CMA and RMA

This section describes two accounting methods used in the system. 

Retail Accounting Method

A method by which a business can maintain and account for the value of its inventory. (For another method, see “Cost Accounting Method”.) In the Retail Accounting Method, inventory is kept at its retail value. As items are added to inventory, they are marked up to reflect their retail price and the value of the inventory increases by that amount. As items are sold, the value of the inventory falls by an amount equal to the retail price of the items sold. Within your franchise, store merchandise is maintained by this method.

Cost Accounting Method

A method by which a business can maintain and account for the value of its inventory. In this method, inventory is kept at its direct cost. As items are added to inventory, the value of the inventory rises by an amount equal to the cost of the additions. As items are removed from inventory by sales, the value of the inventory falls by an amount equal to the cost of the items sold.

With this method, merchandise additions are made at cost value and no retail value. They are extended to a retail value as the other store products. Retail value is added to the retail book inventory via price change after the item is sold. The retail value is determined by the related department sales from the closing register tape.

The purpose of CMA on Inventory is to identify the income for the items that are included in departments and categories set up as ingredient method of accounting, and to calculate the profit margin by department and category they are included into.

To have a correct reflection on your income and profit margin for the items set up in departments with matched categories that use the ingredient method of accounting option, follow the steps:

1. Create a new category and select the ingredient method of accounting option for it:
1. Go to Price Book > Categories.
2. At the top of the Categories form, click Add New.
3. In the Category Name field, enter the name.
4. Select the Ingredient Method of Accounting check box.
5. At the top of the form, click Save.
2. Create a department with the same name and as the matched category:
1. Go to Price Book > CR Departments.
2. At the top of the CR Departments form, click Add New.
3. In the Name field, enter the department name.
4. In the Matched Category list, select the category that matches the department.
5. Select the Ingredient Method of Accounting check box.
6. At the top of the form, click Save.
3. Add items to the category and department by adding the category and department for the items on the invoice they are coming in the system through or at Price Book > Item Setup form.

   All items included in this category and department have to comply with the Ingredient Method of Accounting option to be calculated properly in the Inventory report. In other words, all the items that have a cost mustn't have any retail price, and all the items with retail mustn't have cost set.

4. Create items with parent-child relationship using the following example. If you receive the parent by cost through your invoices, you have to divide the quantity by UPC or PLU when you create those items.

1. In CStoreOffice®, go to Inventory > Counts.
2. In the left menu, select Itemized Inventory.
3. At the top right of the form, click Conduct Inventory.
4. From the Choose ticket type list, select Ingredient Method of Accounting.
5. Select the category for which you want to create the ticket.
6. At the top right of the form, click Generate.

You can see the way the Ingredient Method of Accounting by category works the next day after your second day of the second inventory is done.