Hi If a construction company buys say plasterboards on a job to job basis rather than keeping 100 in stock to be used if and when would you code it in sage as stock or mats purchased?
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You would code it all to materials and then, at the year end, review with him, anything that may have been bought in, say, March, that wasn't invoiced until April (assuming a March 31 year end)
So, it all goes to purchases, and then you have a stock journal at the year end.
DR balance sheet Stock
CR profit and loss "closing stock"
Hi John
I'm not used to posting to stock, only ever seen the actual accounts for construction companies (in a former life) but
I thought wip was only for partially finished goods rather than unchanged raw materials, so you would end up with a rather large amount of plasterboard coasts in there, most of which will be finished product and re-sold by the time of the year end, so they wouldn't even be stock any more. Or are you then moving from wip on a monthly basis or by some other mechanism?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I usually find that identifying the (larger) stock items helps the smaller client to then consider the labour time, on each job that stock relates to... assuming the job has started. I would then add that labour time to stock, and show as one figure on the accounts as "stock and WIP". I didn't get the impression Sam was going into that sort of detail, so never thought to mention it, sorry Sam.. we all got you there in the end!!
If he's buying materials specifically for each job, and it's a job that's ongoing over a year end, I'd treat it as WIP. It may be that sales need to be accrued, or prepaid, too, depending on whether work has been done but not invoiced, or vice versa, at the year end. It depends on the size of the job, and the business. We had to do this for one of my former clients, not just at year end, but every month.
