Author Topic: Tracking Accountancy figures  (Read 903 times)

0 Members and 1 Guest are viewing this topic.

Ri_Ha

  • Newbie
  • *
  • Posts: 39
    • View Profile
  • Liked: 1
  • Likes Given: 1
Tracking Accountancy figures
« on: February 23, 2017, 08:18:07 AM »
Hello,

I was looking to see what people do with tracking costs for materials that may change from month to month.

Because I'm small scale I can't realistically pay out for massive rolls of webbing so I try to take advantage of smaller discounts depending on how much I need.

If I record on a spreadsheet it's say 1$ a metre in Jan. But maybe more in Feb say $1.50. How do I make sure I'm able to keep a track of the difference in prices but keep the historical prices correct?

I'm hoping that makes sense....

Good to get a view or an idea from others.
Morion Thread Works

essal

  • Global Moderator
  • Hero Member
  • *****
  • Posts: 548
    • View Profile
    • Nora Tactical
  • Liked: 93
  • Likes Given: 48
Re: Tracking Accountancy figures
« Reply #1 on: February 23, 2017, 10:02:54 AM »
If I were you, I'd use a material calculator. I'm pretty sure mine and some other peoples calculators are available here somewhere.

So if you paid $5/yard on your order in January, then you put $5/yard into the calculator and it will put out what a every single piece of Cordura costs you when you paid $5/yard. Use this number for every project you make with this batch of fabric, no matter if it's in January or December 2 years from now.
When you pay $8/yard for your next order, change it to $8/yard. It's pretty simple in my head.,
If you a bunch of different fabrics that you paid various prices for, then you can A) Keep it noted the calculator and change it according to your use or B) Charge a set (highest) price/yard for solid colors and one price for camos, or even just a flat rate for fabric to keep it simple.

As an example, in my calculator CB 500d costs 120 NOK/yard ($14.4 with todays currency) and MC 500d costs 160 NOK/yard ($19.2). A 15x20" piece in CB costs 16,7 NOK ($2) while MC is 22,2 NOK ($2.65). So a pretty obvious change in price/yard doesn't really make or break the material cost for a piece of fabric.

Did this make any sense?

My advice is also to buy in bulk, especially items you order frequently. A roll (100 yards) of 1" webbing from a quality manufacturer is often cheaper than 25 yards from a by-the-yard shop. Sure you need to fork up some more money up front, but over time you will save tons of money as well as your customers time if they have to wait for every single item to be ordered.
Nora Tactical
Product Technician - Norrøna

Ri_Ha

  • Newbie
  • *
  • Posts: 39
    • View Profile
  • Liked: 1
  • Likes Given: 1
Re: Tracking Accountancy figures
« Reply #2 on: February 24, 2017, 02:42:52 AM »
Yeah I think makes sense. Maybe I'm over complicating it for myself as your sums suggest not a huge difference.

And your also correct about bulk buying, I'm definetly looking into buying rolls of frequently used materials rather than bits and pieces as I know there is savings to be made here.

Thanks for your help! 
Morion Thread Works

Gear Dynamics

  • Global Moderator
  • Hero Member
  • *****
  • Posts: 1053
    • View Profile
    • Gear Dynamics
  • Liked: 269
  • Likes Given: 265
Re: Tracking Accountancy figures
« Reply #3 on: February 24, 2017, 10:34:41 AM »
I see this as two separate issues. One is inventory valuation and the other is product pricing. You need to hammer out one, to really get the other.

For inventory, you need to decide on an accounting rule to use to valuate everything. Most use FIFO (First In, First Out). This is very simple to do, and requires you to spreadsheet out all of your inventory and note the cost of each item AND the date it was entered. You'll need to determine what units make the most sense for tracking each type of material. For example, I track Cordura by the yard, webbing by the yard, PSA by the foot, cordage by the foot, buckles per piece etc. Each of those things has a cost assigned to it, based on exactly how much money it took to get that item to your hands. If you add a new roll of webbing, you simply make a new line in the spreadsheet and calculate a new cost per yard for that item. Any of the older webbing of the same type, stays at the original cost. At the end of the year, everything gets measured, weighed and counted to determine what is left, and the older materials (First In), get expensed first. Once you lay all that out, you are in a better position to determine your pricing.

Using the values above, for each type of material, I calculate how much it takes to build each type of product and I use that (along with labour, ancillary costs and profit) to design a retail price that makes sense. I recommend accounting for left over material and pricing that into each product. For example, if you can make a Utility pouch using one 8" (x60") cut of Corudra and you are left with some material at the end, that material is treated as "consumed" for that product, so the cost of the Cordura for that one pouch would be 8" by the full 60" off the roll. Does that make sense? If you get into trying to calculate miscellaneous cuts of material, you will wind up over valuating your inventory. That left over piece doesn't get tossed, but set aside into bins, to possibly be used for other builds, or prototyping.
« Last Edit: March 01, 2017, 02:21:38 PM by Gear Dynamics »

Ri_Ha

  • Newbie
  • *
  • Posts: 39
    • View Profile
  • Liked: 1
  • Likes Given: 1
Re: Tracking Accountancy figures
« Reply #4 on: March 01, 2017, 01:09:11 PM »
Hello, yes makes sense GD. Thanks for your input, it's much appreciated.
Morion Thread Works