Accounting for Sales in Brightpearl Video Lecture | Using Brightpearl:Sales Order Processing - E-Commerce

in this video I'm going to show you the
accounting transactions that happen when
you press the sales orders and goods out
notes in Brightpearl now cost of sales
accounting is switched on and I'll show
you what that means in the video first
of all let's have a look at this product
we have here we've got one in stock of
the snowboard helmet and we're looking
in the product to have a look at prices
and nominal codes so the retail price
for this particular helmet is a hundred
dollars to make things a little simpler
it's not going to be taxable and the
important things to look at are the
sales nominal code and the purchase
nominal code so the sales nominal code
is where your revenue is recorded
against and this will appear on your
profit and loss report and likewise when
the goods are shipped your asset is
reduced and your purchases or the cost
of sale will increase that it's
important to note that the cost of sale
only goes on when you ship the goods and
I'll show you that in a second okay so
now let's create a sale let's go sales a
new quote search for a customer click
their name will create my new sale let's
search for this item the helmet and here
we can see that it's one item at a
hundred dollars it's also bringing in
the products nominal code so 4020 sales
of sports equipment and save changes so
far no accounting transactions have been
made the first thing that's going to
create accounting transactions is to
raise an invoice so if I click invoice
and okay it'll automatically invoice
this sale doesn't send it to the
customer unless they've got an email
address and we've now seen that it's
been marked as invoiced okay so now
let's have a look at our balance sheet
we've got some stock or some inventory
fifty dollars and we've invoiced the
customer so the customer now owes us a
hundred for accounts receivable we can
see that in a little bit more detail on
the general ledger so this transaction
at the top is the accounts receivable
simply the invoice against the sale and
remember we've not actually shipped any
stock yet so all of that is going to be
profit looking at our profit and loss
report we'll see we've made a hundred
dollars profit
of sales and sports equipment so that
looks a little bit too rosy to be true
the next thing we need to do is actually
ship the goods on the sale so let's go
back to the sale from the recent sales
list open up the sale and what we need
to do is create a Goods out note or
fulfill this sale so let's go phil order
fulfill and ship later so creating a
Goods out note simply creates a document
that you can pick pack and ship again
this hasn't actually created any
accounting transactions yet but you can
see that we've got good snow number one
if I open this up we can see we can
print pick pack and ship it but it's the
ship stage that removes the items from
stock and creates the cost of sale
accounting transaction so let's do that
now click ship and it back fills the
other ones for you to now let's go back
and have a look at our profit and loss
report go reports profit and loss and we
can see what we still have a hundred on
the revenue we've now got fifty dollars
which is the cost price of that item
against the cost of sale code and again
for a bit more detail let's have a look
at the general ledger this top
transaction is the cost of sale journal
which is removing value from your asset
and adding value to the cost of sale so
the profit we make between those two is
going to be fifty dollars let's go back
to reports profit and loss and we can
see that the gross profit here is fifty
dollars going back to my product list
where we had one in stock if I search a
helmet we can now see that we've got
none so it's been removed from my
inventory as well so the final thing I
need to do is actually take payment from
this customer so if we go customers aged
debtors or accounts receivable we can
see that there's one contact in here who
owes us a hundred dollars this shows on
my balance sheet is aged debtors or
accounts receivable so let's take the
payment now on the right-hand side of
the screen click the little green Cash
icon choose a bank account
let's say they've paid us by our
automatic payment put a reference in
click pay in full and then allocate
payment that now records the funds in
our bank account and clears the debtors
or plays the accounts receivable which
we can see on the balance sheet as a
balance on our bank account now I've
just received a hundred from the
customer but there's only a balance of
50 on here I click that and I can see
the full detail of what's been going on
on the bank current account so there was
an earlier video where we had a purchase
payment against a supplier and I
thoroughly recommend you watch that
purchase accounting video too and then
the second sales receipt of a hundred
dollars which leaves the balance of 50
on the account you can also see that
from the list of bank accounts and we've
got 50 here on the bank current account
so let's review the key concepts first
of all you take an invoice hundred
dollars revenues recorded against the
4000 code the same hundred dollars is
recorded against the accounts receivable
or debtors and if you've got tax
transactions that will affect the
debtors amount so the second load of
accounting transactions is when you ship
the goods out note and only then do you
get the cost of sale this reduces your
asset so your balance sheet decreases
and increases the cost of sale so what
was previously a hundred percent profit
now drops because you've got a cost of
sale on the profit and loss and the last
thing to remember is that the fifty
dollars as the cost of sale comes from
the actual cost of inventory removed so
if your inventory varies in price then
it's the first priced paid is a
first-in-first-out methodology so that's
the summary of accounting for sales and
inventory