Minimum Version Required: 24.01
Steps
Managing the Keg Deposits Workflow
Part 1: Key Concepts and General Ledger Setup
The Three Rules of Keg Deposits:
Every keg has a deposit value for the shell. If the supplier isn't charging it, someone is (e.g., a third-party provider).
Every empty has an FOB (a value). The value of the empty shell must be equal to the deposit cost charged for the full keg.
Not all suppliers charge the same deposit cost. If a supplier's deposit cost is different, you must create a separate empty keg product with a matching FOB.
General Ledger (GL) Best Practice
To ensure a "purely exchange transaction" (where you neither make nor lose money on the shell), the income and cost accounts for the deposit portion must offset:
Deposit Income Account on the Full Keg product must equal the Income Account on the Empty Keg product.
Deposit COGS Account on the Full Keg product must equal the COGS Account on the Empty Keg product.
This is achieved by mapping all four fields to the same GL account (e.g., a "Customer Keg Deposits" or "Inventory Asset" account).
Part 2: Workflow for Full Keg Purchase
When receiving a full keg, the product is split into two costings: the liquid and the shell deposit.
Costing Component | Full Keg Product Field | GL Impact |
Liquid | FOB Value | Drives COGS (offsets inventory) and Income (where you make margins). |
Shell | Deposit Cost | Drives Deposit COGS and Deposit Income (should offset). |
Procedure: Purchasing a Full Keg with a Third-Party Deposit
This procedure accrues the shell value as a payable to the third party (e.g., MicroStar) while ensuring the purchase bill only pays the supplier for the liquid.
Pre-Step: Create a Non-Inventory Product (e.g., "3RD PARTY KEG DEPOSIT") and map its Expense Account to a liability account (e.g., Accrued Payables Miscellaneous).
Enter the Full Keg: On the purchase document, enter the full keg product and:
- Enter the full keg's Deposit amount as if the supplier were charging it (e.g., $30.00).
- The FOB is the cost of the liquid only (e.g., $79.00).
Accrue the Payable: Add the Non-Inventory Product (e.g., "3RD PARTY KEG DEPOSIT") as a separate line item:
- Enter a Negative Quantity equal to the number of full kegs on the purchase (e.g., 10).
- Enter the deposit amount as the FOB for this line (e.g., $30.00).
Bill Amount: The total purchase document value will now equal the liquid's FOB amount (e.g., $790.00), which is the amount you pay the brewery. The deposit value is correctly placed into your inventory and accrued as a liability to the third-party provider.
Part 3: Workflow for Returning Empty KegsProcedure: Returning Empties to a Third-Party Provider (Reconciliation)
Use this workflow if the third-party provider (e.g., MicroStar) sends a reconciliation statement instead of paying you immediately for the returned empties.
Enter the Empty Kegs: On the purchase document (return), enter the empty keg product (e.g., "KEG LOGISTICS EMPTY KEG") and:
- Enter a Negative Quantity for the number of empties returned (e.g., (10)).
- Enter the deposit value as the FOB (e.g., $30.00).
Offset the Accrued Payable: Add the Non-Inventory Product (e.g., "3RD PARTY KEG DEPOSIT") as a separate line item:
- Enter a Positive Quantity equal to the number of empties returned (e.g., 10).
- Enter the deposit amount as the FOB for this line (e.g., $30.00).
Result: This process debits the Accrued Payables (liability) and credits the Brewery Keg Deposits (asset), making your accrued payables balance match the third party's reconciliation.
Best Practice: Matching Deposit Costs
Separate Empty Products: If Supplier A charges a $30 deposit and Supplier B charges a $40 deposit, you must create two empty keg products:
Empty Keg A: FOB = $30.00
Empty Keg B: FOB = $40.00
Warehouse Separation: The solution to managing these different empty products is to separate them by supplier in the warehouse on return and perform periodic physical counts to ensure correct assignment and valuation.
Part 4: Workflow for Partial Keg Returns from a Retailer
This workflow ensures the retailer is refunded for the partial liquid and the full deposit on the shell.
Pre-Step: For the full keg product, ensure Consumable Units Per Case is set to a value greater than one (e.g., 4) to allow for fractional returns.
Enter the Partial Liquid Return: On the return document, enter the full keg product as a decimal or fractional unit to reflect the liquid volume being returned (e.g., (0.5) or (2/4)).
Result: The retailer is refunded the price for the returned liquid portion.
Enter the Empty Shell Return: Add the corresponding Empty Shell Product (e.g., "EMPTY 1/2 BBL") with a quantity of (1).
Result: The retailer is refunded the full deposit for the shell.
Inventory Adjustment: After the return, adjust the partial keg out of inventory (e.g., for office use or disposal) since you won't be selling a partial keg.
Part 5: Call to Action
To ensure you're is using these best practices, perform the following reviews:
Review Full Keg Products:
- Check your Inventory Table or run an Inventory Depletions Report (value = Deposit) to confirm the Deposit Value is correct for every full keg product.
Review Empty Products:
- Check your Inventories Table or run an Inventory Valuation Report (value = FOB or Landed Cost) to confirm the FOB for each empty shell product matches its corresponding full keg's deposit cost.
- If the quantity does not match the sum of the deposit or FOB value, set the report to show FIFO layers to investigate discrepancies causing FIFO adjustments.
Review Third-Party Provider Processes:
- Confirm your process for accounting for third-party deposits (e.g., MicroStar, Kegspediter) to ensure it aligns with the purchasing and return procedures outlined above.