Ceravolo Consulting

Doral, FL

Difficulty Level: Beginner Level AccountMate User

Version(s) Affected: AccountMate 7.1 for SQL and Express

Module(s) Affected: PO, AP

Posting Date: 09/13/2006

DESCRIPTION

When consumers purchase goods they may incur costs such as freight charges, handling costs, import duties and other incidental costs necessary for the delivery of the goods. These inventory related costs, also known as landed costs, may be recorded either directly to expense/cost of goods sold or added to the purchase costs of the received goods. AccountMate 7.1 includes a Landed Cost feature which allows you to use the accrual method to record the landed costs and increase the inventory cost of goods. It also provides several options to allocate these costs to the received goods in each PO receipt transaction.

This technical note provides a comprehensive discussion on how to record the accrual and allocation of landed cost using the Accrue Landed Cost function in Purchase Order (PO) module. This document also discusses the procedure to record the reversal of the accrued landed cost using the AP Invoice Transactions function in the Accounts Payable (AP) module.





SOLUTION

Steps to accrue and allocate landed cost

A. Activate the Landed Cost feature in the General (2) tab of the PO Module Setup.

1. In the Landed Cost Transaction area, perform the following steps:

a. Mark the Enable Landed Cost checkbox to activate the Landed Cost Feature. Marking this checkbox will enable all the other fields in this area.

b. In the Next Transaction # field, enter a number that the system will assign to the next landed cost accrual transaction. If the Use System-Generated Transaction # checkbox is marked, the system updates this number sequentially each time you record a landed cost accrual transaction.

c. Mark the Use System-Generated Transaction # checkbox, if you want the system to automatically assign numbers to landed cost accrual transactions. The system will take the value in the Next Transaction # field when assigning numbers to landed cost accrual transactions.

d. Mark the Allow Multiple Landed Cost for Same Vendor and Receipt checkbox to allow recording of landed cost accruals for the same vendor and PO receipt more than once.

2. In the Landed Cost By area, select the default option to allocate the landed cost when recording the landed cost accrual transaction either by weight, item value or user input.

3. In the Cancel Accrued Landed Cost in Cancel Received Goods area, select either of the options No Cancellation or Prompt for Cancellation. Selecting the No Cancellation option will disallow the cancellation of the accrued landed cost during cancel received goods. The Prompt for Cancellation option will give you flexibility whether to cancel the accrued landed cost during cancel received goods.

B. Accrue and allocate the landed cost using the Accrue Landed Cost function. To do this, perform the following:

1. Access the Accrue Landed Cost function in the PO Module transaction menu.

2. In the Information tab, perform the following steps:

a. In the Vendor # field, enter the vendor number.

b. In the PO # field, enter the PO number. It will display the PO # / Receipt # Leading Search window if you have recorded multiple receipts for the same PO #. Select the particular receipt that you want to record the landed accrual transaction. AccountMate will allow you to record accrual of landed cost per PO receipt only.

c. In the Sales Tax field, enter the sales tax code. If your company is order tax type and you want to include the sales tax amount to be allocated to your inventory items, leave this field blank and be sure to include the sales tax amount when you enter the total landed cost amount in the Amount field.

d. In the Amount field, enter the landed cost amount that you want to accrue and allocate to your inventory items.

3. Go to the Cost Allocation tab and perform the following steps:

a. In the Allocate Landed Cost By area, select one of the following options on how to allocate the landed costs. The system may automatically compute and display the allocated costs for each line item in the Allocated Amt column in the grid depending on the option you selected.

1) By Weight – the system will automatically allocate the costs using the weigh values of the line items.

2) By Item Value – the system will automatically allocate the costs using the received cost of the line items.

3) By User Input – the system will not automatically allocate the costs and let the user manually enters the costs among the line items.

b. Accept or amend the GL account in the Accrued Received Goods account field.

c. Click the Line Item GL Dist… button to display the GL Distribution for Item # [XXX] window.

d. Accept or amend the GL distribution accounts and enter the distribution amounts.

e. Click the Close button.

C. Review the journal entries in the GL Distribution tab.

D. Click the Save button.

Steps to reverse accrued landed cost

A. Access the AP Invoice Transactions function from the AP Module transaction menu.

B. In the Information tab, perform the following steps:

1. In the Vendor # field, enter the vendor number.

2. In the AP Invoice # field, enter the invoice number.

3. In the Invoice Amount field, enter the invoice amount.

4. Click the Overwrite Reverse Accrued Landed Cost button to display the Reverse Accrued Landed Cost window.

5. Enter the amount that you want to reverse in the Reverse Amt column.

6. Click the OK button.

C. Review the journal entries in the GL Distribution tab.

D. Click the Save button.

Understanding AccountMate’s Landed Cost feature and how to initiate its use can help you arrive at a more accurate record of incidental inventory costs. With this information you can determine the net inventory costs of your purchased goods.

This information is provided "AS IS" without warranty of any kind. AccountMate disclaims all warranties, either express or implied. In no event shall AccountMate be liable for any damages whatsoever including direct, indirect, incidental, consequential, loss of business profits, or special damages, even if AccountMate has been advised of the possibility of such damages.


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