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Freight and Landed Costs
Purchasing assets and expense items
Purchasing for multiple locations
A/P Reserve invoice
Effects of adjusted purchase prices
Contents:
Appendix: Variations in Purchasing – A/P
Explore alternate versions of the purchasing process
Understand the consequences of each step on inventory and accounting
In this unit, you will:
Variation in Purchasing: Purpose
In your business, the purchasing process has variations. There are business needs which are better handled by different document types and require different types of accounting.
For example, you often receive items that have additional costs such as freight and customs amounts which must be allocated across multiple items in the order.
You like to group purchases for a single vendor into one purchase order even though the items may need to be shipped to multiple warehouses.
Besides purchasing inventory items, you also purchase assets or expense items.
Some times you need to use a reserve invoice to pay in advance before a vendor will ship an item
Additionally, purchase prices are sometimes adjusted in the final invoice and this may affect the cost of goods.
Purchasing Variations – A/R: Business Example
Freight and Landed Costs: Unit Overview Diagram
Topic 3: Purchasing Assets and Expense Items
Topic 4: A/P Reserve Invoice
Variation in Purchasing – A/R
Topic 1: Freight and Landed Costs
Topic 2: Purchasing for multiple locations
Topic 5: Effects of Adjusted Purchase Prices
Freight and other additional expenses/revenues
General Information (Header)
General Information (Footer)
Contents
Sales or Purchasing Document
Freight
Quantity TotalItemItem Freight
Activated and Defaulted from Document Settings
Activated by Form Settings, enter manually
10
20
60
A1000
A2000
100
200 300
600
Add. Exp./Rev. on Header Level: 30
Copying Freight with the Draw Document Wizard
Parameters1Lines Items and Line Expenses/
Revenues
2Header
Expenses/ Revenues
3
Exchange Rate Take rate from Row Take rate from Doc
and Row Take from exchange
rate tableCopy: Copy all data Copy partially
(Customize)
Line Items Select Line Items Change Quantity Change Price or
TotalLine Freight and
Expenses/ Revenues Change Total Change Base Method
Header Freight and Expenses/ Revenues
Select Header Freight & Expenses/ Revenues
Change Total Change Base Method
The Drawing Method
Quantity Total Add. Exp.
Contents
xxx
xxx xxx
xxx 10
20
General Information (Header)
Contents
Sales or Purchasing Document
Quantity Total
100
200 300
600
Add. Exp.
10
20 Quantity Total Add. Exp.
Contents
xxx
xxx xxx
xxx 0
0
All
Quantity Total Add. Exp.
Contents
xxx
xxx 150
150 2,5
10
Quantity Total Add. Exp.
Contents
50
50 xxx
xxx 5
5
None
TotalQuantity
Influence of Freight on the Stock Price
1200
Stock AccountStock Account
1000
Allocation Allocation Costs AccountCosts Account
1250
VendorVendor
200
Expense Expense Clearing AccountClearing Account
1 2
1000 200
1
1 1
2
22
502
Distribution Method
0
0
Contents
Quantity TotalItemItem
A1000
A2000
100
200 300
600
Freight on Header Level: 30
10
20
10
20
10
20
15
1520
10
Distributed Amount
NoneQuantity
Volume
Weight
Equally
Row Total
Credit Memo with Expense Differences
1200
Stock AccountStock Account
1000
Allocation Allocation Costs AccountCosts Account
1200
VendorVendor
200
Expense Expense Clearing AccountClearing Account
1 2
1000 200
1
1 1
2
22 200
Expense Expense Variance AccountVariance Account
3
3
100031200 3
Landed Costs
CustomsInsuranceShippingStorageTax….
Supplier TransportCompany
Ex-Factory Price
FOB Price Journal Entry to adjust inventory
valuation
Freight
LandedCosts
Purchasing Process with Landed Costs:Landed Costs Document
Purchasing Process
SalesProcess
Supplier TransportCompany
Landed Costs Journal Entry
Purchase Order
GRPO
A/P Invoice A/R Invoice
Delivery
Sales Order
Landed Costs Process: Journal Entry to Allocate Costs to Inventory
SalesProcess
Supplier TransportCompany
Purchase Order
GRPO
A/P Invoice
Landed Costs
A/R Invoice
Delivery
Sales Order
Journal Entry
Setting up Landed Costs
Set up and assign G/L accounts for :
Customs Allocation Account
Customs Expense Account
Landed Costs Allocation Account
Set up units of measure for weight and item dimensions
Create entries for each type of landed cost with a distribution method
Purchasing for Multiple Locations: Unit Overview Diagram
Topic 3: Purchasing Assets and Expense Items
Topic 4: A/P Reserve Invoice
Topic 5: Effects of adjusted purchase price
Variation in Purchasing – A/P
Topic 1: Freight and Landed Costs
Topic 2: Purchasing for Multiple Locations
Split Purchase Order
Purchase Order Blanket 1000
Item Quantity Warehouse
A1000 11 01
A1001 15 02
Logistics
Split PO
Purchase Order 1000-1
Item Quantity Warehouse
A1000 11 01
Purchase Order 1000-2
Item Quantity Warehouse
A1001 15 02
Ship to: Berlin Ship to: Hamburg
Purchase Order Blanket 1000
Purchasing Assets and Expenses: Unit Overview Diagram
Topic 3: Purchasing Assets and Expense Items
Topic 4: A/P Reserve Invoice
Topic 5: Effects of adjusted purchase prices
Variation in Purchasing – A/P
Topic 1: Freight and Landed Costs
Topic 2: Purchasing for Multiple Locations
100
Special Control Account
Postings in Purchasing Process for Assets
Purchased Item
Fixed Assets
Inventory Item
Sales Item
VendorAsset
Account
100100
A/P InvoiceA/P Invoice
Postings in Purchasing Process for Non-Inventory Items
Purchased Item
Fixed Assets
Inventory Item
Sales Item
Vendor
Expenses AccountEU Expenses Acc.Foreign Expenses Acc.
100100
Item Category:
A/P Reserve Invoice: Unit Overview Diagram
Topic 3: Purchasing Assets and Expense Items
Topic 4: A/P Reserve Invoice
Topic 5: Effects of Adjusted Purchase Prices
Variation in Purchasing – A/P
Topic 1: Freight and Landed Costs
Topic 2: Purchasing for Multiple Locations
A/P Reserve Invoice
General Ledger(Value)
Warehouse(Quantity)
1 2 3
Purchase Order A/R Reserve Invoice Goods Receipt PO
Effect of Adjusted Purchase Price: Unit Overview Diagram
Topic 3: Purchasing Assets and Expense Items
Topic 4: A/P Reserve Invoice
Topic 5: Effect of adjusted purchase prices
Variation in Purchasing – A/P
Topic 1: Freight and Landed Costs
Topic 2: Purchasing for Multiple Locations
Posting Price Differences
1000
Stock AccountStock Account
1000
Allocation Allocation Costs AccountCosts Account
1100
VendorVendor
400
Cost AccountCost Account
1
1000
1
1
3
23 40
Price Differences Price Differences AccountAccount
3
3
400 2
603
Goods Receipt PO A/P Invoice2 A/R Delivery