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Uninvoiced Item Charges Not included in landed Cost Problem

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Posted on by DJ999

We are just about to go live with BC but have realised that item charges are not included in the value of stock until the item charge invoice has been posted onto the system.

The problem is sometimes, these item charge costs arrive weeks after the product has been received into our warehouse.

A good example might be import duty... the invoice might not arrive for 6 weeks. In the meantime, if someone tries to sell that item, they will see a landed cost that doesn't include the import duty.

As you can imagine, that is highly dangerous, the sales person might agree to sell the item at too low a value.

Any suggestions?

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Community Member on at

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RE: Uninvoiced Item Charges Not included in landed Cost Problem

Hello,

Given the volatility of the Selling Price, in that you need to establish after knowing various costs, you are correct this one is hard since Landed Cost invoices show up over time. The application of the Landed Costs against the Purchase Receipt is not the issue, I think. It getting the the actual cost and then setting the selling price. Have you ever thought about analyzing the Item costs and trying to set a Selling Price, with the Margin you want above the average. You can continuously review the costs by quarter or semi-annually and adjust the selling price but you will always make the margin you want.

I would examine the app Martin mentioned to see if that will help what you are trying to achieve.

Hope this helps.

Thanks,

Steve
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MartinNL 480 on at

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RE: Uninvoiced Item Charges Not included in landed Cost Problem

Hi,

There is an extension available on Appsource from Celever Dynamics that may provide you what you are looking for, may be worth investigating.

appsource.microsoft.com/.../pubid.tecman|aid.clever-landed-costs|pappid.7ff61b2b-2255-4542-a4b3-adda0aba69ff

Regards,

Martin

*edit* found the user guide too, which is rather interesting on how it works. Good luck! :)

https://docs.cleverdynamics.com/Clever%20Landed%20Costs/User%20Guide/01.%20About/
DJ999 10 on at

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RE: Uninvoiced Item Charges Not included in landed Cost Problem

Thanks both Bilal and Stephen

For some customers, we have a sales price list, for others, we do not and as the product cost itself changes fairly dynamically, we have to be able to provide dynamic sales pricing to our customers. So unfortunately setting up sales price lists wont work.

Bilal, i think your suggestion was for us to post a purchase invoice as we know the cost in advance and then post a correction when the true invoice arrives. The problem here is that we are buying shipping containers that have perhaps 9 or 10 associated costs... customs duties, vat, shipping charges, broker commissions, insurance, etc etc. If we post an invoice correction you end up with 3 transactions instead of one... the original invoice, the reversal, then the correct invoice. The sheer volume of such transactions would make our ledgers an absolute mess

I still find it rather incredible that we seem to have taken on a system that is unable to tell us correct landed cost for many weeks after a shipment arrives. Its a pretty fundamental system fail really

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RE: Uninvoiced Item Charges Not included in landed Cost Problem

Hello,

Your scenario is not uncommon. It happens with Freight and Customs carriers almost always. The invoices show up weeks later. You mention that your salesperson might sell the item to low. The Landed Cost Freight/Customs is the Charge(Item) and included in the Cost when sold. Are you basing the Sales Price off the Cost? I would think you have setup the MSRP in the Unit Price field, on the Item Card, and any special or discounting pricing within the Customer or Item Card related to a Customer, ALL, Customer Group.

Based on the scenario you are writing, I would try to setup MSRP and Sales Pricing. This way the salespeople will not look at Cost and the Pricing you have established is always greater than expected cost. If this is not possible, since you have the Charge(Item) line on the PO with an Cost that you are expecting, I would perform the action Bilal mentioned and Receive the Charge(Item) with Item Charge Assignment completed. Make sure Expected Cost = TRUE on the Inventory Setup so the Expected Cost accrual entry is booked. The Salesperson will see the Direct and Charge(Item) Costs and set a correct Selling Price. When the actual Invoice arrive, as Bilal noted, the entry will reverse and actual booked.

Hope this helps.

Thank,

Steve
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Bilal Haider 248 on at

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RE: Uninvoiced Item Charges Not included in landed Cost Problem

Hi,

Its very interesting scenario let see what other members suggest here.

As per me you can post expected cost (As we normally knew what is tax rate on items) using some G/L Account and when actual invoice came in reverse previous transaction and post actual cost.