[Kathy Palmer]

Just a quick question on internal accounts -

I want to be able to track the stock that is taken and used by a client's workshop (ie expensed, not sold) for items such as safety gear, tools, etc.

I've set up an Internal Debtor Account, ensured that all items charged will go out ex-tax and at cost, no problems there, but of course since Internal accounts don't impact on the GL, is the best way to handle this via a journal once a month or so?

Say: Dr Expense A/c
Cr Inventory A/c

Something like that?

I've thought it through a few ways, and have ruled out a normal debtor account as this would impact on sales figures for the GST, even though I am making it ex Tax.

A stock transfer would only move the stock from one location to another, and this stuff really is being used up, not on jobs.

[COBS Tech Support]

An internal account can be used for this purpose, however you would achieve the same result with a normal debtor (customer) account if you set the discount formula of the account to zero, since all sales will then have zero sell prices.

Since the sale value is zero, the calculated GST should also be zero so there should be no impact on your GST reporting amounts.

BTW, internal accounts don't post debtor values to the GL, however when inventory is still physically adjusted, this may post to the GL. It depends on how inventory posting has been set-up. For example, if you are using the opening/closing stock method, then the value of your inventory posted to your GL is based on your closing stock value from your stock ledger anyway. So this issue in that case is irrelevant.