Katana supports detailed record-keeping of stock movements for accounting purposes, ensuring inventory and financial data alignment. This guide explains how to integrate stock data from Katana into accounting software, covering scenarios like immediate expense recording and periodical stock adjustments.
This integration is crucial for maintaining accurate financial records and complying with accounting standards.
Alert: If you've integrated with QuickBooks Online, you don't have to record journal entries, instead, this can all be handled automatically if you've configured the integration. Learn more.
Purpose
Katana provides detailed stock movement data that you can use to create accurate accounting records and ensure your inventory values match your financial statements.
You can either:
Don't track stock in your accounting software and rely solely on Katana, or
Periodically record journal entries in accounting software using Katana data.
Choosing your approach
Before starting, consider your local accounting rules and reporting needs.
Tip: If accounting rules don’t require stock tracking, you may skip stock entries in accounting and use Katana as your sole stock record.
Approach #1 – Don’t track stock in accounting
If allowed by local accounting principles:
Use Katana to manage product and material stock levels.
In accounting, only record sales and expenses as they occur.
Pros:
Always have real-time stock status in Katana.
No duplicate data entry.
Cons:
Not compliant if stock tracking is required locally.
Approach #2 – Periodically record journal entries in accounting
If you must track stock in accounting, create manual journal entries based on Katana data. If using QuickBooks Online, configure the integration to do this automatically.
Frequency: Weekly, monthly, quarterly, or annually.
Below is an example monthly workflow when COGS is tracked in your income statement.
Step 1 – Add purchased items to stock
If purchased items were recorded directly as expenses:
In Katana: Identify the total purchased item value for the month.
In accounting:
Increase Stock (asset).
Decrease Material Expenses by the same amount.
Step 2 – Convert materials to finished products
If using separate accounts for materials and finished products:
In Katana:
Go to Make screen > Schedule tab > Done table.
Filter by Done date = last month.
Find Materials cost for those MOs.
In accounting:
Decrease Material Stock by that cost.
Increase Finished Product Stock by the same amount.
Skip this step if using a single stock account.
Step 3 – Add operations costs to finished product stock
In Katana: In the same Done MOs view, find the Operations cost.
In accounting:
Decrease Salary Costs (income statement).
Increase Finished Product Stock (balance sheet).
Step 4 – Record sold finished products as COGS
In Katana:
Go to Sell screen > Sales orders tab > Done table.
Filter by Picked date = last month.
Find COGS for those orders.
In accounting:
Decrease Finished Product Stock.
Increase Cost of Sales.
Step 5 – Record Stock Adjustments
In Katana:
Go to Stock screen > Stock adjustments tab.
Filter by Adjusted date = last month.
Find Value for adjustments.
In accounting:
Adjust stock levels.
Record the related cost or income.
Special case – Using subassemblies
If you track subassemblies in a separate account:
Convert materials to subassemblies
In Katana, filter Done MOs for subassemblies.
Find Materials cost.
In accounting: Decrease Material Stock, increase Subassembly Stock.
Add operations costs to subassemblies
Find Operations cost in Katana.
Decrease Salary costs, increase Subassembly stock.
Convert subassemblies to finished products
In Katana, find total Materials cost for finished goods.
Subtract materials cost already counted in subassemblies (to avoid double counting).
In accounting:
Convert materials to finished goods.
Convert subassemblies to finished goods using subassembly cost.
Tip: Use clear product names or MO numbers for subassemblies to make filtering easier.
Result: Following this process ensures your accounting records reflect accurate stock levels and COGS, fully aligned with Katana’s data.
Your feedback is invaluable. Let us know your thoughts on this article or anything in Katana you'd like to see improved: [email protected]