Problem: How to manage additional expenses if sale occurs before Additional Expenses document entered?
Solution: Use an Inventory Write Off document to allocate such costs.
NOTE Please use manual Average Cost Price to understand calculation process of average cost price and the way to track it.
Consider an example:
Invoiced received was entered on October, 25th for an 1 Item (Price 100 AED).
Sale was registered with Invoice on October, 26th and item's cost is deducted as 100 AED.
Then on November, 1st, entity receives the bill from the transport company for transport charges as of 50 AED.
So this amount should be added to the cost of the sold. And in the system this amount is related to the item's balance (50 AED) without any quantity.
If an Additional Expense document was received in the same month as the sale occurred, then cost is allocated due to Month End Close procedure as cost calculation options are enabled:
If an Additional Expense document was received as the month is closed, then the additional expenses are not allocated automatically, and the cost remains on the item's balance:
This amount will be deducted accordingly with the next purchase and sale, as Additional Expenses are included in the Average Cost Price of the item already.
In case if item is not purchased again, then manual correction with Inventory Write Off document is possible. Please follow the steps.
1. Create Inventory Write Off document:
- enable an option Amount Only at Main tab
- select Cost Of Sales Expense GL Account in Correspondence field
2. At Inventory tab put:
- the Item
- Additional Expense Amount
3. Post Inventory Write Off document, so it creates the transaction (Cost Of Sales Expense GL Account is in Debit side):
Check the balance of inventory, that amount is adjusted:
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# average cost price mismatch