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Hi everyone,
I have recently started using MS Dynamics GP and learning to work around it but wasn't able to figure out a proper solution to following problem.
We design and install commercial kitchen appliances. Some of the items that we sell are readily available with our regular suppliers but sometime we have special requests and designs from clients that we need fabricate those items just for specific job/project. Normally every other project will have fabrication requirement. Kindly note the is some lead time in purchasing these items and invoicing the client.
The problem is, these items are specific to certain project and not to be purchased again. so how do i record these items properly in order to get the correct COGS at the time of making invoice.
My current practice is, that don't record the bills from fabrication supplier as item wise rather as a whole in a separate G/L account. see below example
At the time of purchase
1- Debit Project G/L Account $ XXX
Credit Supplier $ XXX
At the time of Invoicing
1- Debit Client/Custom $ XXX
Credit Sales $ XXX
Then a second entry to charge the cost
2- Debit Cost of Good Sold $ XXX
Credit Project $ XXX
problem: I have to issue invoice item wise and not as full project.
You help will be highly appreciated.
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Based on what you said, you are creating a standard PO for the fabricated item(s) to your supplier -- all these can be non-inventoried items since they are one-offs. At the time of receipt, you can record this as:
DB Project Inventory
CR Accrued Purchases
The unit/extended cost on the PO can come from the initial quote you got from the supplier.
When your supplier invoices you, you can record this as
DB Accrued Purchases
CR Accounts Payable
Assuming all you want to do is add the final item to the invoice and record the correct cost, you can certainly recall the non-inventoried items on the PO. GP will automatically adjust the cost of the non-inventoried item when you post the supplier invoice or use the invoice cost to calculate the COGS IF AND ONLY IF you enter the non-inventoried item as it was entered on the PO. That invoice will look something like this:
DB COGS
CR Project Inventory
DB AR (Client/Custom)
CR Sales
If you have to invoice the customer BEFORE you receive a final bill from the supplier, just know that GP will automatically adjust the Inventory and COGS based on the invoice you posted from the supplier.
In summary, you can use non-inventoried items and you can use the 3-way matching process in POP to record your transaction. SOP will post the correct COGS so long you use the same non-inventoried items on both the PO and SO.
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