3.10.1 Invoicing and Orders Preferences

Related Articles 1.1 Introduction to the Setup Guide with Tradepoint

Preferences for managing Inventory and Order Fulfillment are addressed with these Preferences. Inventory management preferences will apply to internal activity as well as web based activity from one or more websites.

The Inventory Management section is explained in detail in this article as highlighted with the image below.

Inventory Management: If your inventory requires serial numbers this first option will require all Inventory being brought into Tradepoint to enter in the serial numbers then. If your Inventory has some serialized items but not all of them then a setting for your Product to be a serialized item will also prompt you to enter in serial numbers on only those items that are serialized and not ALL Products.

Note: These preferences will carry through to using bar code systems as well so any serialized items will be able to be scanned into Inventory as well as on Order Fulfillment.

The two next preferences determine at what point in your sales process your Inventory numbers are updated for checking Inventory availability and removing Inventory as sales are processed.

For Inventory to be updated at the point of Orders check off the first option and for updating Inventory levels at the point of Invoices then check off the second option to check availability an update Inventory when an Invoice is generated.

Most companies will need to have the first option to have Inventory updated and to check availability levels when an order is generated. This will also allow Inventory availability to be viewable on all Orders generated internally within Tradepoint.

Create a Bill for Incoming Shipments: On any incoming shipments this option will automatically generate a Bill for any items that are received into Inventory. The receiving wizard has an option for this at the end of the Receiving wizard.

Inventory Liability Account: This is a required account for anyone which has physically inventoried items. First a few things about receiving inventory.

There are two ways of receiving inventory:

1. Some software applications (including QuickBooks and Simply Accounting) receive inventory and put it in a "hold". It can't be sold until you have the invoice from the supplier. That's because the reciprocal in their case is the bill to the inventory asset account for that item (i.e. the expense = the asset in inventory). This is the super simple way to do inventory but it also means that you can't sell product until the bill is received.

2. The second methodology, which Tradepoint uses, follows advanced accounting system (like AccPac) methodologies. The asset value of the items is estimated by the product valuations (or other costing models, averages and per Purchase Order, on the main page of the product screen) plus any duties and fees that you estimate on the purchase order.  These valuations are used to store the inventory and allow you to sell that inventory immediately.  To do this, the reciprocal account of the inventory asset account, instead of being the bill's expense account is the Inventory Liability Account.

Note: With the QuickBooks model it works the exact opposite of an A/R Invoice. This means that two G/L entries are done for each line item: One G/L entry is the expense that is the reciprocal of the A/P account and the other G/L entry is the reciprocal of the Inventory Asset.

With Tradepoint, that is NOT necessary on the Bill. Instead Tradepoint supports the A/P reciprocal expense (i.e. the total of the line items + shipping + taxes = the A/P General Ledger entry created when the Bill is completed).

Clearing Method: First In First Out or Last in First Out are your Options. The vast majority of companies will use the 'First in First Out' option.

Costing Model: Tradepoint supports three costing models Valuations, Averages, or Per Purchase Order. Most companies will use Valuations. Industries that see a great deal of price fluctuations from Suppliers will use either Averages or Per Purchase Orders.

Open Box Percentage of Valuation: When your company processes a return, refund or exchange, items have three basic states:  Like New, Open Box, and Damaged. 

1. Like New goes back into inventory at 100% value. 
2. Open Box goes in at whatever percentage you put in the "open box percentage of valuation". 
3. Damaged is written off at 100% of the original value and put in the damaged goods COGS account.

Use Automatic Min Quantity Calculations: This is an adjustable percentage used for fuzzy logic to generate suggestions of products to be reordered. Essentially, the percentage generates a gap required to keep enough Inventory on hand over time.

For example, if you sell 50 items a day, and it takes you 3 days to order, you'll want a cushion of 150 items. The Min Quantity will be the minimum number you need to keep in stock for the duration it takes to get the items into inventory so that you can sell them.