Standard Costing
Managely uses standard costing as the costing method. This is an important change from AlarmBiller, which uses average cost.
To determine the value of parts in a warehouse, the system multiplies the standard cost (defined for the warehouse) of each part by the number of parts in the warehouse. (The quantity on hand is calculated based on the transactions in the part ledger for the part.)
How to Set Up Standard Costing
Setting up standard costing has four parts:
- Enabling inventory
- Adding parts
- Adding warehouses
- Adding parts to the warehouses
Enable inventory:
- Go to Setup > Company > Preferences > Inventory tab:
- If the Enable Inventory toggle switch is Off, switch it to On:
- Select a Main Warehouse.
- Select a Misc COGS Account.
- Select the Costing Method. (The only choice is Standard.)
- Save the changes.
- Log out of Managely and log in again.
If Enable Inventory is set to ON and a user changes it to OFF, there is a warning message displayed.
Selecting Yes to the message changes all previous Part Ledger entries to inactive. This results in the quantity on hand of all parts in the system to be updated to zero. No future entries will be written to the part ledger. The inventory value will be determined by the entries to the general ledger account defined for the part and not the general ledger account defined at the warehouse level. Customers should consult their financial advisor before changing the Enable Inventory from ON to OFF if previous transactions exist.
Add a part:
- Go to Setup > Items & Parts > Parts or to Inventory > Parts: (both go to the same window)
- Click +Add Part.
- Enter information for the part.
- Select the Costing Method = Standard Cost.
- Add a Default Rate.
- Add a Cost Amount.
- Save the part.
Add a warehouse:
- Go to Inventory > Warehouses:
- Click +Add Warehouse.
- Enter information for the warehouse:
- Save the warehouse. This opens the warehouse to add parts.
Add parts to the warehouse:
- Go to Inventory > Warehouses.
- Click the warehouse link in the Warehouse Code column.
- Click the Physical Inventory tab:
- Click +Create Physical Inventory.
- Enter the Physical Inventory Date and a Note.
- Switch the Show All Parts toggle to Yes.
- Find the part in the list to add to the warehouse. (The filter can be used to select only those parts to be included. For example: if the warehouse is a truck, then the parts may be limited to only those parts that the technician needs for service. Any parts listed will be added to the warehouse including those parts in which a new quantity on hand has not been entered. These parts will be added to the warehouse with the quantity = 0.)
- In the On Hand column, click in the row for the part to add to the warehouse, and type an on-hand quantity:
- Repeat “3” and “4” for all parts to be added to the warehouse.
- When finished adding parts, click Complete.
- At the prompt, click Yes.
The Part Ledger shows the physical inventory transaction and the quantity of the part in the warehouse. This is shown in multiple places:
- Warehouses > Warehouse Part Ledger tab:
- Parts > [Part] > Part Ledger tab: {other option: Inventory > Parts}
- Inventory > Part Ledger
If the part is in multiple warehouses, you can set a different part cost in each warehouse (if needed).
- Go to Setup > Items & Parts > Parts.
- In the Part Code column, click the link for the part.
- On the Part > Warehouse tab, click the Adjust button for the warehouse row.
- Type a new Cost for the part for the warehouse.
