[ahar3]

Looking for a way to record Internal Sales.
The wholesale business is selling to the retail business at a profit who in turn is selling to the consumer. How do I show Profits, Inventory movements and COGS without overstating or understating my consolidated accounts. Inventory is only recorded at the Wholesale business. Stock received at the retail shop is recorded as COGS. Any suggestions are very much appreciated. Thanks.

[MaggieMouse]

Wholesale Sales revenue should be the same as inventory purchased in Retail. They should cancel each other in your consolidation. Then you will have wholesale COGS and retail revenue to get the profit.

[ahar3]

Hi MaggieMouse,

Many thanks for your reply. But... the way I look at this is, yes financially they may cancel each other out but if I record sales in Wholesale and in retail I effectively overstate my total sales when reporting.

[ahar3]

For anyone who might be interrested. Having done some more research on this. There is no easy solution to split profits. Profits can only be recorded by one or the other as it is directly related to COGS. My solution is to do a stock transfer via a negative purchase order from the wholesale to the retail and record cogs and profit on the retail level.
Note Inter company sales are different to internal sales, what I have been trying to do.

[MaggieMouse]

You can do a stock transfer, but shouldn't do a negative purchase order on the wholesale side since that's what not to do for a negative PO.