Incorrect Cost of Goods Sold on a Posted Sales Invoice.

Beatrice

Hi,

Sales invoice (105722) was posted on 31/03/07 and the lines are as follows:

Item No:9085
Quantity:220
Unit Price EXcl. VAT: 24122.61
Line Amount Excl. VAT: 5306973.76
Unit Cost(LCY): 19,177.04

When I go to the Item Ledger Entry of the Posted Sales Shipment for the invoice, the Cost Amount(Actual) field has been updated and is displayed as being 4927961.18.

When I go to the Value Entries of the Posted Sales Invoice, Cost Amount(Actual) is 4,927,961.18.

How can I correct the Cost of Goods Sold for this invoice as the correct Unit Cost of the Item should have been: 4037117.27/220= 18350.53?


Please advise.

Thanks and Regards,
Beatrice.

Miklos_Hollender

Navision does not support having adjusted, actual costs on Invoices, Customer Ledger Entries etc. You can develop a batch job if you want, but generally, cost/COGS/margins reporting should be based on Value Entries, Item Ledger Entries, flowfields in Item table or G/L.

Madiya

can you answer the following questions for me first?
- what costing method are yu using?
- do you sell in different locations or do you only sell in one location as the company?
these questions are important because the unit cost on the item card might be ignored in the calculation of the COGS depending on the answers to the above questions.

Beatrice

can you answer the following questions for me first?
- what costing method are yu using?
- do you sell in different locations or do you only sell in one location as the company?
these questions are important because the unit cost on the item card might be ignored in the calculation of the COGS depending on the answers to the above questions.

Costing Method: Average

Actually sales is made from two different locations. This client deals in sales of IT equipment.

Sales of IT equipment is normally made from Mainstore location.

On the other hand, sometimes workshop (another location) needs to perform an assembly before shipment of the assembled equipment is made to the customer.

In this case, mainstore prepares a Stock Transfer Order which will transfer the components to be assembled from Mainstore to Workshop.

Workshop receives the components, makes the assembly.

The final product will be a single item, say PCTEC, on the Item Card.

Workshop prepares an Item Journal, enters negative adjustment lines for the components and a positive adjustment line for the final product in Workshop location itself, specifying Unit Cost for each components and the sum of the Unit Cost of the Components becomes the Unit Cost for the Assembled Item.

The item journal is posted.

Workshop then prepares the final shipment of the PCTEC to the customer.

In fact, I noticed on my posted Item Journal that the Cost Amount (Actual) for the PCTEC has changed. Is it because I am using Average Cost as my Costing Method?

Thanks and Regards,
Beatrice.

Beatrice

I have noticed that on the Value Entry of the posted sales invoice the Cost Amount(Actual), makes a total of Rs 4,854,252.68.

Whereas on the posted sales shipment for above posted invoice, the (Cost Amount Actual) is -4,927,961.18 in the Item Ledger Entry.

Can someone please help me to understand this difference?

Thanks and Regards,
Beatrice.

ssingla

If you check the value entries, there will be adjustment entries for the COGS. The amount of adjustment is not updated on the sales statistics therfore the difference. Though the Cost amount Actual on sale shipment will be the first entry in the value entry provided you are not using item tracking.

Beatrice

Can I use Revaluation Journal to update the Item Ledger Entries of the transaction?

We are really stuck on this issue, we cannot get a clear idea how to go about... ](*,)

This is creating much problem for the client as the COGS is not correct and they are not able to produce management accounts.

Please advise.

Regards,
Beatrice.

David_Singleton

Beatrice wrote:

Can I use Revaluation Journal to update the Item Ledger Entries of the transaction?

We are really stuck on this issue, we cannot get a clear idea how to go about... ](*,)

This is creating much problem for the client as the COGS is not correct and they are not able to produce management accounts.

Please advise.

Regards,
Beatrice.

The client should not be producing management reports from Posted Documents, these have not financial integrity with the system, and can even be deleted. All reporting should come from ledgers. This is a fundamental part of the design of Navision.

Beatrice

I understand but the problem still remains that the COGS is not the correct figure for the sales invoice.

How can we correct this COGS figure?

Thanks and Regards,
Beatrice.

Beatrice

Hi,

When I go on the Sales Statistics Window for the Posted Sales Invoice, the Cost of Goods Sold is correct.

But finally, on which figure should the client place reliance to get the actual Cost of Goods Sold on the posted sales invoice?

Which figure represents the actual Cost of Sales:
The Cost(LCY) on the invoice's Sales Statistics window;or
The figure on the Value Entries of the posted sales invoice; or
Item Ledger Entries of the Posted Sales Shipment?

David_Singleton

Beatrice wrote:

Hi,

When I go on the Sales Statistics Window for the Posted Sales Invoice, the Cost of Goods Sold is correct.

But finally, on which figure should the client place reliance to get the actual Cost of Goods Sold on the posted sales invoice?

Which figure represents the actual Cost of Sales:
The Cost(LCY) on the invoice's Sales Statistics window;or
The figure on the Value Entries of the posted sales invoice; or
Item Ledger Entries of the Posted Sales Shipment?

The value entries on the posted Invoice will reflect the correct COGS.

Beatrice

Thanks for the reply.

So the user needs to navigate to the Value Entries of the Posted Sales Invoice.

On the Value Entries table, he refers to the line whose Source Code is Sales, the amount in the Cost Amount (Actual) field refers to the Cost of Sales for this invoice.

Please confirm.

Thanks and Regards,
Beatrice.

David_Singleton

Beatrice wrote:

Thanks for the reply.

So the user needs to navigate to the Value Entries of the Posted Sales Invoice.

On the Value Entries table, he refers to the line whose Source Code is Sales, the amount in the Cost Amount (Actual) field refers to the Cost of Sales for this invoice.

Please confirm.

Thanks and Regards,
Beatrice.

That's basically correct, but remember that adjustments can come from different places, and have different document numbers and dates, and its important that you include all the correct ones.

Beatrice

That's basically correct, but remember that adjustments can come from different places, and have different document numbers and dates, and its important that you include all the correct ones.
_________________
David Singleton
Navision Consultant since 1990
Dynamics Book
forum@go-live.us

Thanks very much. I am much more clear about it now.

I noticed that there are a few lines on the Value Entries of the posted sales invoice, the Source Code for the adjustments are INVTADJMT.

Should the client consider these lines also to get the correct COS figure or is it only automatic adjustments made by the system because the Costing Method is Average for that item?

Thanks and Regards,
Beatrice.

David_Singleton

Beatrice wrote:

That's basically correct, but remember that adjustments can come from different places, and have different document numbers and dates, and its important that you include all the correct ones.
_________________
David Singleton
Navision Consultant since 1990
Dynamics Book
forum@go-live.us

Thanks very much. I am much more clear about it now.

I noticed that there are a few lines on the Value Entries of the posted sales invoice, the Source Code for the adjustments are INVTADJMT.

Should the client consider these lines also to get the correct COS figure or is it only automatic adjustments made by the system because the Costing Method is Average for that item?

Thanks and Regards,
Beatrice.

Yes these lines are a part of the COGS.

Beatrice

These lines INVTADJ are being created because I placed a checkmark in the Automatic Cost Adjustment field on the Inventory Setup, is it?

In fact, the main problem with our client is that they have mistakenly specified the Costing Method as Average for this item.

Consequently, system is making automatic cost adjustment each time a sales invoice is posted for this item, resulting in a Cost of Sales figure which being adjusted.

Thanks and Regards
Beatrice.

Beatrice

Should I remove the checkmark in the Automatic Cost Adjustment field on the Inventory setup, bearing in mind that this will apply to all my items?

Then when I run the Adjust Cost Item Entries batch job, is it possible to exclude that item?

Thanks and Regards,
Beatrice.

Beatrice

Can someone please tell me how I can disable these cost adjustments on the item?

Is it by unchecking the Automatic Cost Adjustment on the Inventory Setup?

Please help... :?

Thanks and Regards,
Beatrice.

johnson_alonso

Can someone please tell me how I can disable these cost adjustments on the item?

Is it by unchecking the Automatic Cost Adjustment on the Inventory Setup?

Please help... Confused

You must create a filter field to filter what item you want to adjust in the adjust cost item entries window.
Unchecking automatic cost adjustment only make your inventory system become periodic system.


Rgds,