Where to record various types of Transaction?

September 30, 2013
Magellanic Cloud

Major Brands of Accounting Software in market record transactions in different modules such as (i) Vendor process module, (ii) Customer Process module, (iii) GL module etc.

Let us state that this method is neither supported by theoretical accounting, nor it is a simple process.

But this method did introduce the integration of Financial Accounting and Inventory/Cost Accounting. Such an integration is still not possible by following theory of Financial Accounting alone.

On the other hand, Soft Accounting System has achieved integration of Financial Accounting and Inventory/Cost/Management Accounting without rotating the user into the roundabouts of vendor process/customer process/GL process etc.

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In Soft Retail Accounting, transactions are not recorded on the basis of vendor process, customer process or GL process.

Here transactions are to be recorded on the basis of following types of transactions:

 
1- Sales/Sales Returns — to be recorded in Sale Form/Sales Return Form
2- Purchase/Purchase Returns — to be recorded in Purchase Form/Purchase Return Form
3- Any cash/bank transaction other than categories 1 and 2 — to be recorded in Cash Book
4- Any non cash/bank transaction other than category 1 and 2 — to be recorded in General Journal
 

In Soft Accounting, there is only one cash/bank book. In other systems, there are multiple cash/bank books like cash receipt book (AR receipt voucher), Cash payment book (AP Payment voucher) , Bank receipt voucher, bank payment voucher etc.

But … Soft Accounting gives a simplified solution.

In Soft Retail Accounting, there is only one Cash Book. It will record all the receipts/payments from/to ARs/APs whether in cash or through bank.

Please read the Cash Book section of our user-manual from following link:

http://www.mediafire.com/download/pecdhx5i9hzxrsf/Retail+Documentation.pdf

Thus in Soft Accounting:

AP payment will be recorded in cash book … whether paid in cash or through cheque. AR payment receipt will also be recorded in cash book whether received cash or direct deposit of money by customer in our bank. This cash book can handle as many bank accounts as you choose. Expense payment will also be recorded in cash book whether paid in cash or cheque. Any revenue other than sales will also be recorded in cash book whether received in cash or direct deposited in bank.

Cash book however will NOT record cash sales or cash purchase … Cash sales are to be recorded in sale form, cash purchase to be recorded in purchase form.

similarly, cash book will also NOT record cash sales return or cash purchase return. These things will be recorded in sale return form and purchase return form.

Get LIFO and Weighted Average Costing at the same time:

September 3, 2013
Magellanic Cloud

While other world famous (commonly known as most powerful) accounting software requires you, at setup stage, to choose one of three costing methods i.e. (i) LIFO, (ii) FIFO and (iii) Weighted Average.

You will choose only one of these methods at the setup stage. Afterwards, you will get all the costing reports based only on the one method you had chosen at the time of starting with that world’s most powerful accounting software.

lifwtd

Whereas in Soft Retail Accounting, you are in no need to setup your costing method and Soft Accounting will automatically give you costing reports based on (i) LIFO and (ii) Weighted Average at the same time. For example see following screen shots of (i) Income Statement LIFO basis and (ii) Income Statement Wtd. Avg basis … and see that for the same period, there is difference in net profit. Therefore we must conclude that Accounting Software is not complete if it gives only one type of costing information. Following screen shots are from Sample Data file:

is lifo

and now see following Wtd. Avg based Income Statement for the same period.

is wtd

Not only Income Statements, Soft Retail Accounting gives Balance Sheets also in these two varieties. In addition, the inventory reports also give information about gross profit on both LIFO basis as well as on Wtd. Avg basis. So with Soft Retail Accounting, you will get even more insight into the affairs of your business than can be offered by other renowned Accounting Software Systems.

How to write Invoice No./Voucher No. in various Entry Forms:

September 2, 2013
Magellanic Cloud

Invoice Number in Sales Invoice Form is automatically generated and it is in sequence. When you press “New Invoice Button”, then all the columns on left pane area are automatically filled and cursor automatically goes to right table area in the “Item Code” column.

In the Purchase Invoice, the Invoice No. and date columns are not automatically filled when you press “New Invoice” button. Because unlike sales invoice, purchase invoice numbering is not your own choice. You will write the number as appears on actual purchase bill.

Similarly, in cash book also, the voucher number column is not automatically filled. You will write the actual bill number, deposit slip number, withdrawal cheque number etc.

In the sale return/purchase return forms, you will write the original sale invoice number plus original date/original purchase invoice number plus original date.

Know which Item to Purchase and at what price

September 1, 2013
Magellanic Cloud

Soft Retail Accounting gives you the most direct method of ascertaining the purchase requirements of your retail business. It works in a simple way. At the time of defining your trade items in “Items and Prices Setup”, you mention “re-order level” and “target level” for each item.

Let’s say for a particular item, the “target level” is 10 and “re-order level” is 2. It means that when stock of this item will reach to 2, now this item will be included in the list of “short items” which you can see from Main>>Inventory/Stock Books.

The “Short Items” screen will display the list of all the items whose stock has reached to “re-order level”.

This list will also tell the “last purchase price” and “weighted average purchase price” of each listed item. It will make sure that you or your purchasing staff will make no mistake regarding the prices of required items at the time of purchase.

This “short items list” will also tell the quantity required to be purchased of each listed item.  The “required quantity” is calculated on the basis of “Target Level” which you had set for the item in the “Items and Prices Setup”.

Let’s say the “target level” for a particular item was 10 and the “re-order level” was 2. Now when stock of this item will drop to 2, then “Short Items” list will show the “required quantity” to be 8. Because when you will purchase 8 units, you will again acquire the target level which is 10.

In case any item is not intended for next time purchase, then you will write both “re-order level” and “target level” to be zero (0). In addition, you will check mark the “discontinued” column. An item which is marked as “discontinued” will not appear in purchase demand (short items) list.

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