Posting Invoices to the General Ledger Using Softbase Evolution

Scenario Overview:

When posting an invoice in Softbase Evolution, the system will record both the revenue generated and the costs associated with providing labor and parts. This help file outlines how an invoice is posted to the General Ledger (GL) under GAAP principles, using a labor inventory account for tracking labor costs.

Example:

• Technician Labor:
  • Technician: Mike the Mechanic
  • Labor Cost: $40.00
  • Labor Sell Rate: $110.00
• Part Sold:
  • Part Number: X123
  • Part Cost: $10.00
  • Part Sell Rate: $15.00

General Ledger Accounts:

• A/R (Accounts Receivable): 1200
• Revenue – Labor: 4000
• Revenue – Parts: 4100
• Cost of Goods Sold – Labor: 5000
• Cost of Goods Sold – Parts: 5100
• Inventory: 1300
• Labor Inventory: 1350

Journal Entries:

1. Record the Revenue (Sales):

   • Debit A/R (1200): $125.00
     • (This represents the total amount receivable from the customer, including labor and parts.)
   • Credit Revenue – Labor (4000): $110.00
     • (This records the income generated from the labor performed.)
   • Credit Revenue – Parts (4100): $15.00
     • (This records the income generated from the sale of the part.)

2. Record the Cost of Sales (COGS) and Adjust Labor Inventory:

   • Debit Cost of Goods Sold – Labor (5000): $40.00
     • (This records the cost of the labor provided.)
   • Credit Labor Inventory (1350): $40.00
     • (This reduces the labor inventory by the cost of the labor used.)

3. Record the Cost of Sales (COGS) and Adjust Parts Inventory:

   • Debit Cost of Goods Sold – Parts (5100): $10.00
     • (This records the cost of the part sold.)
   • Credit Inventory (1300): $10.00
     • (This reduces the inventory by the cost of the part sold.)