It is sale entry for that item with zero or reduced price. If item is completely spoiled and cannot be sold then make usual sale invoice entry right when item is spoiled or comes to notice. The listed price will come automatically. You will manually replace the price with 0. Furthermore, you will also manually edit the ‘explanation’ of that sale invoice. For a normal sale entry, there is no need to enter ‘explanation’ because it is automatically written by the system. But for a spoiled or wasted item’s entry, ‘explanation’ should be manually modified.
If wasted product is sold at reduced price then make this entry at the time of sale. The effect of sale invoice entry with zero or reduced price will be that the entry will be reflected as ‘loss’ in relevant reporting.
Let’s say a Toys and Cosmetics Shop is already running. If business is to be shifted to Soft Retail Accounting on let’s say 25-05-2018, then we are in need to enter two things in system:
Stock Positions as on 25-05-2018 and;
Balance Sheet as on 25-05-2018.
Let’s say following is the stock position as on 25-05-2018 (Table-A):
And following is the Balance Sheet as on 25-05-2018 (Table-B):
Now download Soft Retail Accounting ready to use demo file from this link:
It takes less than 1 minute to download. Password is — mysystem
After entering the correct password, main screen will be displayed and you will press ‘Setup’ button. Following screen will be displayed.
First option ‘Company Setup’ is very simple. This form is already filled with sample data and you only have to replace it with your information. We here ignore this step and assume that sample data is your own information.
Our first task is to enter stock positions as on current date. But before feeding stocks, we are in need to tell the system regarding what are the trade items. Here we have only five (stock) items so we can easily feed these five items in ‘Items and Prices Setup’. Following screenshot shows that all these five items have been properly entered:
Note: Here we have not added item pictures. Item pictures are optional. System will work if you choose not to enter pictures. You can however anytime include pictures of items. Also note that here we have entered ‘sale price’ against each item. We shall add ‘cost price’ at the time of entering opening stocks.
After having entered all the items, now we can feed opening stock positions as on current date. On the ‘Setup’ page, this is the third option and following is the completely entered ‘Opening Stock’ form:
Now we have to enter opening Balance Sheet. It is 4th option on ‘Setup’ page. But from the setup page, we can configure Balance Sheet except for Cash, Bank and stock Accounts.
In this case, we have only stock and cash/bank Accounts in the opening balance sheet. In Soft Retail Accounting, opening stocks entry automatically debits ‘Purchase’ Account. Unsold portion of ‘Purchase’ Account is automatically reflected as ‘stock’ in the Balance Sheet. So we do not need to configure stock in Balance Sheet. But since opening Stock was basically cash purchase entry, so we are in need to bring equivalent cash i.e. Rs.19090/- as capital. Following is cash book entry for this purpose:
Note that this entry is made in date 24-05-2018 because on 25-05-2018 this cash will be ‘spent’ in ‘opening stocks’.
For Cash in hand, Bank A and Bank B, following will be the entries.
Now see that due to automated features of Soft Retail Accounting, opening balance sheet form was not even employed. We made only opening stock entry and cash book entries. After these entries, Cash Book Report (from ‘Financial Ledgers’) will be reflected as under:
See that opening stock entry is automatically reflected in Cash Book Report. And this report is telling nothing about Bank Accounts. Because in Soft Retail Accounting, we get separate Ledger Account for every bank account. Following are both Bank Account Reports:
Not only above, in fact we also have got ledger accounts of ‘Capital’ and ‘Purchase’ Accounts as well as inventory ledger accounts of all the five trade items . With simple opening stock entry and cash book entries, whole setup procedure not only has completed but we have received all the reporting up to final accounts. Following is the Balance Sheet of our newly entered business:
In Soft Retail Accounting, we feed only the minimum of input while get maximum reporting as output. But in this example, there were only five trade items. Any running business will have far more trade items and opening stock entry will be a tedious process. As an option, you can provide us your current stock list (Table-A) and Current Balance Sheet (Table-B) in Excel format. We shall import your stocks and balance sheet in Soft Retail Accounting at no extra cost.
However we clearly state here that standalone Soft Retail Accounting functions optimally with maximum stock items between 1000 to 2000. This range is suitable for many kinds of trade/retail businesses such as Garments Shop, Cloth House, Toys Shop, Paint Shop, Tyre Shop, Spare Parts Shop, New Vehicle/Motorcycle Show Rooms etc. However large super stores will have to look for other options that also include high end client server or cloud based Soft Accounting Implementations.
Soft Accounting file of Toys and Cosmetics Shop where we made these sample entries of opening stock and configuration of opening Balance Sheet may be downloaded from this link. Password is mysystem.
Standalone Soft Retail Accounting is MS Access 2010 based application. Here you will not see ‘save’ button in any entry form because everything is automatically saved once a complete row within an entry form is entered and cursor moves to the next row. When cursor has moved to next row, then it means that all the previous rows of data are saved. However current row is not saved. If the current row is completely not filled i.e. any required field remains blank and the system is shutdown or entry form is closed then incomplete entry will not be saved.
Well — there are thousands of Accounting Software systems available on Internet and all of them have the claim that only their system is the simplest. Fact is that most of them do not even function upon downloading. Only few Accounting Software Systems do work and one of them is Soft Retail Accounting.
In order to see if a system is simple or not, we should see the output of that software. If output reporting is comprehensive where inventory accounts, cost accounts and financial accounts all are included, then somewhat complexity of input entry forms may be tolerated. Most of the working Accounting Software Systems fail this test because reporting is often insufficient or sometimes meaningless whereas input entry forms are always more complex than Soft Retail Accounting.
Anyhow, the topic is highly subjective. My advice to readers is that please download Soft Retail Accounting and also download few other working systems and then compare entry forms of each system. How setup of the system works. How opening stocks are injected into the system. How purchasing and selling works and how receipt/payment of cash or cheques function. Soft Retail Accounting provides logically straight methods for all theses tasks. There is not a single unnecessary field in any entry form. The underlying idea for the development of Soft Retail Accounting was to ensure getting maximum of output reporting by entering only minimum of input. Extra input columns however can be added at extra low cost upon request of specific clients.
Nevertheless, Soft Retail Accounting does not offer specific functionality suitable for only large retail setups. Soft Retail Accounting is here to empower small retail businesses with the capability to take them at the next level of growth. When finally the business shall prosper into the shape of a successful giant, then it can easily switch to any suitable high-end Accounting System.
Financial Accounting is basically Non-Integrated Accounting which accounts for only the monetary aspects of every business transaction. You purchase hundreds of inventory items but to record purchase, you only debit one “Purchase” Account with purchase value without any mention of quantities involved. Similarly you sell different trade items and record them by giving credit to only “Sales” Account. Consequently your Financial Accounts fail to tell you the complete story of your business affairs. You get a Trial Balance and Final Accounts. You know your Gross Profit and Net Profit. You also know financial worth of your business on the Balance Sheet date. The things you don’t know in this way are the details of your inventory items purchased/ sold, inventory stocks, inventory costs taken up in every sales transactions (Trading Businesses) or ongoing production activities (Manufacturing Businesses).
To overcome these limitations of Financial Accounting, large businesses usually adopt and implement another difficult and expensive Accounting System which is known as Cost and Management Accounting. This is also non-integrated accounting method because it functions parallel to the Financial Accounting. Small businesses end up in the maintenance of only some “Stock Registers”, in addition to the usual Financial Accounting. It means that under non-integrated accounting systems, Financial Accounting and Inventory/Cost Accounting books/ ledgers are separately maintained.
To explain an Integrated Accounting System, we here assume that reader already knows the usual procedure of recording transactions where entries are basically recorded in Cash Book and General Journal, then posted to Ledger, then summarized in the form of Trial Balance and then results are taken in the form of Final Accounts.
An Integrated Accounting System would be one where only a single set of books would contain all the information of Financial Accounting as well as Inventory/ Cost Accounting. Such a system would be very difficult to maintain if accounts are maintained manually. But most available Computerized Accounting Systems are Integrated Systems.
Here we take the example of an Integrated Accounting System such as “Soft Accounting System” and explain how it’s functionality differs with Non-Integrated manual Accounting system.
Whereas in manual Financial Accounting, you enter Cash/Bank transactions in Cash Book and enter all other transactions in General Journal; in Soft Accounting System, you record Sale/Purchase transactions in Sale Invoice or Purchase Invoice. In the case of cash purchase/sale, that entry shall automatically be recorded in Cash Book. And in the case of credit purchase/sale, there will be no need to record it in General Journal. With a simple entry in sale or purchase invoice, you will not only get all the Financial Accounting Ledgers and Trial Balance, you will also automatically get your inventory and cost registers. If yours is a trading Business, which is fully supported by Soft Retail Accounting, then with a simple entry in sales invoice form, you will also automatically get Cost of that particular Sale calculated on the basis of both Weighted Average Costing and LIFO Costing methods.
To record daily expenditure and transactions other than Sale/Purchase (or Sale/Purchase Returns – which are to be recorded in Debit/Credit Notes), there are also Cash Book and General Journal entry forms. So this is the way an Integrated Accounting System works and this is the method of Soft Retail Accounting.