Lesson 33-- Material Purchases
Whenever you buy supplies or materials, enter the expense into a material purchase transaction. Material purchases are one of the five classes of expense transactions included in Goldenseal construction accounting software. The others are equipment hours, subcontractor costs, other costs and labor hours.
This lesson shows you how to use the Goldenseal payables software to enter a simple purchase for a single material item.
NOTE: Lesson 34 shows you how to enter multiple items in a purchase.
To enter a material purchase, follow these steps:
Goldenseal job costing software allows you to assign every expense to a job (which can be a customer, a project, or an overhead account). You can also allocate costs to cost categories and locations. Entering job cost information is the best way to track your expenses, so you can understand how the money is spent in your business.
HINT: If you are only entering a purchase for the sake of job costing and don't want to track payments for it, enter Job Cost Only into the Status field. This feature is especially useful if you are entering old invoices when you first set up Goldenseal (see page 400).
A job is any part of your business that consumes expenses. Some jobs create income directly. Other jobs don't create income, but are allocated as indirect expenses (overhead, equipment, inventory and real estate).
Assign material purchases to any of the following job classes:
To assign a purchase to a specific job, use the Job Class popup menu to enter the type of job account, then click in the Job field, and assign the cost to a specific project or other job.
You can allocate each expense transaction to Cost Categories (see Lesson 11) and Cost Locations (see Lesson 12). Doing that will help you to get accurate job cost information, which can help you to run your business more profitably.
To enter cost category info, follow these steps:
Some purchases have special conditions-- they apply to another transaction, or receive special treatment in expense accounting. To enter a special condition, choose an item in the Applies To field.
When this expense applies to another transaction, enter the linked transaction into the Transaction field. The following choices work that way:
You can also use the Applies To field to identify :
Each purchase needs to have a payment method. Choose a method from the Payment Method popup menu.
Choose Vendor Invoice as a payment method if you are not paying for this item now. Goldenseal will add the purchase to your Accounts Payable.
NOTE: Lesson 36 shows you how to pay your unpaid bills.
Goldenseal automatically enters the vendor's usual payment terms into the Details field. If this purchase uses some other payment terms, change the contents of the Details field.
HINT: To see the usual payment terms for this vendor, choose Main Account from the View menu, and look at the Payment Terms field in the vendor account record.
If you are paying for this purchase immediately, enter the type of payment into the Payment Method field. Enter a specific account into the Details field-- for example, if you are paying by check, enter a checking account.
When you complete the purchase, a matching payment transaction will be created automatically for the selected bank account. If you are paying by check, you'll be asked which checkbook to use for the payment.
HINT: When you enter an instant purchase, all of your bookkeeping is completed instantly. The expense is marked as paid, your bank balance is adjusted, and job cost and billing information is posted automatically.
Use the Status popup field to mark purchases that will not be paid. To track a purchase for job costing, choose Job Cost Only. To enter a price quote that will be used to update unit costs, choose Pricing Only. If a purchase won't happen now, choose Planned or Void.
If you use some vendors infrequently and don't want to set up an account for them, follow these steps:
You save a purchase transaction when you close its window, hit the Enter key, Quit, or move to another record in the same window. When you save a transaction, Goldenseal also automatically 'posts' it.
WARNING: If you switch to a different window before you save a transaction, it is left 'dangling'. Other parts of Goldenseal will not know what you have entered there until you save it.
When you complete a transaction, Goldenseal checks for fields that cannot be left blank. For example, every purchase must have a vendor, and you can't close the transaction until you enter one.
HINT: If you start a transaction and are not ready to complete it now, change the Status field to Planned or Void.
When you save a transaction, Goldenseal automatically posts it to job costs and expense accounts. Posting takes only a fraction of a second.
If the payment method is Vendor Invoice, Goldenseal adds the purchase to Accounts Payable. For other payment methods, Goldenseal creates a compensating bank transaction as soon as you complete the purchase.
NOTE: If there is a 'dangling' transaction in the bank account that will pay for a purchase, you won't be able to save the purchase. In that case, open the bank transaction window, complete the bank transaction and save it. You can then save the purchase also.
Goldenseal closes a purchase transaction when it is paid. For a prepaid transaction, that happens as soon as you complete the transaction. For a billed purchase, it happens after the bill is paid.
Closed purchases have Paid in the Status field and a Paid watermark. You can still change some fields, but the account, status, amount and payment method fields are locked so you can no longer change them.
NOTE: If you need to change a closed transaction, find the payment transaction (see page 245) and set its status to Void. After you've made the change, restore the payment transaction to its original status.
To cancel a purchase but still keep it on file, enter Void into the Status popup menu.
To permanently remove a purchase, choose Delete Record from the Edit menu.
NOTE: You cannot delete records that have been paid or time-and-material billed, or that have other transactions that refer to them.
If you have started to change an existing purchase and want to go back to the original version, choose Revert Record from the Edit menu.
To return a purchased item for credit after it has been billed or paid, follow these steps:
In Goldenseal, most transactions are 'linked' to other transactions and accounts. Use the following menu commands to see linked items:
To see an account in an active clairvoyant field, click on the field's popup button, and choose View This from the bottom of the menu (the name of the command is different for each class of account or transaction).
To see any account or transaction that is listed in a disabled (gray) clairvoyant field, double-click on the field.
WARNING: If you use one of the linking commands to view a transaction that is not currently in the list of found records, Goldenseal will add it to the found set. Usually that is not a problem, but if you have been using a group of found records to make reports, you may need to re-find the original items.
In this lesson you've learned how to enter a material purchase. You may want to try entering a few sample material purchases, just so you can get comfortable with the data entry process in the Goldenseal accounts payable software.
For example, you could enter purchases for the following items:
Voilá. You can build a chic edible hat with detachable pink ear flaps!