Cost Accounting Transactions from Deliveries and Invoices
Nominal Ledger Transactions for outgoing cost accounting postings (Cost of Sales postings) can be created when you
approve Deliveries, or when you
approve Invoices. They can also be created from
Work Sheets in the Service Orders module.
If you would like Cost of Sales postings to be created from Deliveries, follow these steps:
- Switch on the Deliveries check box in the Sub Systems setting in the Nominal Ledger (see step 6 on the Switching Cost Accounting On page), and make sure the Invoices check box in the same setting is switched on as well.
- Switch off the Don't Post Cost From Deliveries option in the Cost Accounting setting (see step 5 on the Switching Cost Accounting On page).
- It is recommended that you switch on the Invoices Update Stock option in the Account Usage S/L setting, just in case you sell a Stocked Item from an Invoice without a Sales Order (i.e. without a Delivery).
You may need to have Cost of Sales postings created from Invoices. This may be because you are not using the Sales Orders module and therefore will not create Delivery records, or because you need sales transactions and related Cost of Sales postings to have the same dates (this is a requirement in the UK). Note that stock levels will still be adjusted from Deliveries. So, if you issue a Delivery with an earlier date than the Invoice, there will be a period where the valuation in the
Stock List report will not match that in the Nominal Ledger. If you would like Cost of Sales postings to be created from Invoices, follow these steps:
- Switch off the Deliveries check box in the Sub Systems setting in the Nominal Ledger (see step 6 on the Switching Cost Accounting On page), but make sure the Invoices check box in the same setting is switched on.
- Switch on the Don't Post Cost From Deliveries option in the Cost Accounting setting (see step 5 on the Switching Cost Accounting On page).
- Switch on the Invoices Update Stock option in the Account Usage S/L setting.
If you are creating Cost of Sales postings from Invoices, it is recommended that you do not use the Invoices Before Delivery option in the Stock Settings setting, or at least that you use it with great care. Please refer to the description of this option
here for details. If you are using the Service Orders module, note that Cost of Sales postings for spare parts will not be created from Service Order Invoices, so they must be created from Work Sheets (the Service Order equivalent of Deliveries).
The value of each Cost of Sales posting will be calculated using a Cost Model chosen as follows:
- The Cost Model will be taken from the 'Cost Model' card of the Item record.
- If the Cost Model in the Item is Default, if you are using the Use Item Groups for Cost Model option in the Cost Accounting setting in the Stock module and if the Item belongs to an Item Group, the Cost Model will be taken from the 'Cost Model' card of the Item Group.
- In all other cases (e.g. the Cost Model in the Item Group is Default, you are not using the Use Item Groups for Cost Model option in the Cost Accounting setting and/or the Item does not belong to an Item Group), the Cost Model will be taken from the Cost Accounting setting..
The different Cost Model options are fully described on the page describing the
Cost Accounting setting.
The Stock Account credited by such Transactions is determined as follows:
- The Stock Account for the specified Location will be credited.
- If this is blank, or if you have not specified a Location, and if you are using the Use Item Groups for Cost Accounts option in the Cost Accounting setting, the Stock Account for the Item Group to which the Item belongs will be credited.
- If this is blank, the Item does not belong to an Item Group or you are not using the Use Item Groups for Cost Accounts option, the Stock Account in the Account Usage Stock setting will be credited.
The Cost of Sales Account debited by such Transactions is determined as follows:
- If you are using the Use Item Groups for Cost Accounts option in the Cost Accounting setting the Cost Account for the Item Group to which the Item belongs will be debited.
- If this is blank, the Item does not belong to an Item Group or you are not using the Use Item Groups for Cost Accounts option in the Cost Accounting setting, the Cost Account for the Item will be debited.
- In all other cases, the Cost Account specified in the Account Usage Stock setting will be debited. The default Cost of Sales Account will be shown on flip E of the Delivery, where you can change it if necessary
In all cases, the appropriate Cost Account for the Zone of the Customer will be used.
! | If you find that Nominal Ledger Transactions for Cost of Sale are not being created despite this having been specified in the Sub Systems setting, the likely cause is that the default Cost Model has been set to None or you are using the Don't Post Cost From Deliveries option in the Cost Accounting setting. |
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