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Dynamics 365 Community / Forums / Microsoft Dynamics NAV (Archived) / NAV accounting questio...
Microsoft Dynamics NAV (Archived)

NAV accounting question: COGS and Purchase Invoice

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Posted on by Community Member Microsoft Employee

Dear Experts,

We have a question on NAV accounting.

We are a trading company which will separately issue these documents:

1. Sales Order/Invoice(SO/SI) - Sales to Customer

2. Purchase Order(PO) - Purchase stock from Vendor

3. Purchase Invoice(PI) - Freight cost from Vendor

We suppose to calculate the Gross Profit(GP): SI - (PO+PI)

However, we need to issue the PI manually by Item charge on PI line and it posts directly to Account Payable(AP) which the item charge amount suppose to be the Cost of Goods Sold (COGS).

What am I suppose to do to post the PI Item charge to COGS?

Thanks.

 

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  • Suggested answer
    Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: NAV accounting question: COGS and Purchase Invoice

    When you receive the Purchase Invoice (step 3) from Freight Vendor, You can create Purchase Invoice with type as Item Charge (Freight) and load this cost on Purchase Receipt (Step 2).  You should not book your Freight Invoice using G/L Account, instead use Charge Item.

    This would ensure your accurate COGS, provided you run "Adjust Cost Item Entries Batch Job"

    Refer following link to understand Item Charge Assignment in more detail.

    msdn.microsoft.com/.../hh168616(v=nav.90).aspx

  • Verified answer
    Alexander Ermakov Profile Picture
    Alexander Ermakov 28,094 on at
    RE: NAV accounting question: COGS and Purchase Invoice

    When you make a purchase, you will have the following transaction (I skip VAT for simplicity):

    Debt "Item Stock Value" - Credit "Account Payable" (purchase stock from Vendor)

    When you make a sale by posting a sales order, you will get the following transaction among others:

    Debit "COGS" - Credit "Item Stock Value" (purchased stock value)

    If after that you need to make a posting of Purchase Invoice using Item Charges, then select item charges in the line of the PI and allocate them to the lines of the posted document for purchased stock (https://msdn.microsoft.com/en-us/library/hh168616(v=nav.90).aspx ), it should make you the following transaction:

    Debit "Item Stock Value" - Credit "Account Payable" (Freight from Vendor)

    This will increase the cost of the items that you had purchased.

    In order to populate your Item Charge to the COGS, run the "Adjust Cost - Items Entries batch job. This will create additionally:

    Debit "COGS" - Credit "Item Stock Value" (Freight cost value)

  • BenSyd Profile Picture
    BenSyd on at
    RE: NAV accounting question: COGS and Purchase Invoice

    Hi,

    You should use the 'Item Charge Assignment' functionality on the freight PI lines to allocate the additional freight cost to the inventory that you have previously receipted.

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