Inventory breakdown by business entity: how to allocate remaining stock between a sole proprietor and an LLC

In retail, it is very common for several legal entities or entrepreneurs to operate within the same physical store. For example, an LLC sells excisable goods (alcohol, tobacco), while a Sole Proprietorship sells food products, or two business partners share the same assortment and retail space while using one checkout. 

Mixing such goods in inventory records can lead to stock discrepancies, incorrect tax calculations, and penalties from regulatory authorities. 

To solve this problem, Torgsoft has developed the stock accounting by company mode. Entrepreneurs who need this type of separation most often ask technical support specialists the following questions: "How can I configure the software so that the cashier does not accidentally sell goods belonging to one Sole Proprietorship on behalf of another in the same receipt?", "How should an inventory count be carried out if the goods are physically stored on the same shelf but belong to different legal entities?", "What should be done with the cost of goods if one Sole Proprietorship purchased the product at a higher price and another at a lower price?", and "How should invoices be issued to wholesale customers if an order contains goods from different companies?".

Below, we will explain in detail how the «Stock by Companies» mode works at every stage of goods movement and answer these questions.

How the «Stock by Companies» mode works and how to enable it

The essence of this mode is that the system maintains a static stock status with each unit of goods clearly assigned to a specific company. A separate «Company» column appears in the stock status, showing exactly which company owns the goods.

To enable this mode, go to Settings - Parameters - Document. Activate the «Company selection is mandatory for warehouse and financial documents» parameter and enable the «Maintain stock by companies» subsetting.

 Important: this mode is incompatible with the old setting «Link product type to company and split sales by company». Transition stage: after activating the setting, the software will warn you that the stock status must be recalculated and control points must be deleted. To start working correctly, you will need to conduct an inventory count: first write off (zero out) the goods recorded as «without a company», and then receive the actual stock balances under the specific Sole Proprietorship or LLC.

Selling goods: how not to mix up Sole Proprietorships at the checkout

The main question is how to avoid selling goods belonging to one company on behalf of another. The «Stock by Companies» mode solves this automatically. When a product is added in Sales mode (for example, by scanning a barcode), the system analyzes the stock balances. If a product with this barcode has a positive balance for only one company, it is added to the receipt automatically. If the same product is simultaneously recorded under several Sole Proprietorships, the software will stop and require the cashier to manually select which company’s stock the sale should be made from.

What happens when a mixed receipt is paid?

If a customer brings a basket to the checkout containing goods from both a Sole Proprietorship and an LLC, the cashier adds all items to a single sales form in the software. During payment, Torgsoft creates separate sales documents and separate fiscal receipts for each company. When the «Pay» button is clicked, Torgsoft automatically splits this sale into several independent documents according to the number of companies whose goods are included in the receipt. As a result, separate correct fiscal receipts are printed on the software ECR or fiscal registrar for each company. Payment amounts, whether paid in cash or by card, are distributed proportionally between these receipts.

Sales with invoice issuance for wholesale customers

Entrepreneurs often ask how to issue invoices to wholesale customers if an order contains goods from different companies within the business network. Torgsoft is flexibly adapted to this business process:

1. Commercial offer. You can create a single commercial offer for the customer and add goods from the warehouses of different companies. The table will clearly display a company column for each product.

2. Creating an invoice. When the customer agrees to the deal and you click «Create invoice» from the commercial offer, the software automatically generates as many separate invoices as there are unique companies in the order. This is logical because non-cash payments must be credited to different settlement accounts (IBANs) belonging to different individuals/legal entities.

3. Delivery note. Goods can be added to a delivery note or invoice strictly only from the company to which that document belongs.

Internal transfers, write-offs, and assembly

Strict accounting requires that goods are not lost during internal operations.

• Internal transfer. You can add goods from different companies to an internal transfer document only if it is inactive (deferred) and no sending company has been specified. As soon as you change this document to active status, Torgsoft will warn you and automatically split one document into several separate transfers — strictly by company.

• Write-off. Goods can be written off from stock only on behalf of the company specified in the write-off document. The software simply will not display goods belonging to other Sole Proprietorships for write-off.

• Customer return. If a customer returns a product, the return document automatically specifies the company from which the original sale was made or the delivery note was issued, so that the balance is not disrupted.

• Assembly. When creating kits or disassembling them, a field for specifying the company is mandatory. If you disassemble a product, its components will be received into stock under the same company that owned the original kit.

Inventory count: controlling stock on the same shelf

Answering the question «how should an inventory count be carried out?»: in newer versions of Torgsoft, a mandatory «Company» field appears when creating an Inventory Statement. Even if the goods are physically mixed on the same shelf, the inventory count is performed strictly for the selected company.

The current (accounting) quantity of goods in stock is taken by the software specifically for the company indicated in the statement parameters. This prevents a situation where a surplus belonging to a Sole Proprietorship accidentally offsets a shortage belonging to an LLC.

Independent cost calculation

One of the most important financial questions is what to do with the cost of goods if the purchase prices for Sole Proprietorship 1 and Sole Proprietorship 2 are different. 

When stock accounting by company is enabled and the «By supply batches» or «By supply batches including internal transfers» cost calculation methods are used, Torgsoft performs cost calculations separately in parallel. Each company will have its own cost calculated for the same product. This means that profit in financial analysis for the LLC will be calculated using its purchase prices, while profit for the Sole Proprietorship will be calculated using its own purchase prices, ensuring accurate management accounting without mixing financial flows.