The Sleeter Group - A Message from Doug Sleeter, 2007 Sleeter Group Conference Update, 2007 Consultant's Reference Guide Released, QuickBooks POS Book - Coming Soon, Tricks of the Trade, Conference Exhibitor Ads

This month, I’m proud to announce our new alliance with Fishbowl Inventory. The Sleeter Group has entered into an agreement with Fishbowl to handle the field operations for their burgeoning Value Added Reseller (VAR) program.

As many of our members in The Sleeter Group Consultants Network have confirmed, we think the Fishbowl product is a fantastic solution for a broad set of clients with inventory tracking needs. Most of these clients are happy using QuickBooks but have tracking needs that cannot be handled with the standard QuickBooks features. The combination of Fishbowl Inventory and QuickBooks is a perfect example of how add-on software can extend the life of QuickBooks and save clients from switching out their whole accounting system in order to solve one part of the overall problem.

Please join us to learn more about how you can join our growing group of consultants who are jumping at the opportunity to become Fishbowl VARs.

The Sleeter Group’s 2007 Accounting Software Consulting Conference is going to be our best event ever! Yes, we have a new conference name! We are changing the conference name because we are expanding our focus to include more accounting software applications, however QuickBooks and QuickBooks add-on software will continue to be a primary focus.

The conference will be held at the beautiful Rio Suites Hotel in Las Vegas, NV October 23-26, 2007. Optional pre-conference "drill-down" sessions will be held on Tuesday 10/23, and the main Conference will be Wednesday 10/24 through Friday 10/26. Specific session descriptions will be announced on our web site as they are finalized. We expect over 600 attendees and 40 exhibitor/sponsors this year.

We will begin taking conference registrations in mid April. Watch our Web site for details. Companies interested in exhibiting should contact our office immediately.

The 2007 update is now available for the ever-popular QuickBooks Consultant’s Reference Guide. This guide contains troubleshooting techniques designed to help you diagnose and fix problems. The 2007 edition is full of new content, including a more in-depth chapter on networking QuickBooks, an expanded chapter on data file management and new troubleshooting tips.

The Consultant’s Reference Guide is $89.95 as a book or CD-ROM, $79.95 as a download, and $119.95 for both the Book and CD-ROM as a bundle. You can order directly from our online store. The Consultant’s Reference Guide in CD format is included when you join The Sleeter Group Consultants Network.

Our upcoming book, QuickBooks Point of Sale – Best Practices for Success is just around the corner. This book provides the consultant as well as the business owner with a complete reference for QuickBooks Point of Sale. Authored by nationally recognized POS expert Leslie Capachietti, and co-authored by Steve Green and Pam Newman, this book is all you’ll need to get up and running with QuickBooks Point of Sale.

Every day, members of The Sleeter Group’s Consultants Network tackle the day-to-day problems of their clients in the real world. The following are some of the more general problems and solutions that surfaced this month on our "Sleeter Group’s Consultants Network Forum".

This is a great question and it reveals the dangers of improper setup and then merging inventory items to fix it.

In your particular case, as Mario already mentioned, the solution could be as simple as finding the original “purchase” transactions and making all costs the same (I think you said you had some items with zero cost), but there is a deeper problem here that I want to warn you about.

When you merge inventory items, QuickBooks merges ALL historical transactions, including the purchases, sales, average costs, etc. While that may seem fine, the results sometimes cause prior period financial statements to change, most likely in undesirable ways.

In the table below, notice what happens to the balance in the inventory asset when two inventory items are set up with different costs, followed by purchasing, selling, and merging. The table shows two examples. The first example shows how it works fine if all the quantities are the same, but the second example shows how things go haywire when the purchase and sale quantities are all over the map.

Example 1:	Example 2:
If you set up Items:	If you set up Items:
Test1 – Cost $10, Price 30	Test1 – Cost $10, Price 30
Test2 – Cost $20, Price 40	Test2 – Cost $25, Price 50

Then, purchase	Then, purchase
Test1 – 50@10 = $500	Test1 – 15@10 = $150
Test2 – 50@20 = $1000	Test2 – 35@25 = $875

Then, sell	Then, sell
Test1 – 5@30 = $150	Test1 – 3@30 = $90
Test2 – 5@40 = $200	Test2 – 13@50 = $650

... at this point, you have inventory value of:	... at this point, you have inventory value of:
Test1 45@10 = 450	Test1 12@10 = 120
Test2 45@20 = 900	Test2 22@25 = 550
Total Inv = $1350	Total Inv = $670

Now, merge Test2 into Test1	Now, merge Test2 into Test1
The results are great.	The results are not good at all:
Test1 90@15 = 1350 … all is well.	Test1 34@20.50 = 697

In example 1, notice that when the merge happens, the average between the two costs is used. Everything works out great because both items have the same quantity on hand, making the total cost (and average cost) the same before and after the merge.

However in example 2, notice you have a difference in the total inventory value ($697 vs. $670). The problem has to do with the “weighting” of the average costs. That is, the quantity on hand just before the merge (Test1 – 12@10 and Test2 – 22@25), becomes a total quantity of 34@20.50=$697. The weighted average of the costs is 20.50, and the total quantity is multiplied by that average to arrive at the total value of the on-hand inventory.

Therefore, because the number of units purchased and sold before the merge use the “premerge” average cost of each item, the act of merging the two items together causes a recalculation of the averages. This results in a different inventory reduction on all sales transactions.

Because of this problem, my advice is to avoid merging inventory items in QuickBooks. This behavior is the same for ALL versions of QuickBooks.

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