How to use inventory feature for raw materials and finish goods?

Hi everyone,

Here's a great question posted by one of our users and we think it'd be good to address! Unfortunately, we do not have an automated inventory feature that allows you to conveniently track your raw material and the flow into finished goods/products.

Nevertheless, here is a work around that you may consider.

Firstly, head over to Products & Services (Inventory) and create a new product. Below is an example of a raw material for jeans that I’ve created. Go ahead and ignore the ‘I sell this product/service’ section and fill up the ‘I buy…’ section.

In this example, I’ve updated the tracker with 3 raw materials required to produce a pair of jeans.

You may input your opening balances for the raw materials inventory if you’ve got any on hand currently. For this example, I will go through raising a Bill through the Purchases feature to update the available quantity.

By doing so, your raw material inventory will automatically be updated as seen below.

The next step would be to make the necessary adjustments to the inventory according to the amount of raw materials used to produce a pair of J-004 Billie Jean Custom. Click HERE to learn how to make inventory adjustments. For this example, we’ll assume 2x Denim Thread, 1x Elastic Band and 1x Jeans Buckle.

Once done decreasing the stock of your raw materials, you are ready for your final step of updating the available stock for the J-004 Billie Jean Custom.

Important Note: The total raw material cost, unit cost and cost of sales – Jeans should be the same. In this example, it is set at RM50.

With that, you’ve just successfully recorded the purchasing of raw materials -> production of finished good within your accounting software and inventory tracker.

I’ll definitely be looking into this further and working with our development team to have a more automated inventory feature available in the near future.

Until then, I hope this serves everyone well!

Regards,
Travis Tai – Community Manager

Official comment

Financio Community

July 16, 2018 07:13

Hi Ahmad Taufiq El Azzam,

The most common practice is to have labour cost recorded separately as the total amount paid out to employees at the end of every month. If you have an existing payroll software, you can record total amount in a sub-category under Cost of Sales through our Deposit feature.

If you do not have an existing payroll software, you may input your employees detail into Financio and record their individual salaries whenever you payout. Once again, you will create a sub-category under Cost of Sales to account for the labour cost.

Ahmad Taufiq El Azzam

July 13, 2018 02:45

Hi Travis Tai, is there a way to add the cost price (for finished products, eg J-004 Billie Jean Custom) to include other cost such as labour cost etc.

How to use inventory feature for raw materials and finish goods?

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