GPTip42day - Item Cost on Linked SO/PO

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Frank Hamelly | MVP...

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A common misconception is that the cost of an item on a Sales Order that is linked to and being fulfilled by a Purchase Order will reflect the cost of the item(s) received on that PO. This is not how GP works.

If you're using FIFO or LIFO Perpetual valuation method, the cost will always be based on the next available layer in the FIFO or LIFO stack unless the item is serial or lot controlled.

If you're using Average Perpetual, the cost will always be the Average Cost unless the item is serial or lot controlled..

If you're using Periodic (Standard) then the cost will always be the Standard Cost unless the item is serial or lot controlled.

Bottom line is, if you want the actual cost from a PO to flow to a Sales Order/Invoice, it must be a serial or lot-controlled item.

This was originally posted here.