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Level 1

Demo and Loaner Inventory Management and COGS

Hello We use QB Ent.2018

 

Question I have is that we have 250 items that  we warehouse and sell it to end user

 

From time to time our sales guy request Demo items for end user and also we do lot of trade shows 20-25/year where we demonstrate our items. These are actual inventory items.

So here are the problem

1. How to create Invoices for the items that leave our warehouse for Demo purpose or loaner purpose. These are not actual sales so it should not show up in PL statement and should not affect COGS

2. When these items come back from the show they should go back in the inventory and be able to be sold to actual customer at this point it should get recorded in PL and COGS

 

What we did is that we created the same part numbers with  - DEMO at the end and then we shift actual inventory to Demo inventory through Inventory adjustment  and goes out for trade shows and demo purpose and gets recorded in n account that we created as AR-Demo and we assigned the accounts for these demo part numbers as  Inventory Asset-Demo. So all the Demo parts reflect COGS account as Demo Inventory Asset, resale account also as Demo Inventory Asset so this way they do not affect my COGS and PL statement

 

Problem is that when we transfer Actual working inventory Item to Demo Inventory and bring it back from Demo Inventory to Actual Inventory via Inventory adjustments then it losses the actual Cost of these items and hence inventory Valuation gets completely messed up

 

Any other solution to manage this problem I am sure all tech companies must be facing this issue

as we have to send end customer Demo so they can test and if worked fine they then actually put an order for much larger system. Our issue is we can not set aside equipment as Demo we have to be able to use new items and demo items as and when needed for actual sale and or Demo

 

Please help

 

 

 

 

2 Comments
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Anonymous
Not applicable

Demo and Loaner Inventory Management and COGS

Im not an enterprise user but i know that it supports multi-branch/warehouse operations.

Why don't you treat all the 'demos' as a separate warehouse/branch location rather then customer or vendor.

This eliminates need for separate item numbers, transfers between warehouses will carry cost properly, and stock will never leave the balance sheet.

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Level 1

Demo and Loaner Inventory Management and COGS

But how would that help having another Warehouse and shifting items there still needs some kind of accounting right??? I still have to ship items out of that Demo Warehouse to the end user or to our trade shows and need to know and track items in and out. As lets say item C went out to a customer for a demo and now I need another same item C for my trade show so until an invoice is done the item will not get subtracted and accounted. And when item is returned back we do credit memo and bring it back right?

 

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