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Transfers
Posted: Thu Feb 13, 2014 11:07 am
by Tino
The girls are transferring stock from one branch to another at no cost, is this the correct procedure? if not can you please advise on the correct procedure.
Posted: Thu Feb 13, 2014 11:16 am
by COBS Tech Support
Transfers should be raised at zero sell price - you normally don't "sell" stock when transferring it. (Although there are exceptions to this depending on the business type. I.e., you might want to charge one of your divisions a nominal transfer fee.)
A transfer should, however, have a cost price associated with it. If you're moving stock item "A" to location "2" and the unit cost is $1, then you need to transfer the value of that stock ($1 = cost) to the new location. If you didn't do that, you are in effect writing the stock down, which is sometimes what you want to do if you want to move goods to, say, a damaged stock location. But more typically you transfer stock because you want to stock it or sell it at different location. In that case you want to retain its value, so the transfer should have costs on it.