Entering the business expenses

Discussions, hints and tips for users of Ezi Accounting, from Ezi Solution.

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Entering the business expenses

Postby sami » Mon Jun 05, 2006 6:16 pm

All normal business expenses can be entered using the Purchasing module. However, there are some steps to be done first before you can successfully process the expenses.
Note that expenses can be entered using the Journal or Entry Voucher from the accounting section, but there are many advantages to using the Purchasing module.

To prepare the system to handle the expenses, you need to create service items from the STOCK > ADD/MODIFY STOCK screen. The system comes with pre-configured service items (see TEL for example), you can add as many service items as you wish.
Each service item can be posted to an expense account in the chart of accounts by simply entering that account in the PURCHASE A/C field. Once that is done, you also need to enter the names and contact details of the suppliers in the PURCHASE > ADD/MODIFY SUPPLIERS screen. Once the above steps are done, you can then start posting expenses in the PURCHASING screen, once you use the relevant service items you created above, the system will automatically update your chart of account and all of the relevant accounting reports including the TRADING, PROFIT & LOSS and the BALANCE SHEET reports, so in theory, you can know how the business is doing on a daily basis.

One note of warning, you MUST NOT use the service items used in the purchasing module in the sales module, the reason for that is not obvious, but to explain why, lets take an example of say Delivery Charges.

Lets assume that your business pays its suppliers for deliveries (which is a valid assumption for most businesses selling physical items), The price the business pays for supplier’s deliveries will be normally much higher than what the business charge its customers for delivering sales. But if you use the same delivery service item which you use in the purchasing module, its cost price will be much higher than the price you charge your customers, which will show a loss on each delivery item in the sales screen. So, make sure to use different service items in the sales and purchase screens.
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