I have had a look over the forum and can't quite find the answer to what I am looking for... a couple of my sole trader clients are tattoo artists, obviously buy all their materials throughout the year (such as pigments, gloves etc) and those purchase all get put down as consumable materials. However, at the year end I need to be able to get them to tell me how much of this stuff they still have in stock so that I can allocate it as 'closing stock' and get the P&L report to deduct that amount from the purchases and also add it to the Balance Sheet as a current asset. Come the new financial year, I then need to be able to transfer that balance over as an 'Opening Balance'. However, I cannot figure out where to put my closing stock account in my nominal ledger so that it will appear in the correct places on the P&L report and Balance sheet. Can anyone help please?
Hi Jennifer
I think the simplest approach is to use this technique:
http://www.solaraccounts.co.uk/help/how-to-track-changes-in-stock-level.php
In your case you could create new expense account called 'Cost of Materials Used' and use this account instead of 'Cost of Goods Sold'.
A more traditional approach is to create two expense accounts: Opening Stock and Closing Stock. At the beginning of your financial period create a General Transaction which transfers the opening balance from the stock asset account to the Opening Stock expense account. Then at the end of the period create a transfer from the Closing Stock expense account to the asset account. This page gives a more detailed example:
http://www.solaraccounts.co.uk/forum/topic.php?TopicId=390&Posts=0
Regards,
