“General Business Settings” can be found through “Tools,” “Program Options,” “Business & Financial Settings,” and “General Business Settings.”
These fields define some of the basic information about your business.
General
Fiscal Month – The first month in your business’s fiscal year. This is used as the default starting month for Month-End Reports.
Starting Cash in Registers – This field is used to indicate the typical opening cash total for all registers in the store. You can choose to close out all registers together (or just close a single register). This number will appear in the Cash Counter screen as part of the End of Day processing. This number is a default and can be changed on a daily basis during the End of Day processing, in the Cash Counter screen itself.
Business Days of Week – This field is used to calculate due dates for promised work (custom orders) and rentals (if licensed). Enter a number representing each day of the week that the store is open. The number 1 represents Sunday, and 7 represents Saturday. Therefore, if a store is open from Monday through Saturday, but closed on Thursdays, the numbers 23467 should be entered.
Shipping Days – This field is similar to Business Days, except this lists the days of week for which normal outgoing shipping can be done. Currently, this is only used in the Deluxe Edition to determine rental due dates for shipped rental items.
Currency Name (Singular) – Type in the name of the currency you use. This will be used in reports and other areas of the program.
Currency Name (Plural) – Type in the plural name for the currency that you use. This will be used in reports and other areas of the program.
Round Employee Time clock Time to Nearest Multiple of – Enter the number of minutes to round times to for each employee. Use 0 for no rounding.
Cost Settings
Cost Accounting Method – This choice will affect the amount of money you make on paper and therefore may affect your taxes. It is best to pick a method that is best for you and not to switch methods mid-stream. The IRS may have special regulations concerning switching costing methods. Please check with your accountant for assistance.
Note – When you change to a different costing method, it only affects new sales after that point.
With any of the costing methods, your total cost of goods sold after selling all your inventory would be the same, and identical to the total actual purchase cost of that inventory (unless any merchandise is destroyed or otherwise taken out of inventory without being sold, which are reported separately). The difference is in the order in which costs are applied to sales. All three methods conform to standard accounting practices, and are all just conventions, since there’s no way to know which actual physical units are sold in which order (unless you use serial numbers, in which case, the actual costs override the costing method, except for the average costing method).
FIFO
Many retail businesses choose the FIFO accounting method simply because it most closely matches what’s going on in the real world. In essence, you are selling the oldest item in your store first, before you sell newer stock. Many stores do this in practice to keep items on the shelf from getting too old.
FIFO (First In, First Out) applies costs by assuming that you sell the items you purchased first before you sell the more recently purchased items. For example, if you purchased 20 items at $1.00, and then the next month you paid $1.25 for the next 20 items, then your total cost would be (20 x $1.00) + (20 x $1.25) = $45.00. So, your cost after you sold the first 21 items would be 20.00 + $1.25 = $21.25.
Note – If you do not know which method to choose, and you do not have an accountant to consult, choose FIFO.
LIFO (scheduled for Artisan version 4.6)
Some businesses choose the LIFO accounting method for potential tax advantages. This method most likely is the exact opposite of what you are doing in the real world. On paper, you are selling the newest items in your store first, before you sell older stock. During the first years, this would raise your COGS compared to the FIFO method.
LIFO (Last In, First Out) applies costs by assuming that you sell the items you purchased last (most recently) before you sell the older items. For example, if you purchased 20 items at $1.00, and then the next month you paid $1.25 for the next 20 items, then your total cost would be (20 x $1.00) + (20 x $1.25) = $45.00 (the same total as in FIFO). So, your cost after you sold the first 21 items would be 25.00 + 1.00 = $26.001. Wow, that’s quite a difference in just a few items purchased. Imagine that on the larger scale of your entire store! But higher cost means lower taxes (though lower profit) for the same revenue.
Average Costing (scheduled for Artisan version 4.6)
Some businesses choose the Average Costing method because it is a compromise between FIFO and LIFO. With Average Cost accounting, the cost for each sale is based on the then-current average cost for the item. The Average Cost is a moving average of the purchase costs of all units in stock.
For example, if you purchased 20 items at $1.00, and then the next month you paid $1.25 for the next 20 items, then your total cost would be (20 x $1.00) + (20 x $1.25) = $45.00 (the same total as in FIFO & LIFO). If you sold 5 of these items before you purchased the second batch of 20, the resulting average cost would be $1.14 [computed as (15 x $1.00 + 20 x $1.25) / 35]. Average cost is recomputed each time you receive inventory (or add to inventory w/o receiving), by multiplying the current average cost by the remaining quantity on hand, then adding the total cost of the new items (new cost times the number of new units), all divided by the new total quantity on hand. Fortunately, Artisan does all this math for you!
In this example, your total COGS after selling the first 21 items would be $23.24. That’s 5 x $1.00 + 16 x $1.14 = $23.24. As you can see, this number is in between the FIFO and LIFO costs of $20.00 and $26.00.
This calculation assumes both purchases were made before any sales; otherwise, the LIFO cost would be somewhat less.
Auto-Corrected Zero Costs?
Select “Yes” to change any received costs of zero without a PO to an item’s Standard Cost.
Cost Code Key
This optional feature allows you to encode item costs as a string of letters to print on merchandise item labels and/or Day-End reports. This lets you see costs while hiding them from customers and/or staff. If you leave this field blank, costs will not print on item labels.
If you use it, the code key must be a string of ten (10) letters, all different. These letters will be substituted for each digit, ‘1’ – ‘9’ and then ‘0’. For example, with a code key of “NEWYORKCIT”, a cost of $205.99 would be coded as “ETO.II.” To print coded costs on item labels, include a “[COST]” field in the label form definition file. This will be substituted with the item cost, rounded to the nearest whole number, then encoded as above; e.g., “ETR”. (The lack of the decimal point makes it less obvious that the code is related to money.)
Showing costs on screen is controlled by the security settings for viewing costs.
Show Costs to 3 Decimal Places
“Yes” to allow cost amounts to 3 decimal places (instead of 2).
Shipping Cost Distribution
Don’t Distribute Shipping Costs – Leave Shipping Cost out of Cost of Inventory; account for it separately.
Distribute Evenly to All Units – Shipping cost is divided evenly among all units on a Vendor Invoice.
Distribute Proportionally By Cost – Each unit on a Vendor Invoice gets a proportion based on that unit’s purchase cost.
Customer Deposits
Minimum Layaway Deposit – Enter the minimum amount that is normally charged as a deposit when processing a layaway. This can be entered either as a percent of the total purchase, or as a fixed dollar amount that will apply to all purchases. To enter a percent, type the number. To enter a dollar amount, type the number, using the decimal. To change back to a percent, type the number followed by the percent sign (%). Even though you specify a minimum amount, this can be overridden at the time of sale, with sufficient authorization. The deposit amount will be computed from the subtotal without sales tax, unless the minimum deposit amount is 100%.
Minimum Order Deposit – Similar to Layaway Deposit. Enter the minimum amount or percentage to be charged as a deposit when processing a special order or custom order.
Rental Reservation Deposit – Similar to Layaway Deposit. Enter the minimum amount or percentage to be charged as a deposit for a rental reservation (Artisan version 4.6).
Rental Reservations
Rentals are scheduled for the 4.6 version release of Artisan.
Always Reserve – Select “Yes” to always assume that rental items on a sale will be a reservation instead of an immediate delivery.
Pre-Booking Days – Enter the number of days of preparation or travel time reserved rental items are unavailable before event date.
Check for Overbooking in Register? – Select “Yes” to view a list of all potential conflicts in upcoming rental reservations in the Sales Screen.
Post-Booking Days – Enter the number of days reserved rental items are unavailable after the return date, for restocking or refilling.