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Anonymous
January 2, 2020
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Hi. I need help with the relationship between inventory accounts for livestock and converting them to processed cuts for sale.

  • January 2, 2020
  • 1 reply
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I guess this is a multi-part question for Desktop Pro Plus 2020. The first part has to do with treating livestock as inventory. The bulk of my livestock are purchased as feeders, rasied, then taken to a butcher. We then sell individual cuts of meat after they are processed. Am I correct that, when I purchase the livestock, I add their purchase cost to a fixed asset account?

The second part is, how do I add the individual cuts as items for sale? In the item list where you create products for sale, there doesn't seem to be an option for inventory items.

Finally, are processed cuts of meat even inventory? I know that the livestock are inventory, but I am unsure if the cuts that come from them are. In any event, how do I track the sale of the cuts back to the fixed asset account I create for the livestock.

Sorry for the long post. I hope this makes sense.
Best answer by JonpriL

Also, I should probably clarify a bit more about how my business works.

 

I raise a pig. I take it to the butcher. The butcher processes the pig into cuts. The cuts are then picked up and taken directly to my customer. I invoice my customer for them.

 

Because of this, I never actually carry the individual cuts as inventory. The inventory units are the pigs themselves; they're converted into cuts at the butcher.

 

So even though I'm billing my customer for the cuts (because they buy by the cut), I never have the cuts themselves as inventory. I would like to be able to track this conversion (Inventory=Pig to Invoice=Cuts).


Hello @498399,

 

As of the moment, tracking your items with the unit of measure is only available for the following products listed below:

  • QuickBooks Accountant
  • QuickBooks Premier Contractor
  • QuickBooks Enterprise Solutions

If you're not using these products, you may want to consider manually tracking your inventory items.

 

That being said, you'll need to create two sets of items, one for the inventory (pigs) and the other is for the invoice transaction (cuts). Since you're not tracking the quantity of the meat for invoices, you can consider it as a non-inventory item.

 

Further, you'll have to manually adjust the quantity of your items upon creating every transaction. Once the inventory (pigs) has been processed as meat and ready to be sold, it'll remove an item on the total quantity of your inventory.

 

To illustrate:

  • Raising a pig = additional count of your inventory
  • Invoice for your customer = removes an item of your inventory even though you're selling only the meat

I've got you this helpful article to learn more about how you can manually track the quantity of your inventory: Set up Advanced Inventory.

 

If there's anything else that I can help you with, please let me know in the comment section down below. I'm always around happy to help.

1 reply

A
Anonymous
January 2, 2020

I'm sorry. I realize that I misstated livestock as fixed assets. They are not; they are inventory assets unless they are for breeding.

MaryLurleenM
MaryLurleenM
January 2, 2020

We're unable to determine which account you need to use, PVOLLC.

 

If you're not sure on what account to use, I recommend reaching out to your accountant. The will be able to help you on that.

 

As for the individual cuts for sale, you can add them as a regular item. Here's how:

  1. Click Lists from the menu.
  2. Select Item List.
  3. On the Item List window, click Item then New.
  4. Select the type of item you want to create.
  5. Fill in the item fields.
  6. Click OK to save.

We can only guide you through setting up inventory items and accounts. Reach out to your accountant to make sure you're using the right account.

 

Here are some articles that can help:

I'll be around if you have more questions. Don't hesitate to leave a reply.

A
Anonymous
January 3, 2020

I'm sorry, I thought I clarified but my post was pretty jumbled. I don't need you to tell me what kind of account I need to assign to various things. Let me ask it this way...

 

I know that livestock for sale are Inventory Assets. How do I link my sales of individual cuts to the Inventory Asset account I have for my livestock?

 

For example, say I buy 10 pigs. I enter them into QuickBooks as Inventory Assets. I then take one pig to market and have it processed into individual cuts of meat. I then sell those cuts of meat to a customer. How do I set up QuickBooks so that both my COGS for the individual cuts and my income for the individual cuts properly debit the Inventory Asset account?

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