Question: Method Lifo And Negative Earnings

Method Lifo And Negative Earnings

Well, I am using the LIFO counting method, when I check in the daily sales report I see in the daily earnings that the cost of the products is higher than the sale of products, this happens

MS

Michael Salcedo

Asked
Well, I am using the LIFO counting method, when I check in the daily sales report I see in the daily earnings that the cost of the products is higher than the sale of products, this happens one per day. I want an explanation
  • MS

    Mian Saleem

    Answered
    Hello,

    If the price is lower than cost. All method will show be same.

    What is the last purchase code and what price are you selling it. I will need step to reproduce the issue.

    Thank you
  • MS

    Michael Salcedo

    Answered
    The costs are lower than the prices, the strange thing is that there are days that the profits turn out well and others the negative gains, I need an explanation because I remember this
  • MS

    Mian Saleem

    Answered
    Hello,

    > If the price is lower than cost. All method will show be same.

    What I can guess is already told you. You just need to make sure, the product is not sold below the cost.

    Thank you
  • MS

    Michael Salcedo

    Answered
    The selling price of the product is higher than the purchase cost, but it should always show positive earnings, I have used all three methods with different customers and I always have the problem I still do not understand or see a valid answer, can you help me to give an answer to my clients thanks
  • MS

    Mian Saleem

    Answered
    Hello,

    Without know or check the details, how you expect to answer :( Can you backup database and send me or at least let me know the step to replicate.

    I was guessing the price is lower than cost but you said that is not the case :( Help me out to investigate the issue.

    Thank you
  • MS

    Mian Saleem

    Answered
    Hello,

    I am sorry as I couldn't able to review the database. I will doing it on Monday and shall update you.

    Thank you
  • MS

    Mian Saleem

    Answered
    Hello,

    **You statement is wrong that the LIFO is causing the -ve earning.**

    I have checked, the accounting method was not LIFO on the `2021-01-06` and `2021-01-08` It was AVCO and the `avg_cost` of few products is quite higher than sale price. Please review the attached screenshot.

    Thank you
  • MS

    Michael Salcedo

    Answered
    observing your answer I ask you
    1. What is the difference between the cost that is added when adding product with the cost of purchases, what does the system take to make the difference in profits?
    2. what is the function of cost avg cost?
    3. If I first used the avco method for a period and now I am using LIFO, how can I disable the avg cost?
  • MS

    Mian Saleem

    Answered
    Hello,

    1. LIFO will use the cost of latest purchased product while AVCO will use average cost. You can see the average cost of the products is quite high than the cost. If you need to reset average cost, you can select the product and then select set average cost from page menu on list products page.

    2. System calculate the average cost on each purchase to use for AVCO method.

    3. You should use only a single method and never change it in future as changing the accounting method will result in different costings. It's mentioned in after install guide of documentation.pdf

    Thank you
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