Hi Guys, I have an interesting senario which I am not sure of an answer to, can anyone help please.
If a Purchase Order is raised for a number of widgets, the widget are receipted and then Invoiced. A Sales Order is raised and some Widgets are sold and Invoiced and then the Purchasing Department discovers that the Purchase was invoiced at the wrong Cost Price. How can I update the COGS. If the PO had not been invoiced it would be straight forward but as it has been invoiced at the wrong price I am not sure if the COGS can be updated.
1/ The simplest is to generate a new PO and add Charge Items, one for each wrongly costed Item. Just add the additional cost here, and then attache these to the original receipt. You then mark the new Vendor invoice somethign like VI010101-A
2/ You can do an inventory valuation, and use nromal accounting to adjust the vendor aspect.
Once the Item Cost is cahnged, just run Adjust Cost routine and Post to GL,a dn all is fixed.
PS if you need good quality low costs widgets, please check out www.cronuswidgets.com they generally have everything in stock, and their prices are very good.
You could also process the difference direct to the vendor through a GL transaction and use the revaluatoin journal to affect the stock and push through updated COGS. Which I think is what David means with point 2 and “valuation”.
Hi Guys, firstly can I say thanks to you all for your input, I’m not sure I fully understand what you are all saying as Charge Items to me are Carriage Charges (or this there more to them than just that) and linking of invoices. If I may, I would like to keep this one open as I may well need some more help/guidance in the next few days. David, I didnt realise that you were into wheeling and dealing in Widgets, we must discuss this sometime, better still, if you can do give me a contact for cheap Ruger 10/22 rotary mags it would be appreciated.
What I normally do is create new Charge Item called somethign like “COSTADJ” or “COSTERROR”. ANd use it to post these additional costs. Basically a Charge Item can be anythign that changes (Increase or decrease) the cost of an item.
Its also a great way to handle rebates when say a vendor gives you a 3% rebate if you sell more than 10,000 widgets in a year.
As to Cronus Widgets, its more a side line, and I don’t make much money from it. It was done on a whim one night, since I needed a company to plan my book around.
Hi David or Steven, thanks very much, the penny has dropped. I only ever thought of Item Charge as Carriage but ofcourse it can be almost anything. Can you confirm what I reckon to be the course of action please.
Raise a PO with a line type of Item Charge.
Line. Item Charge Assignment
Function. Get Receipt Lines and select appropriate receipt.
Enter Qty to Assign, close and post - Receipt and Invoice.
Run Adjust Cost - Item Entries
Post Costs to G/L
Thanks very very much for your help. What would we do without this Forum, without people like David, Steven, Thomas to name but a few, I would have been stuck for hours on many an issue.
After you choose shipment (or purchase) lines (in Line → Item Charge Assignment), you have to actually assign charge to that lines by amount or bye equally “method” in that same form.