Accounting

  

A comprehensive guide to Solace Accounting — chart of accounts, customer/supplier accounts, journals and VAT, bank reconciliation, inventory trading, and manufacturing.

This article covers the Accounting application end to end. Company creation and user/salesperson administration are shared with Point of Sale and are covered separately in General Setup; POS-specific till and cashier operations are covered in POS. Companies that keep their books to the OHADA (SYSCOHADA) standard should also read OHADA Accounting.

Scope. This guide follows the menus of Main Screen → Control Panel / General Ledger / Customers / Suppliers / Inventory / Reports as they exist in the current version of the application. Screen names quoted below (e.g. “Financial Categories”, “Entry Types”) are the exact menu captions, so you can follow along inside the application.

Purpose and Scope

This guide walks a user through setting up and using Solace Accounting: building a chart of accounts, configuring customer and supplier accounts, capturing transactions through journals, reconciling the bank, trading in stock, and manufacturing finished goods from raw materials.

Setup order matters: financial categories and account types (§2) come first, since every ledger account depends on them; journal/entry-type setup (§6) comes before transactions can be captured; and inventory setup (§12) comes before stock items can be created and traded.

Chart of Accounts and Account Types

A chart of accounts (COA) is a complete listing of every account in the system. Solace Accounting lets you build your own list of accounts, or use a supplied template to speed up setup and avoid misconfiguration. Every account is linked to an account type and a financial category — understanding both is fundamental before creating or changing accounts, since they drive every financial report.

Account Type	Meaning
Balance Sheet Accounts	Track the money and values the business owns or owes — its assets and liabilities.
Income Statement Accounts	Record income and expenditure from trading activity. Income is what you receive for time, services, or the use of money (increases Assets/Equity). Expense is money spent on goods or services for immediate consumption (decreases Equity; decreases Assets if paid immediately, increases Liabilities if paid on credit).

Solace Accounting groups accounts into predefined Financial Categories to drive standard reports (Income Statement, Balance Sheet, etc.). The category list is fixed, but each category's description can be renamed to suit the business.

Code	Income Statement Category	Description
310	Sales	Principal income group of accounts, generally the main part of turnover in trading.
320	Cost of Sales	Also called Cost of Goods Sold — turnover generated in trading.
330	Other Income	Income outside of normal trading activities.
340	Expenses	Trading expenses.
355	Financial Income	Interest and other financial income, shown apart from ordinary income (used by the OHADA chart).
356	Financial Expenses	Interest and other financial charges, shown apart from ordinary expenses (used by the OHADA chart).
360	Tax	Trading tax charged.
370	Dividends	Shareholder distributions from the financial year's earnings.
380	HAO Income	Income outside ordinary activities (used by the OHADA chart).
385	HAO Expenses	Expenses outside ordinary activities (used by the OHADA chart).

Code 300 (Unallocated Income Statement) and 350 (Salary and Wage) also exist as system categories but aren't normally assigned to user accounts directly. Code 999 (Not on Financial Statements) is a system category for accounts that must stay out of the income statement and the profit calculation, such as the off-balance-sheet commitments of the OHADA chart. See OHADA Chart of Accounts.

Code	Balance Sheet Category	Description	Class
110	Share Capital	Shareholders' funds raised in exchange for shares.	Liability
120	Retained Income	Portion of net income not paid out as dividends, generally from previous years.	Liability
130	Shareholders Loans	Loans given to shareholders.	Liability
140	Long Term Borrowings	Loans repayable over more than a year.	Liability
150	Other Current Liabilities	Current liabilities not assigned to common categories (VAT, provisions, etc.).	Liability
160	Fixed Assets	Long-term tangible property, equipment or plant the business owns (also called noncurrent assets).	Asset
170	Investments	Assets or committed money that will generate income in future.	Asset
180	Other Fixed Assets	Intangible assets: patents, trademarks, copyrights.	Asset
190	Inventory	Raw materials, work-in-progress and finished goods ready for sale.	Asset
200	Accounts Receivable	Money owed to the business, generally by customers.	Asset
210	Bank	Cash on hand at bank and cash overdraft.	Asset
220	Other Current Assets	Non-cash assets convertible within a year: supplier/employee advances, petty cash, prepaid expenses.	Asset
230	Accounts Payable	Money owed to suppliers and other short-term debt obligations.	Liability
240	Taxation	Money owed to tax authorities.	Liability
250	Other Long-Term Liabilities	Other loans repayable over more than a year or financial cycle.	Liability

Code 100 (Unallocated Balance Sheet) also exists as a system category.

To print the Financial Categories report: Main Screen → Reports → General Ledger → double-click Financial Categories.

To edit financial category descriptions: Main Screen → Control Panel → Company Parameters → Financial Categories → edit the translate column → Apply.

Note. The category list itself can't be restructured — only its descriptions can be changed.

Managing Ledger Accounts

Task	Steps
Create a ledger account	Main Screen → General Ledger → double-click General Ledger (under General Maintenance) → select the financial category in the tree → New → enter code and description → on the Settings tab select the account type group and financial category → Save.
Edit a ledger account	Open the same screen → type the account code in the bottom-left box (auto-locates it in the tree and fills the edit boxes) → change details → Save.
Delete a ledger account	Open the same screen → locate the account as above → Delete.
Print the chart of accounts	Main Screen → Reports → General Ledger → double-click Chart of Account → fill in options → Print.

Notes. In the chart-of-accounts tree, Income Statement categories are shown in bold black and Balance Sheet categories in bold blue. An account with balances cannot be deleted, and cannot be moved between Income Statement and Balance Sheet classification.

Customer and Supplier Accounts

Customer and supplier account screens are almost identical and share the same layout.

To create a customer account: Main Screen → Customers → double-click Customers (under Accounts) → New (proposes a new account code, or type your own) → enter description and details.

Processing Tab

Controls how the account behaves in journals, documents and other transactions, grouped in five blocks:

Block	Field	Meaning
Transactions	Aging	Balance Forward links every payment to the oldest due amount; Open Item links each payment to a specific matching due amount.
Transactions	Currency	In multi-currency mode, the trading currency rate used for this account.
Documents	Printing	Default print mode used when a document for this account is completed.
Documents	Email Format	Format used when emailing documents to this account.
Tax	Mode	Default tax mode.
Tax	Tax Type	Default tax type used.
Tax	Tax Reference	Customer/supplier tax number — also printed on documents (invoice, credit note, etc.).
Others	Sales Person	Default salesperson attached to the account, used for commission (see the salespersons setup in General Setup).
Others	Card Number	Customer card number, used when the global card system is enabled.

Terms Tab

Sets early-payment and pricing terms. Terms themselves are created under Control Panel → Payment Terms.

Field	Meaning
Days Based Terms	Ages outstanding balances per day.
Monthly Based Terms	Ages balances by end of period.
Early Terms	A percentage discount and number of days within which the customer must pay to earn it (also called settlement/early-payment discount). Enter 00 to disable.
Normal Term	The period expected for the customer to settle the account, based on the days/monthly selection above.
Interest From	Whether and when Solace Accounting should charge interest on overdue amounts, in conjunction with Normal Term.

Why set terms. Payment terms are what let the system tell you when a customer is overdue — set the Normal Term (and Early Term if you offer a settlement discount) before relying on age-analysis reporting.

Also on the Entry tab: Price Regime (which of up to 10 price regimes applies by default to this account, overridable on document entry), Credit Limit (warns or blocks once the customer balance exceeds it), and Discount % (an invoice-level trade discount applied automatically, in addition to any line-item discount).

Sub-Accounts, Contacts and Notes

Tab	Purpose
Sub-Account	Creates sub-accounts under a customer/supplier (own Code, Surname/Name, Blocked flag, Card Number). Solace then shows the Statement Report and Age Analysis Report broken down by sub-account — useful for a company with branches.
Contacts	Attach, add, edit and delete contact persons for the account; also used to store extra addresses selectable on document entry.
Notes	Create dated, public or private notes against the account. Active notes appear in the Reminders list on the main screen, refreshed every few minutes.
Extra Details	Attach a picture/photo to the account, used for Point-of-Sale account lookup and verification.

To create a note: select the account first, then Notes tab → New → enter Subject, Start Date, End Date, Status and visibility (Public = all users see it; Private = only the creator) → type the note body → Save.

Using Categories in Solace Accounting

Categories refine report options and produce more detailed reports. Up to 10 category types are available, and the same process applies to customers, suppliers, ledger accounts and inventory items (illustrated here with inventory). For customer/supplier categories specifically, see Control Panel → Customers / Suppliers.

Task	Steps
Name the category types	Main Screen → Control Panel → Inventory (or Customer/Supplier) → Category Names → rename each → Apply.
Populate a category tree	Control Panel → Inventory (or Customer/Supplier) → double-click Inventory Category → select the category type on the left → select the tree root on the right → Add (inserts a blank “[...]” node) → click the ellipsis or press F2 and type the description. Repeat on the root for a sibling category, or on an existing category for a sub-category.
Attach an item to a category	On the inventory (or customer/supplier) editor, open the category drop-down → double-click to select the category → OK → Save.
Filter reports by category	Wherever a report's options list a category selector (e.g. Inventory Price List report), select the category to filter by.

Setting Up Journals and Entry Types

Solace Accounting is batch-driven: every transaction is entered in a batch, checked, then posted (saved permanently to the ledger). All financial transactions flow through journals, so every transaction can be traced in journal reports. Processing a journal via Entry Type means: set up the journal's options → capture the transaction lines → list/print for a hard-copy record → post to the ledger.

Solace Accounting enforces double-entry: every debit has an equal, opposite credit. You capture only one side of a transaction; Solace writes the balancing (contra) line automatically using the entry type's settings, and posts a balanced batch. Documents (invoices, purchases, etc.) are posted the same way behind the scenes.

To set up a normal (non-cashbook) journal: Main Screen → Control Panel → double-click Entry Types → Add, then configure:

Field	Meaning
Description	The entry type's name.
Cashbook	Whether this is a Cashbook (Payment/Receipt) or Non-Cashbook journal.
Debit/Credit	Default transaction type captured with this journal (overridable while entering transactions).
Account Access	Restricts/filters which accounts the lookup box offers in this journal.
Contra per Line	Adds a column allowing a different contra account per line, instead of one contra account for the whole batch.
Multi-Currency	Allows a non-local currency, defined in the next field.
Bank Account (Contra Account)	Default contra account for each new line. Disabled for cashbooks, since those get their contra account (the bank account) automatically.

Cashbook journals are automatic. There's no need to create a cashbook journal by hand: creating a bank account (financial category = Bank) automatically creates its Payment and Receipt cashbook journals, listed alongside your non-cashbook journals.

Entering and Posting Transactions

If you don't need stock control, most transactions are captured directly through Entry Types.

Prerequisites: a Sales Account and Customer Account exist (§4), and a Sales Journal is defined (§6).

To enter and post a transaction: Main Screen → General Ledger → Journals (Process block) → select the journal (e.g. Sales Journal) and press Enter to open a new batch → Settings to configure the batch:

Field	Meaning
Contra Account	Same as set when creating the journal; changeable here.
Consolidate Balances	Merge similar transactions (same account code and tax type) into one summed line.
Invoke Open Item	Automatically opens the Open Item screen whenever there's an outstanding amount to match, for matching invoices to customer payments.
Multi-Currency	Enable currencies other than the local one.
Link to Projects	Adds a project lookup column, linking transactions to a project.
Increment Reference	Increments the reference by 1 on each new line.
Repeat Details	Repeats the previous line's details on each new line.
Repeat Project Code	Repeats the previous line's project code (independent of Repeat Details).
Process Tax	Default “Do not use Tax”; any other setting adds a Tax Type column, with “Default to Inclusive/Exclusive Mode” controlling which amount column the cursor lands on first.
Default Tax Type	Default tax type per new line when tax processing is enabled (overridable).

Capture the line (e.g. Reference SAL00001, Date, Description, Tax type, Amount), then Post. The batch stays open and editable until posted; posting writes the contra line(s) automatically and closes the screen once the date and accounts pass company settings validation.

Ledger detail for a posted transaction: Reports → General Ledger → double-click Detailed Ledger → set the period to cover the transaction date → Print. Other useful reports: Entry Type Batches, Trial Balance, Tax.

Cashbook vs. non-cashbook VAT allocation differs. For an inclusive amount of 114 with standard VAT: in a cashbook journal (e.g. Petty Cash Payment), the inclusive amount is allocated to the contra account and balanced by the tax portion (Dr Stationery 100, Dr Tax Control 14, Cr Petty Cash 114). In a non-cashbook journal (e.g. Sales), the exclusive amount is allocated to the contra account instead (Dr Client 114, Cr Tax Control 14, Cr Sales 100). Because of this, a journal like Petty Cash should generally be a cashbook type so its VAT portion posts correctly.

VAT and the 100% Tax Type

The 100% tax type records the full amount to the Tax Control account and the full balance to the contra account. It covers cases like: VAT-only invoices on imported goods, a VAT-only invoice tied to goods already invoiced/paid, or a small tax-payable adjustment below the remittance threshold.

To create the 100% Tax Type: Control Panel → Company Parameters → Tax Processing → add “Tax Adjustment” with Rate% = 100 → Apply. Verify it under Reports → Tax → Tax Types.

There are three ways to journalize a 100% VAT amount:

Method	When to use it	How
1. Via a cashbook journal	VAT wasn't claimed at the time of purchase.	Open the Cash Book Payment journal → Settings → enable tax processing for the entry type (adds Exclusive/Inclusive columns). Enter one line: e.g. account = Cost of Sales, tax type = 100%, debit = 8300 (the VAT), and a second line: supplier account, no tax, debit = 570 (the net amount). Only the Dr lines are entered; Solace generates the Cr lines on posting.
2. Via a purchase (non-cashbook) journal	The contra account needs to be the expense account itself (e.g. Cost of Sales), since non-cashbook journals let you choose the contra account (unlike cashbooks, which always contra to the bank).	Enter: Cr Supplier with 100% Tax = 8300, Cr same Supplier no tax = 570. Only the Cr lines are entered; Solace generates the Dr lines on posting.
3. Via a purchase document	Preferred when the purchased goods must also update inventory/stock quantities.	On the Supplier Invoice entry screen, add a line of type “4 GL Account” using the Cost of Sales account, 100% tax type, price = 8300, quantity = 1, for the tax adjustment; add the goods as a normal stock line with no VAT.

Repeating Entries and Abbreviations

Repeating (recurring) journals let you capture a transaction once and reuse it every period. Main Screen → General Ledger → Recurring Journals → select the entry type → Enter to access the batch lines (the screen is titled “Recurring Batch”). To reuse a normal journal as a template: open it, reach the journal lines, Process → Copy Recurring and follow the assistant — the original recurring batch is kept in place for the next period.

Abbreviations auto-expand a short code into a full description while typing. General Ledger → Recurring Journals navigator → double-click Abbreviations → New → enter the Code, press Enter, enter the full Description → Save. Typing the code (e.g. “P”) in a description field and pressing Enter replaces it with the full text (e.g. “Payment thank you”).

Note. Abbreviation codes are case-sensitive (“P” ≠ “p”) and can be up to 3 characters long.

Opening Balances

Skip this step if the company is not brand-new. Otherwise, obtain the opening figures from the prior system's trial balance or balance sheet, and enter them via the General Journal — ideally one day before the current financial year starts, so expenses correctly roll into Retained Income at year start. Enter individual customer and supplier figures to their own accounts.

Set the journal's contra account to your suspense account, enter the trial balance, and post. List the journal before posting to check it, and use the Trial Balance / Balance Sheet reports afterward to confirm.

Retained Income can't be posted to directly. To bring in an opening Retained Income balance, post it through an income/expense account instead and let the system transfer the figure to Retained Income at year-end.

Related: Opening Balance template — a starting spreadsheet for gathering the trial balance figures before capturing them.

Recording a Loan and its Interest

Example. Retail T borrows R60,000 from us at 12.40% per annum, repaid over 5 years.

• Total interest: 60,000 × 0.124 × 5 = R37,200 (R7,440/year).
• Total repayable: 60,000 + 37,200 = R97,200, over 60 months = R1,620/month.
• Monthly split: principal = 60,000 / 60 = R1,000; interest = 37,200 / 60 = R620.

Each monthly payment is recorded against a liability account and an interest income account:

Debit	Credit
Loan Receivable (liability) R1,000	Customer Loan Account R1,620
Interest Income R620

Solace Accounting records the loan to the corresponding account automatically when the loan is created; each repayment is then matched against the loan transaction as an open item on the customer account, using the receive-loan-payment screen.

Bank Reconciliation

Bank reconciliation matches transactions captured through the cashbook journals against the bank statement, which typically includes items you didn't know about when capturing the cashbook (bank charges, interest, debit orders, direct deposits) — these must be captured in the cashbook journal to conclude the reconciliation. It confirms that your recorded transactions, the bank's transactions, and the bank statement itself all agree. The Solace-side closing balance is called the book balance (shown on the report as “balance according to Solace”); the bank's own closing figure is the bank balance.

Related: Bank Statement template.

To do the reconciliation: Main Screen → Cashbook → Process → double-click Bank Reconciliation → select the bank account and period → enter the Statement Balance from the bank statement → press Enter (or click the central white space) to load all unreconciled transactions.

The info panel shows:

Field	Meaning
Receipts Total	Total of all unreconciled receipts in the list.
Payments Total	Total of all unreconciled payments in the list.
Reconciled Total	Total of all reconciled transactions plus all currently unreconciled ones; shrinks toward Transaction Total as you reconcile.
Transaction Total	The current posted/ledger transaction total recorded by Solace Accounting.
Difference	Reconciled Total minus Transaction Total; reaches 0 once everything is reconciled.

To reconcile items, either:

• Search — choose Find by Reference or Find by Amount at the bottom, type the value, press Enter to locate and reconcile the matching transaction; or
• Scroll and tick — scroll the list and click the checkbox (or press Space) on each matching transaction.

Once every matching transaction is ticked, click Process to commit the work; uncommitted work is discarded if you leave without processing.

Tip. Clicking “Show Report” mid-work, or clicking Refresh, both commit the current work first (Refresh also reloads the transaction list) — use Refresh to bring in new transactions while reconciling.

If a difference remains after ticking everything, it's usually unrecorded bank charges/interest (enter them via the Payment/Receipt Cashbook) or an opening balance not yet entered via the General Journal (§10) — post that, then reprint the reconciliation report; the difference should now be zero.

Setting Up Inventory for Trading in Stock

Complete Module setup for company/user administration (General Setup) and journals (§6) before configuring inventory. Configure via Main Screen → Control Panel → double-click Inventory.

General Settings:

Setting	Effect when ticked
Multi Store	Enables multiple stores (otherwise the system uses a single store). Can be turned on later.
Cannot Sell Out of Stock	Blocks recording a sale when there's no stock; quantities can't go negative.
Warn When Out of Stock	Shows a warning when a stock item is about to go below zero.
Create New Item on Missing Code	Allows creating a new item code on the fly while capturing a transaction.
Warn if Preferred Supplier Not Used	Warns when a purchase uses a supplier outside the item's preferred supplier list.
Set Average Cost 0.00 When Zero on Hand	Resets an item's average cost to zero once its on-hand quantity reaches zero.
Sales Order Reserve Inventory	Reduces available quantity and reserves it for the customer's sales order.
Sales Order Reserve Serial Number	As above, but reserves the serial number.
No Backorder	Suppresses backorder creation for unfulfilled invoice quantities (otherwise a backorder is created for the shortfall).
Check Reorder Level	Notifies when an item's quantity nears its defined reorder level.

Integration: links inventory to the ledger for stock valuation (generating Cost of Sales transactions), using Average Cost or Latest Cost. Select the Cost of Sales journal to use, and decide the integration mode once, before recording any stock valuation or inventory transaction (see §14 for the manufacturing implications).

Limits: Max Discount Line % (per transaction line) and Max Invoice Discount % (per whole invoice).

Groups link inventory items to ledger accounts, one tax type serving both sales and purchases:

Field	Meaning
Description	The group's name.
Purchase Tax	Tax type used transacting with suppliers.
Sales Tax	Tax type used transacting with customers.
Sales	Sales account used when selling.
Inventory	Inventory control account used for stock valuation.
Purchase Variance	Records purchase variances (especially relevant in multi-currency trading).
Count Variance	Records differences found during stock counts.
Cost of Sales	Records Cost of Goods Sold, used with the Integration setting above.
Adjustment	Records inventory adjustment transactions.

Defaults pre-fill new inventory items: Unit, Fixed Description (locks the description on document entry), Inventory Group, Invoicing Store, Service/Physical Item, and Serial Number control.

Selling Prices — Solace supports up to 10 price regimes; set how many are Available Regimes and name each Regime Name.

Manufacturing (Bills of Materials) is covered in §14; logistics/transportation is covered in a separate module.

Creating and Using Inventory Items

To create/edit an inventory item: Main Screen → Inventory → double-click Inventory ("Edit Inventory Master") → Add → enter code, description, unit → select the Group (auto-fills tax from the group) → select the item type → set processing parameters → Save. Example items and their ledger effect:

Code	Description	Cost Price	Selling Price	Opening Stock
0DINER	Dinner Table	750	1000	20
0COFFEE	Coffee Table	1100	1700	5

Operation	Debit	Credit
Stock Purchase	Stock Item (cost price)	Creditor (cost price)
Stock Sale	Debtor (selling price)	Sales (selling price)
	Cost of Sales (cost price)	Stock (cost price)

Prices: Prices tab → select the store → enter either the inclusive or exclusive price (Solace recalculates the other using the item group's tax rate) per price regime in use. Future Prices prepare a price change without touching the current price, applied later via the Control Panel assistant. Special Prices apply a different regime for a specific period, set at the bottom of the Prices tab.

Stores, pictures, quantities and reorder levels are all set from the same item entry screen: the Store tab (tick which stores carry the item), the Picture tab (Load/Clear — also used as the POS quick-access button image), the Statistics tab (quick on-hand check), and min/max reorder quantities plus preferred suppliers.

Using Inventory in Documents

All documents (to suppliers and to customers) are batch-driven and linked to inventory: they stay editable until posted, then are sealed. Example: buying 10 items at 1500 each and selling one for 2500.

To register a purchase: Suppliers → Documents → select Supplier Invoice → leave Number as *Auto*, select the account, sub-account if needed, date and reference → enter each line's store, item and description → Update → Current Document Only to post, with the option to print/save/email. Updates: Inventory Quantities, Entry Type per Batch, Supplier Transactions, and other reports.

To register a sale: same process from the Customers menu, via Tax Invoice or Quotation (document type is changeable from the entry screen's header). Updates: Inventory Quantities, Entry Type Batch, Customer Transactions, Trial Balance, and Sales Analysis reports.

Document	Purpose
Quotation	An estimate sent to a customer ahead of a sale.
Sales Order	Processed prior to an invoice, representing the customer's agreement to buy.
Invoice	A sale to a customer; affects inventory and ledger accounts.
Credit Note	Issued when a customer returns part or all of an invoice.
Debit Note	Issued when one or more items were left off an invoice.
Delivery Note	Confirms goods delivered to a customer.
Purchase Order	Records an order placed with a supplier; not posted to the ledger and doesn't update on-hand quantity.
Goods Received Note (GRN)	Records goods received before the supplier invoice arrives, posting to the Accrual Account rather than the supplier account.
Supplier Invoice	The supplier's invoice; if linked to a GRN, reduces the Accrual Account and transfers the balance to the supplier account.
Return/Debit	Reverses a supplier invoice when returning defective goods.
Credit to Supplier	Used when a supplier left one or more items off an invoice.

Recurring Invoices

Used for invoices that repeat periodically. Customers → Tax Invoice/Quotation → select Repeating Invoice as the document type → complete and close the entry screen to save it as a template. The template's Scheduler tab (not present on normal documents) lets you enable automatic repetition on a schedule.

Note. Fully automatic, unattended generation of recurring invoices requires the external “Solace Grata” module.

To generate an invoice from a template manually: Customers → double-click Recurring Invoice → follow the assistant.

Stock Take

Perform a stock take when first configuring the system, and at least once or twice a year afterward, to keep physical and computerized inventory in sync. The assistant (Inventory → Assistants → Inventory Count) supports a full or partial count while the business keeps trading:

1. Process to choose full or partial count (leave the item selection empty for a full count), then Close.
2. Process again to print the A4 count sheet (its last column is left blank for physical counting). “Abort Inventory Count” restarts the process at any time.
3. Capture the counted quantities either manually (“Enter Inventory Manually”, with a search box to filter by code/description) or by importing a CSV (“Import Inventory Count”; columns Stock Code, Barcode, Description, Qty — export the template first to get the right format).
4. Check the Variance report, then Update Quantities to apply the new counts and close out the stock take.

Manufacturing (Bills of Materials)

A manufacturing business uses components, parts or raw materials to produce a finished good. Solace values inventory using either Latest Price (last-in-first-out) or Average Cost; Cost of Goods Sold is the accumulated cost to produce what was sold (labor for a service business, purchase price plus acquisition costs for retail). These settings live in the Inventory settings covered in §12.

BOM Setup and Items

A Bill of Materials (BOM) is the list of raw materials/parts/components needed to produce an end-product.

One-time setup:

1. Create a dedicated BOM entry-type journal if one doesn't exist: Control Panel → Entry Type setup → Add → name it → OK → Close.
2. Enable manufacturing: Control Panel → Inventory setup → Bill of Materials (BOM) → tick Enable Manufacturing → set the Next BOM Number, the BOM journal, any additional cost, and the account that records that extra cost → Apply.

Example: manufacturing a bookshelf from 3 parts plus labor. First create the component items:

Code	Description	Last Unit Cost
1BS_PART_A	Bookshelf Part A	140.00
1BS_PART_B	Bookshelf Part B	150.00
1BS_PART_C	Bookshelf Part C	160.00

To define the BOM on the end-product item: select the item → BOM tab → tick Enabled → enter the BOM code and description → set the produced quantity (e.g. “1”) → tick “Print Details on Invoice” to list components on the invoice → add each part with its required quantity → enter any Extra Cost amounts → Save.

BOM vs. Kit. The same BOM screen handles both. A regular BOM item must be manufactured (see below) before it can be sold. Ticking “Use as Kit” instead builds the BOM on the fly at invoice time — a kit item is just an assembly of components and needs no manufacturing step (§14.2).

To manufacture and produce the end-product:

1. Record the request: Inventory → Manufacturing → New Request → fill in the fields below → Save. Check stock availability first via MR Report (Material Requirement).
2. Process the request: select it → Process → enter the processing quantity → tick Completed if the request should close even if the full quantity wasn't produced → OK. Solace creates the end-product in the store, reduces component quantities, and posts the resulting ledger transactions. Affected reports include the BOM Journal report and Inventory Quantities.

Field	Meaning
Internal	Tick if the request didn't originate from a customer order; leave unticked to link it to a customer account.
Manufacture Number	Filled automatically from the next BOM number.
Sub Account	Customer sub-account number, if linked to one.
BOM Code	The BOM item code to produce.
Description	Free-text description of the request.
Stock Code	Filled automatically with the end-product's code.
Store	The store the end-product will be generated into.
Quantity Done	Running total already produced against this request (manufacture-on-demand allows staged production).

Combo/Kit Items

A combo/kit combines items into one sellable whole without a manufacturing step. Example: a Dinner Suite combining a table and six chairs.

Code	Description	Last Unit Cost
1CH001	Dinner Chair	75
1DS001	Dinner Suite	(calculated from components)

Create the kit item, tick “Use as Kit” on its BOM tab, and add the component items (adjusting a component's cost to reflect a combo discount if applicable — the kit's inclusive selling price is the total of its components).

To sell a kit, select it on an invoice either by its own code (line type “1 Stock Item”) or via line type “3 Kit Item” (filters the lookup to kit items only). If “Print Details on Invoice” was set, Solace lists the components as a comment line and reduces each component's quantity proportionally on posting; Sales Analysis reports reflect the same detail.

First-Time Setup Checklist

1. Complete company setup and user/salesperson administration (General Setup).
2. Review the chart of accounts, account types and financial categories, adjusting descriptions as needed (§2).
3. Create or import the ledger accounts you need (§3).
4. Create customer and supplier accounts, including terms and price regimes (§4).
5. Set up any customer/supplier/inventory categories you want to report by (§5).
6. Set up entry types/journals, including cashbook accounts (§6).
7. Enter opening balances via the General Journal, if this is a new company (§10).
8. If trading stock: configure Inventory settings, groups and defaults, then create your inventory items (§12–13).
9. If manufacturing: create the BOM entry type, enable manufacturing, and define BOMs/kits for your end-products (§14).
10. Capture ordinary transactions through journals and documents, and reconcile the bank monthly (§7, §11).

Glossary

Term	Meaning
Financial Category	The predefined classification (Sales, Cost of Sales, Fixed Assets, etc.) every ledger account belongs to; drives standard financial reports.
Entry Type	A configured journal (cashbook or non-cashbook) that transactions are captured and posted through.
Contra Account	The balancing account Solace posts to automatically to keep a batch double-entry balanced.
Posting	Committing a batch/document permanently to the ledger; before posting, entries remain editable.
100% Tax Type	A tax type that records the full transaction amount to the Tax Control account, used for VAT-only entries.
Open Item	A matching mode where each payment is linked to a specific, matching due amount (as opposed to Balance Forward aging).
BOM (Bill of Materials)	The list of components/raw materials required to produce a manufactured end-product.
Kit/Combo	A sellable assembly of components that requires no manufacturing step, unlike a BOM item.
Stock Take	The process of counting physical inventory and reconciling it against the system's recorded quantities.

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