Inventory by business entity: how to separate stock between Sole Proprietorship and LLC

Several Sole Proprietorships or legal entities may operate simultaneously in one store or retail chain: each business entity purchases goods separately, makes sales, accepts payments, and uses its own ECR or pECR, while the product catalog is maintained in a single Torgsoft database. The «Maintain stock by business entity» mode separates the stock of the same product by owner without creating duplicate product cards.

Business owners usually ask specialists the following questions: how to switch to this mode, which business entity should own goods that were previously accounted for without a business entity, how to conduct an inventory count in a shared warehouse, whether a surplus belonging to one Sole Proprietorship can offset a shortage belonging to another, what the program creates after an inventory statement is closed, and how to check stock separately for each Sole Proprietorship and LLC afterward.

What stock accounting by business entity means

In standard stock accounting, Torgsoft shows how many units of a particular product are available at a specific accounting center. After enabling the «Maintain stock by business entity» setting, you can separate the quantity of the same product for each business entity.

For example, one warehouse contains 15 identical packages of a product with the same barcode:

• 9 units belong to a Sole Proprietorship;

• 6 units belong to an LLC.

In the overall view, this is 15 units. When viewed by business entity, Torgsoft maintains two separate stock balances. Goods receipts, sales, returns, write-offs, internal transfers, and inventory adjustments change the stock of the business entity specified in the document.

The mode solves three accounting tasks:

1. Maintains a single product catalog. There is no need to create separate «Sole Proprietorship product» and «LLC product» cards for the same product solely to separate stock.

2. Keeps ownership of goods separate. Stock belonging to one business entity does not increase the available stock of another.

3. Links stock operations to the business entity’s documents. Inventory adjustments, write-offs, and other stock movements are created for the business entity for which the operation was performed.

The «Business entity» field in the goods receipt document existed in Torgsoft before: it allowed documents and goods and cash balances with suppliers to be separated. Stock accounting by business entity works more strictly — it separates not only documents but also the current quantity of goods in stock.

How this mode differs from linking a product type to a business entity

Torgsoft has two different mechanisms that should not be confused:

• «Link product type to business entity and separate sales by it» — assigns an entire product group to a specific business entity;

• «Maintain stock by business entity» — tracks the actual quantity of each product separately for each business entity.

The first mechanism is suitable when product groups are clearly divided: for example, one company always sells alcohol, while another sells household goods. Stock accounting by business entity is required when the same product can simultaneously belong to different Sole Proprietorships or LLCs.

These settings implement different accounting models and should not be used simultaneously. Before switching, determine which model corresponds to the actual purchasing process and ownership of the goods.

When strict stock accounting is needed

This mode is appropriate when all of the following conditions apply:

• several business entities operate in one Torgsoft database;

• the business entities share the same product catalog or physically store goods in the same premises;

• each Sole Proprietorship or LLC separately records the purchase and sale of goods;

• you need to see not only the total quantity but also the owner of each part of the stock;

• sales, returns, write-offs, and inventory adjustments must be processed for the appropriate business entity.

If several business entities exist in the database only to print different company details, while ownership of the goods is not separated, the «Maintain stock by business entity» setting should not be enabled.

What to prepare before switching

Enabling the «Maintain stock by business entity» setting changes the way current stock is calculated. This is not a simple visual setting that should be enabled merely for testing in a live database.

Before switching, you need to:

1. Create an up-to-date backup of the database.

2. Check the business entity directory. The details, bank accounts, and other parameters used in documents must be filled in correctly for each Sole Proprietorship and LLC.

3. Check pECRs, ECRs, and cashless payments. Each ECR or pECR must be linked to the appropriate business entity, while bank accounts and bank terminal merchants must be configured for it.

4. Determine the transition date. By this date, unfinished stock operations should be completed, and a period should be agreed upon when sales and transfers will not interfere with the count.

5. Determine the owner of the actual stock. The source should be goods receipt invoices, supplier documents, transfer records, and other supporting documents. Torgsoft cannot independently determine which business entity owns physically identical goods.

6. Check critical scenarios. Before switching, it is advisable to test goods receipts, retail sales, returns, internal transfers, invoices, reservations, serial numbers, assembly, and production on a copy of the database if the business uses these operations.

How to enable stock accounting by business entity

The setting is located in the Settings → Parameters → Document menu.

You need to:

1. enable «Business entity selection is mandatory for stock and financial documents»;

2. enable «Maintain stock by business entity»;

3. perform the stock recalculation provided by the program.

After activation, the «Business entity» field becomes mandatory in documents that affect stock. If no business entity is specified, the program has no basis for determining whose stock should be increased or decreased.

How to distribute opening stock between a Sole Proprietorship and an LLC

The transition consists of two separate actions:

1. remove the old stock balance that was created without distribution by business entity;

2. set the opening quantity for each business entity.

Goods accounted for without a business entity

Documents created before the transition without a business entity cannot automatically become documents of a specific Sole Proprietorship or LLC. In strict accounting mode, such stock should not participate in the ordinary operations of business entities.

A separate transition procedure is provided for these goods: stock without a business entity is reduced to zero, after which the correct quantities are set for specific business entities.

This step should not be replaced with arbitrary backdated write-offs and goods receipts. Doing so may distort stock movements, cost, and settlements with suppliers.

Setting stock balances for each business entity

After the undistributed stock has been reduced to zero, separate inventory statements are created:

• for each accounting center;

• for each Sole Proprietorship or LLC (for each business entity);

• if necessary — separately by product group if the inventory count is organized in stages.

If a store has two business entities and three accounting centers, a complete transition may require up to six sets of statements: one separate statement for each «accounting center + business entity» combination.

The date of these statements effectively becomes the point from which the stock in the database corresponds to the distribution of goods between business entities.

How to conduct an inventory count by business entity

The statement is created in the Document → Inventory Statement menu for each accounting center (store) separately. When creating the inventory statement document, you need to specify the business entity for which the inventory count is being conducted.

One statement checks the stock of one business entity. If the same product belongs to a Sole Proprietorship and an LLC, its quantity is entered into two different statements. A joint physical count can be organized at the same time, but the results must be distributed by owner before being entered into the program.

Procedure:

1. create a statement for the selected accounting center and business entity;

2. add the goods that need to be checked;

3. count the actual quantity belonging specifically to this business entity;

4. enter or scan the result;

5. check items with shortages, surpluses, and zero actual quantity;

6. recount any questionable items;

7. close the statement after verification;

8. create and check the statements for the other business entities.

The current recorded quantity in such a statement is taken from the stock of the specified business entity. The total stock of other Sole Proprietorships and LLCs does not affect the result of this statement.

If identical goods are not physically separated

The same barcode does not contain information about the owner of a specific unit. If the packaging, models, and consumer properties are identical, an additional identifier should be used during the inventory count:

• batch or goods receipt document;

• serial number;

• a separate zone or storage location;

• internal labeling;

• a distribution register prepared in advance.

If it is objectively impossible to determine the owner, the responsible person must approve the distribution before the statements are closed. The program only records the decision made; it does not establish ownership of the goods.

Can goods be counted while sales are in progress?

Technically, inventory counting in Torgsoft provides different options for blocking goods. When switching to stock accounting by business entity, it is advisable to perform the count during a period without sales, goods receipts, or transfers.

If the store continues operating, record the time when the count starts and account for all operations performed afterward. Otherwise, the physical quantity and the stock status will refer to different points in time.

What happens after the statement is closed

After closing the statement, Torgsoft brings the recorded quantity in line with the actual quantity:

• a goods receipt document is created for a surplus;

• a write-off document is created for a shortage;

• both documents belong to the business entity specified in the statement.

Therefore, a surplus belonging to one business entity cannot automatically offset a shortage belonging to another. If a Sole Proprietorship has a surplus of two units of a product and an LLC has a shortage of two units, the program treats them as two separate discrepancies even if the total quantity in the store matches.

Before the final analysis, check the totals for goods receipts, write-offs, shortages, and stock discrepancies. If the statement totals need to be updated, use the «Recalculate totals» action.

Closing can only be canceled immediately after the statement has been processed and before any new stock movement has occurred for the goods. If sales, goods receipts, or transfers have already taken place after closing, it is better to create a new adjustment statement containing only the incorrect items.

How to verify that the distribution is correct

After the transition, you need to check not only the total quantity but also three levels of data:

1. Stock of each business entity. In the stock status form, enable the display by business entity and check the total quantity of goods for one of the business entities by using search to filter information for that specific business entity.

2. Total store stock. The sum of the stock balances of all business entities must equal the actual quantity of goods.

3. Documented origin. For selected goods, check the movement history: goods receipt, inventory adjustment, sale, return, and transfer must belong to the same business entity.

Also check:

• whether any goods remain in a positive quantity without a business entity;

• whether there are any negative stock balances for an individual Sole Proprietorship or LLC;

• whether the sum of the distributed stock differs from the total physical count;

• whether the cost was calculated correctly after the opening stock was created;

• whether the correct business entity is automatically selected in new stock documents;

• whether payments and fiscal receipts are created for the appropriate pECRs and accounts.

How the mode affects subsequent operations

Goods receipts and write-offs

The business entity is specified in the document. The product increases or decreases only that business entity’s stock. Goods belonging to another business entity cannot be written off using this document.

Internal transfer

An active internal transfer is processed for a specific business entity. An invalid or deferred invoice without a specified business entity may contain goods belonging to different business entities. When such a document is activated, Torgsoft splits it into separate transfers by business entity.

An internal transfer moves goods between accounting centers but does not change their owner. Transferring goods from one Sole Proprietorship to another is a separate business transaction and should not be disguised as an ordinary internal transfer.

Sale

If a product is available only in the stock of one business entity, Torgsoft can determine it automatically. If the same product is available for several business entities, you need to select whose goods are being sold when adding the item.

When one sales form contains goods belonging to different business entities, the program splits the operation into separate sales. If the pECR is configured correctly for each business entity, separate fiscal receipts are generated. The ability to work with several Sole Proprietorships or legal entities and automatically distribute sales is described on the official Torgsoft Software ECR page.

Customer return

The goods must be returned to the stock of the business entity from which they were sold. The business entity is determined from the original sale or delivery note. Arbitrarily changing the business entity during a return will distort stock balances and payments.

Invoices and commercial offers

A commercial offer may contain goods belonging to different business entities. When invoices are created, Torgsoft separates them by business entity. Goods from the stock of the business entity specified in the relevant document are added to the invoice or delivery note.

Assembly and disassembly

Assembly documents specify the business entity on whose behalf component write-offs and receipt of the finished set are created. During disassembly, the components are returned to the stock of the business entity that owned the set.

Cost

Cost is calculated taking the business entity and stock movements into account. If identical goods were received by different business entities at different purchase prices, their stock balances and financial results should not be mixed.

The specific algorithm depends on the cost calculation method selected in the database, so after the transition it should be recalculated and checked using several control items.

Frequently asked questions

Checklist after the transition

1. All business entities have been created and contain the correct details.

2. pECRs and ECRs are linked to the appropriate business entities; bank accounts and bank terminal merchants are configured for them.

3. Stock without a business entity has been reduced to zero.

4. Statements have been processed for each business entity at every accounting center.

5. The sum of the stock balances of the Sole Proprietorship and LLC equals the actual quantity of goods.

6. There are no unjustified negative stock balances for individual business entities.

7. Inventory goods receipts and write-offs have been checked.

8. Cost has been recalculated and selectively checked.

9. Test goods receipts, sales, returns, and internal transfers are processed for the correct business entity.

10. Mixed sales are correctly split into separate sales, payments, and fiscal receipts.