Hi, while crediting Purchase Invoice with Item Charges on it - in result i’ll get postings where the item(s) itself are credited (Cost Amount is a negative sum that corresponds to the direct purch price of items) and the unit cost will respectively influenced and postings to G/L is done in resp. sum but the amout of Item charge will not affect Cost amount and there will be no postings to G/L Inventory Account. Although, the unit cost is affected. The icredited tem charge cost will then only appear on Cost Amount (non inventory). Why the item charge couldn’t be credited from inventory at once and posted to GL respectively? Marika
An item charge is not considered an inventory cost as it is not an “item” the charge is an additional cost making up the cost of the item to have it delivered maintained etc into inventory, but not part of the physical purchase cost. As an example you may buy an item for $1000 from one vendor and receive the import fees from another vendor at $100, the cost of the item if the item charge is used is $1100, the import charge is seen as a cost of the item, but a non-inventory cost. If you credit the goods you will not necessarily get the import fees back, so these are separate, unless of course you are credited for these, then you can post through a purchase credit memo.
If you credit the goods you will not necessarily get the import fees back, so these are separate, unless of course you are credited for these, then you can post through a purchase credit memo. Thats right steven. But in my case both: items and charges are on the same purhase invoice. And I made a credit memo and both were credited - items and charges. But in result the cost of items were credited but the charges were left in stock value account. As the result the value of stock in GL is wrong and I to post a GL journal to correct the value. Is this normal? Marika
Hi I have just done the following: Raised a PO for an item with a cost of £100, added an item charge line for £10 and assigned it to the purchase line. I then received the goods, I invoiced the goods using match receipt and did not alter the price. This pushed £110 to my inventory asset account. I then raised a purchase credit memo, I used the copy document function and copied the posted invoice, I went into the item charge and assigned it to the line again. I then posted the invoice. This removed £110 from my inventory asset account. Therefore with my processing I am seeing the GL completely clear. Are you doing something different?
Thanks Steven I’m afraid that means my setup is wrong in some ? what is the version no u use? mine is 3.6 maybe this is the problem? Marika
I ran this through in version 4.0 Can you use the registers and work out where the item charge credit went? Has it even been processed?
Hi Steven, I tried it on 4.0 as well, and with Cronus (i.e. with demo settings) and - the credited Item charges are always handled as I described. on Purchase invoice the item charge will be posted as following: 1) debit - Purch.Account, credit - Direct Cost Applied, Debit - Inventory Account, credit Payables 2) on credit Memo the Item charge will be posted: Credit - Purhs Account, Debit - Payables As the result the Item Charge will remain on Inventory Account. Marika
Hi Marika I am using Cronus V4.0. I set up my own item with a unit cost £100.00 and used the item charge JB-FREIGHT already within Cronus at a cost of £10.00. I have expected cost posting turned on and the following happens in the registers. 1. Upon receipt of the purchase order. Raw Material Interim 100.00 Invt. Adjust Interim -100.00 2. Upon posting the invoice on get receipts. Raw Material Interim -100.00 Invt. Adjust Interim 100.00 Raw Materials 100.00 Direct Cost Applied -100.00 Raw Material 10.00 Direct Cost Applied -10.00 The Purchase transaction is also populated here Purchase Retail 10.00 Purchase Tax 1.75 Purchase Raw Materials 100.00 Purchase Tax 17.50 Accounts Payable -129.25 The purchase accounts are different due to the general posting setup. 3. I then process the credit memo Raw Materials -100.00 Direct Cost Applied 100.00 Purchase Retail -10.00 Purchase Tax -1.75 Purchase Raw Materials -100.00 Purchase Tax -17.50 Accounts Payable 129.25 This leaves 10.00 from teh item charge in Raw Materials and Direct Cost Applied 4. I run the adjust cost item entries process Raw Materials -10.00 Direct Cost Applied 10.00 The inventory account now shows a net change of zero for the date.