"Bill and Hold" Invoicing

(0) Share

Report

Posted on by Debra Bellin

120

We need to invoice customers for inventory they have purchased (we have manufactured for them) but we are "holding" their inventory until further notice. We need to create the invoice, recognize the revenue and cost of the inventory items, BUT we are not shipping the inventory so we do not want inventory relieved. When we later ship the inventory, the only accounting that occurs is that inventory is relieved. And the shipping information (actual ship date, method, etc) is updated. Does anyone have a solution to this issue or know of anyone we can contact that might be able to modifiy our system to handle this?

Thank you,

Debbie Bellin

*This post is locked for comments

I have the same question (0)

All responses (11)

Answers (0)

Ron Draganowski 1,575 on at

Like (0)

Report

Good job summarizing the situation into a single paragraph! I am not aware of any ISV solutions to do this; however, something like this certainly could be handled with customization.

First I would need to be sure of the accounting. Is it correct that at the time you print the invoice you want to debit A/R and credit Sales? You mention "recognize cost", but I'm not sure how to offset the cost GL debit without a corresponding credit. That pesky old accounting rule: debits and credits must equal.

The next question: I would assume that the inventory hold may span beyond the end of a fiscal period (month-end). Is this correct? Your response here changes the solution, because for example we want to make sure at month end that your A/R GL balance matches your Aged Receivables trial balance.

Let me know the answer to these, and I'll do my best to throw out some ideas.

Thanks,

Ron
Ron Draganowski
Senior Solution Developer
Olsen Thielen Technologies, Inc.
rdrag@ottechnologies.com
www.ottechnologies.com Find me on LinkedIn: http://www.linkedin.com/in/rondraganowski

Was this reply helpful? Yes No
P 350 on at

Like (0)

Report

Do we have a solution here yet? 'cause we're having a similar problem too. Revenue and cost are both recognized once items are invoiced, but actual products will be shipped out later whenever they ware requested by the customer. Transactions will run over month end.

We're using AX 2009. Any help will be appreciately.

P.

Was this reply helpful? Yes No
Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

Like (0)

Report

As Ron alluded to, you can't recognize COGS without relieving inventory. That credit has to be posted somewhere and legally, once you invoice the customer, it's their property and should not be included in your inventory. Your auditors and the IRS would have heartburn over this.

Was this reply helpful? Yes No
Debra Bellin 120 on at

Like (0)

Report

Ron Dragonowski of Olsen Thielen Technologies, Inc. has come up with the perfect solution for us.   Our controller and auditors agree we are in compliance with the IRS and GAAP.      We talked to many many companies and this solution had a minimal learning curve whereas all other companies were building entirely new modules (almost) to handle it.

We are recognizing revenue and cost at the time we would normally ship a product but we are really holding it. We then can track this inventory separately at a $0 cost and ship whenever the customer requests.   It meets our tracking needs, the customers tracking needs, and the revenue and cost recoginition is in compliance.

Feel free to contact me if you would like more information.   Or you can reach Ron (who designed and programmed this modification) at rdrag@ottechnologies.com.   Ron's phone number is 651-621-8594.

Good Luck!

Was this reply helpful? Yes No
Debra Bellin 120 on at

Like (0)

Report

I just spoke with Ron at OTT Technologies. They do not do programming for AX 2009. Email me at debbiebellin@polyquest.com and I would be happy to share the design of our modification with you.

Debbie

Was this reply helpful? Yes No
Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

Like (0)

Report

Ron, you are the man! Great job.

Was this reply helpful? Yes No
Shahid Ghafoor 1,445 on at

Like (0)

Report

I can gave you the solution of your problem. For this I have to understand the structure of your organization, either retail or manufacturing . Your problem is not a big but only a lack of practice in different practial situational area.
The following are the things that will help me to explain:
•         Organization structure
•         Organization document flow;and
•         Organizaion system
Actually GP have not limited Flows of Data, It gives the ways. We can implement it by different ways as we required.

Shahid Ghafoor
Cost & Management Accountant – (ERP)
info.shahid@yahoo.com

Was this reply helpful? Yes No
MG-16101311-0 26,225 on at

Like (0)

Report

Two options without any customizations:

1) This is a procedural solution in the warehouse: invoice the customer and move the merchandise to a "layaway" or long term staging area within the warehouse. Product stored in this area does not belong to your customer, but to your customer's customers.

2) This is an application-based solution that frankly would complement the above option. Invoice the customer in GP, then perform a return to a virtual site (the layaway or long-term staging area proposed above) at a zero cost as In Service, this way, the overall quantity available of an item will not be impacted. This will have no impact on your overall inventory cost. As you ship the items to the customer, just do an inventory adjustment to the virtual site. Since the cost is zero, it will not impact anything and there will be no distributions created for the transaction in GL.

Was this reply helpful? Yes No
P 350 on at

Like (0)

Report
Wow, thank you guys for responding my question this fast. I made my post here by accident because we're dong AX and a google search led me to this thread which is a GP discussion. But still, thank you all very much.

Though GP is handling this situation differently from AX, design logic should be same. This is what we plan to do:

Invoice a sales order

Move items to a customer warehouse thru profit/loss journal, with $0 cost

Duplicate sales order lines on the invoiced sales order, and change unit price of the newly created lines to $0

Ship items when they are requested, and invoice with $0.

P.

Was this reply helpful? Yes No
Ron Draganowski 1,575 on at

Like (0)

Report

Somebody just reminded me about this community post from long ago... it was a fun project. FYI for those looking to discuss Bill and Hold solutions with me, I am now with RSM (formerly McGladrey). You can view my contact information on my profile page. Thank you!

Was this reply helpful? Yes No