Tracking Plant Material You Grow Yourself

If you buy liners or plugs, pot them up, grow them on and then sell them, there is no single right way to put that in VMX. There is a spectrum, and where you land depends on one question:

How arm's-length do you want to treat your growing operation?

Everything else follows from that. This page walks the spectrum, says what each choice does to your numbers, and shows the VMX mechanics for each.

Two questions, not one

It is tempting to treat this as a single choice: capitalize growing costs into inventory, or expense them as you go. It is really two questions, and the answer to one does not decide the other.

1. While the crop is growing, where do the costs sit? In VMX inventory, as components you have received, or outside VMX in your financials as a growing expense?
2. When the plant is finished, what cost does it carry in VMX? Built from its actual components, set at a transfer price, or left at whatever the liner cost?

The second question is the one that drives your margin reporting, and you can answer it well regardless of how you answered the first. Keeping every input out of VMX and expensing it as you go is entirely compatible with a finished plant that carries a realistic cost. You set that cost when you receive the finished plants, which is exactly what Option 1 below does.

What actually hurts is neither of those. It is receiving a finished plant that still carries only the liner cost, or no cost at all, and never setting anything else. Then VMX shows close to 100% margin on everything you grew, your department margins are flattering, and nothing tells you whether growing is worth doing.

One thing to settle with your accountant

If you expense the inputs as you go and then receive finished plants at a transfer price, those two entries do not cancel each other out on their own. Without a plan, you count the same crop twice: once as growing expense, once as inventory.

The usual fix is a holding account. Liner, supply and grower-labour costs are coded to a "plants growing" or work-in-progress account as you buy them. When you receive the finished plants into VMX and that purchase order becomes a bill to your internal growing vendor, the bill is coded against the same holding account, which draws the accumulated cost back out. The account should trend toward zero once a crop is finished and received.

Agree that with your bookkeeper before you set this up rather than after, especially if you are moving between cash and accrual accounting.

Option 1: Arm's length — grow in your financials, buy from yourself in VMX

This is the most common approach, and the one to start with if you are not sure.

Treat the growing operation as if it were a separate business that sells to your retail operation.

How it works

1. All growing costs stay in your accounting system. Liners, soil, pots, plastics, fertilizer and grower labour are tracked in your accounting system (QuickBooks, Sage, or whatever carries your P&L and balance sheet) under their own class or department, kept separate from your retail costs. None of it is entered in VMX.
2. When the plants are finished, receive them into VMX from yourself. Create a vendor for your own growing operation and build a purchase order to it for the finished sizes.
3. Cost them at an honest third-party margin. Use Set Costs (by Margin) in the menu at the top of the purchase order. Select the lines, choose a margin — 50% or 60% is typical — and VMX sets each item's cost from its retail price. The goal is to approximate what you would have paid a real vendor for that plant.

What this gives you

That cost is capitalized into inventory on the balance sheet, and is recognized as cost of goods sold when the plant sells in VMX. The same dollar amount is revenue to the growing side of the business.

That last part matters more than it sounds. If you transfer plants to retail at cost, the growing operation makes no money by definition and you can never tell whether growing is worth doing. Pricing the transfer at a realistic margin lets both sides show their own profitability on the P&L.

What it costs you

Traceability is not one-to-one. You know what the finished plant was valued at, but VMX cannot tell you which liner invoice it came from, unless you receive it with the actual costs from the grower or liner supplier.

Option 2: Components into stock, finished cost built from them

At the other end of the spectrum, put the inputs into VMX as real inventory items — liners, pots, soil, tags — and let VMX build the finished plant's cost out of them.

The mechanism is a Bill of Materials. You define the finished PLU's components and their quantities, and VMX keeps the finished item's cost updated from the current cost of each component.

Use this when you want the finished plant's cost to be genuinely derived rather than estimated, and you are willing to buy and receive supplies as stocked inventory.

Know before you commit

• Your supplies have to become real inventory items you receive and count. For most stores that is a real change in how the back door works.
• Labour still is not captured. A Bill of Materials sums component costs. If you want grower labour in the finished cost, it has to be added another way, or handled the arm's-length way in Option 1.

Option 3: Receive components, then reserve them while they grow

A middle path. Receive the liners and inputs into VMX so they are on the books and traceable to their purchase orders, then hold the growing stock aside using Item Reservations with a reason of "growing" and an expiry date for roughly when the crop will be salable.

This keeps everything accrued into inventory and traceable to its purchase order and invoice, while keeping unfinished stock out of what the sales floor can sell.

Use this when traceability from invoice to plant matters to you and you want the inputs on the books from day one.

Why "Other Costs" on the liner PO is not the answer

It is tempting to add soil, pots and fertilizer as Other Costs on the purchase order you bought the liners on. It does not do what you want, for three reasons.

It may not reach item cost at all. Whether an other-cost rolls into unit cost is configurable, not automatic. There is a store-level setting that turns the whole roll-in on or off, and each cost type can be marked as not rolling in. Where a dedicated "Growing Supplies" cost type exists it is deliberately set not to roll in, so that growing supplies do not inflate inventory cost. So you cannot assume the money you enter there lands in the plant's cost.

Where it does roll in, it spreads across the whole order. The amount is distributed proportionally over every line on that purchase order, not according to which plants actually consumed the soil. If the order covers several crops, or you pot part of it into gallons and part into quarts, the split will not match what you really used.

And it attaches to the liner, not to the finished plant. You receive liners as one item and usually sell the grown-on plant as a different item and size. Cost added to the liner's purchase order stays with the liner. This is the reason stores say they can only get the plug cost into VMX.

There is a fourth problem if you push purchase orders across to your accounting system. Other Costs ride on that order's vendor, so supply costs land on the liner vendor's bill for amounts that vendor never invoiced you, and someone has to back them off by hand every time.

Use one of the three options above instead.

Choosing

If this matters most	Start with
Simplicity, and knowing whether growing is profitable	Option 1 — arm's length
A finished cost genuinely built from real component costs	Option 2 — Bill of Materials
Tracing every finished plant back to its purchase order and invoice	Option 3 — receive and reserve
Not overthinking it this season	Option 1, at a 50–60% margin

You are not locked in. Plenty of stores start arm's-length and tighten up later once they know which crops are worth costing precisely.

Talk it through first

This choice touches how your accountant closes the books, not just how VMX reports. It is worth a short conversation with VMX support and your bookkeeper together before you set it up, especially if you are moving between cash and accrual accounting.