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Changing Inventory Methods

There are several Inventory Methods available and you may select which one suits you best depending on whether you plan to track inventory items stock levels.

You may have started using the inventory system in a particular way only to later receive advice or learn that another way is better for your business. Simply changing the setting in the Inventory Items won’t create this change. This is because there are historical transactions that are affected. If the Saasu web finance engine just allowed the change it could create differences to what you have already reported to advisers, tax authorities et al.

The following table highlights two common situations and shows you ways you might consider dealing with them.

Important Note

Before making any changes to accounting methodology be sure to check with your advisor and consider the impact on management reports, tax remittances and the like as a result of changing historical transactions. As a general rule, changing historical information in accounts may lead to differences between what you report to advisors and tax authorities versus what is in your accounting system.

Current Method New Method Approach Options
I Inventory
I Buy
I Sell		 I Buy
I sell		 You have been tracking stock using the perpetual inventory system using an ‘Asset:Stock’ category or similar. That is, your inventory items are set-up with ‘I Inventory’ ticked.When the Inventory Item has been used in transactions:

  1. Duplicate your Inventory Items and save them with new Item Codes. Re-assign Purchase and Sale Transactions Items to these new Inventory Item codes. Note you need to work from the most current transaction backwards to the oldest transactions as the inventory system won’t let your inventory levels go negative.
  2. Start a new Inventory Item and Item Journal all the inventory held under the ‘I Inventory’ method over to the new code(s).
  3. Delete all and then re-enter all transactions attached to the Inventory Items. This approach isn’t recommended when you have lots of historical data.
  4. Set old Inventory Items that will no-longer be used to inactive.

When the Inventory Item has NOT been used in any transactions;

  1. Find the Inventory Item from the List Of Inventory Items by selecting Setup > Inventory Items from the Main Menu.
  2. Click on the edit icon and enter the Edit Inventory Item screen.
  3. Un-tick the check box ‘I Inventory’
  4. Click on Save.
I Buy
I Sell		 I Inventory
I Buy
I sell		 You have been buying and selling Inventory Items but not tracking the amount on hand in an Asset:Stock category (or similar). You decide to keep track of inventory items.When the Inventory Item has been used in transactions:

  1. Duplicate the old inventory item.
  2. Create a new Item code. A suggestion would be something similar to the old code for this item.
  3. Tick the ‘I Inventory’ check box and select an Asset Account.
  4. Click on Save.
  5. Set old Inventory Items that will no-longer be used to inactive.

When the Inventory Item has NOT been used in any transactions;

  1. Find the Inventory Item from the List Of Inventory Items by selecting Setup > Inventory Items from the Main Menu.
  2. Click on the edit icon and enter the Edit Inventory Item screen.
  3. Tick the check box ‘I Inventory’ and select an Asset Account.
  4. Click on Save.

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