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How Should I Handle “Free” Orders (Charitable Donations, Samples, Employee Consumables, etc.)?

 

Summary

Free orders, including charitable donations, samples, etc are common for Orchestrated clients and Orchestrated Software is equipped to handle them.

How To

There are two general options for handling charitable contributions:

  1. Use a Goods Issue. This is more common for clients who don't wish to run reports regarding these sales and just want to remove them from inventory at $0.  There are two factors to consider when filling out the Goods Issue:

A) Confirm the 'Inventory Offset-Decrease Account' G/L Account is posting to the G/L    account you want to hit (for donations, this is typically an 'In-Kind Donations' account').

B) You can then choose the 'Variance Reason' on the drop-down in the Goods Issue document itself to confirm whether it was a sample, employee liquor, donation, etc. For more information on what 'Variance Reason' to use, see the TTB BRO Line Explanation article: https://support.orchestrated.com/hc/en-us/articles/207138837-TTB-BRO-Line-Explanations-Document

2. If you do an A/R Invoice you will have a financial record that you can print, email etc. 

A) On the A/R Invoice, use Form Settings to make the 'COGS Account' field visible.  You can then change the G/L account to the account you want to hit right on the row of the invoice (for donations, this is typically an 'In-Kind Donations' account'). Remember to set the price to $0.

B) You can then choose the 'Variance Reason' on the drop-down in the A/R Invoice document itself to confirm whether it was a sample, employee liquor, donation, etc. For more information on what 'Variance Reason' to use, see the TTB BRO Line Explanation article: https://support.orchestrated.com/hc/en-us/articles/207138837-TTB-BRO-Line-Explanations-Document

C) In the Chart of Accounts, you will need to highlight the G/L Account and flag it as a "sales account".*  This allows the system to hit the account on an invoice, which usually hits a revenue account.

Using either the Goods Issue or the A/R Invoice works and will result in the same Journal Entry and impact on inventory. Goods Issue is faster, but an A/R Invoice allows you to have a document and is printable.  In addition, if you create a Business Partner and A/R Invoice for your donation, samples etc, this allows you to run reports and track exactly how much you've removed over a span of time.  

 

*To change to a 'Sales Account' in the Chart of Accounts, highlight the account you want to change and in the detailed section to the right, change the G/L Account Properties > Account Type drop-down.

 

 

Version 4.7.1.0

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