLU/UPC/SKU). Add a new item
or edit an existing item which has a Quantity on Hand value of 0 (if there is a quantity on hand, then
the item has been recorded into inventory and therefore must be an Inventory item). When the Inventory
Maintenance window appears, in the Type box, select Expense. In the Account box,
select an expense account.
This way of handling expenses is excellent for comparing profit against expenses to see how related
components affect profitability. For example, you buy coffee beans, lids, cups, napkins, and stirrers,
but sell a PLU for coffee which may contain all or some of these items. Customers may use varying
amounts of these components for each coffee PLU you sell. Therefore, if you track the sale of the
PLU at 100% profit margin, there is no cost of goods calculated, yet when you pay for beans, lids,
cups, napkins and other coffee-related items, record a coffee expense. This way, your Income and
Expense Statement will have an accurate Profit/Loss value. The Profit/Loss reported can then
reflect your value to the penny since your COGS is not a "fudged" approximated value as it would
be if you were picking a cost to a selling item which therefore could not reflect how much each
customer used of your coffee supplies. When departments are associated with an expense account,
the Department/Expense report can report how profitable your nonstock sales (such as coffee) is.
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