Hello,
I’ve created two Cost Centers and two Warehouses.
Company purchase goods and are received at main warehouse. Stock Entry and Purchase Order are linked to the first Cost Center.
Later the company send all goods to the second warehouse and it’s indicated the second Cost Center when making a Material Transfer via Stock Entry.
At the second Warehouse, linked to the second Cost Center, are sold all goods.
The issue is that the material transfer from the first warehouse to the second warehouse, it’s not reflected in Cost Centers and in Profit and Loss Statement.
Is it a bug or am I missing something?
I do not think Material Transfers should reflect in Profit and Loss.
Best case scenario is that it will reflect in Balance sheet as an increase/reduction in stock valuatation.
Regards
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Ok…
Let’s suppose this company has one main warehouse and many stores… many. When the company purchase goods for selling, they do that purchase globally and later send goods to every store according to individual necessities.
Based on Cost Centers and doing material transfers, how would the CEO could know the Profit and Loss statement per store?
How would an Accountant Manager would handle this material transfer?
I mentioned “many stores” because doing purchase for every store wouldn’t be efficient. But Ok… let’s say the Buyer would make a hundred of purchase orders, every related to the Cost Center per store. Now imagine that at the main warehouse there are some goods from the last year and the company wants to sold them with a major discount or any other kind of campaign.
Company would make a material transfer to every store. Those sales would represent profits per every Cost Center, but with any loss.
@rmehta how could this be handled?
(Please, excuse me for tagging you, I need to respond this today).
Hello Francisco
I repeat Profit and Loss will not be affected by Transfers.
Profit and Loss is only affected when Sales are made.
When you make sales to customers you can choose cost centre to which the sales should reflect and this will be reflected in the Profit and loss for that cost centre.
Francisco, your question is not an ERPNext question, it is an accounting question and bothers on your understanding of accounting entries.
Regards
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I understand this doesn’t have effect on profit and loss.
But how are we managing the cost center value addition to second warehouse and deduction from first warehouse, when doing a transfer.
I still don’t see any proper solution on this
Please let me know if this is available or any work around for this