Adjust item cost

Hi,

My customer is using weighted average costing. In the exsiting setting, my customer does not activate any inventory ledger posting (Do not tick Post physical inventory and post financial inventory in the inventory model group).

When I post the Puchase order invoice. Ax only Debit receipt ledger and Credit the vendor ledger.

If i create a Misc charges Id for AP and setup in the PO line, (Dr Item, Cr ledger). My customer want to absorb the misc charges cost to the item but they do not want any double entry.

  1. If there any setting to disable the ledger double entry for PO Misc charges?

  2. Beside enter misc charges in the PO line, is there any workaround so that customer can absorb the additional cost to the item and DO NOT generate any double entry.

Kindly advice. thanks in advance.

During the setup of Misc. Charges you can tell the system whether these charges need to be posted separately or to be added to Item Cost and should be posted Inventory Receipt Account.

In the Misc. Charges see the Posting tab - where you can setup Misc. Charge code wise - how the posting need to be done in the system.

If you want to post the Misc Charges into Inventory - in the debit group change the Debit Type to Item and Credit Group - change the Credit type to Customer/Vendor.(the same concept applies for both purchases and sales)

Yes, you are right Kranthi. I setup the Misc charges to DR item & CR a ledger account. However, my customer only want to absorb the cost to item with any double entry to the ledger. Is there any workaround?

Thanks.

when you post the invoice with the above setup -

the entries will be Debit - Inventory Receipt account (Net Amount + MIsc Charges)

Credit - Vendor(Net Amount + Misc Charges).

The above is the entry that will be passed into finance when you try ti add Misc Charges to Item.

I don’t understand of your term “Double entry to the ledger”. Can you define it another way?

Sorry to make you confuse.

Here is the scenario. I create a PO with 1 PO line. Buy a new ItemA

Qty = 1 , Unit price = USD 10. When post the PO invoice, AX will create ledger entry Dr Inventory receipt account USD10, Cr Creditor account USD10. This entry is correct.

If I setup a Misc charge code = Freight. Debit Type = Item, Credit Type = Ledger account (account = Freight ledger account).

I setup this Freight in the PO line, let say Fixed USD 5.

When I post the PO invoice, I DO NOT want Ax to generate any ledger entry for this USD 5 BUT in the inventory transaction I need to absorb the cost. The item weighted average cost is USD15.

Is this possible? Hope you are clear with this explanation.

If the Misc charges are added to inventory with above setups

according to your example - 15 USD will be posted tom receipt account.

and 10 USD to Creditor then where should this 5 USD should go - if you don’t want this to be posted.(It is an expense to the company how will you write it)

hi kong.

i think this issue is related to landing costs and purchase costs. For every debit entry, there must be a corresponding credit entry. The only way to enable the item take additional costs is to debit the item then what do you do to credit?

The clue is if there are freigth charges, it must be paid to a clearing agent or vedor.

Use the closing and adjustment function (adjust based on transaction). Select the particular purchase order transaction which would have been posted at purchase cost without miscllaneous charges and adjust . This will debit the item and credit the account setup as stock profit and loss which i will suggest you change into a miscllaneous charges account.

then create another vendor transaction for the frieght:

Purchase order cost:

Dr Item 10

Cr Vendor 10

closing adjustment

Dr item 5

Cr Stock P&L 5

Payment of freight

Dr Stock P&L 5

Cr Freight vendor 5

let me know if it works

dare

This request is simply not possible. A transaction cannot simply affect the average cost without creating a ledger entry. Somewhere, someone from an accounting perspective carries the burden of cost for the raising of the cost, you must define this and attribute it appropriately.