System Calculation of Cost of Goods Sold on Sales Invoice

Beatrice

Hi,

User wants to know how does system calculate the Cost of Goods Sold on a Sales Invoice.

How does the system relate the sale of an item to its Purchase?

Is there any reference documentation for explanation?

Please advise.

Thanks and Regards,

Beatrice.

seapcrs

Hi Beatrice:

Navision can calculate the cost in several ways... it depends on the type of cost calculation selected in the item card.

Please refer to the item card, invoice tab and see the fields (Costing Method, standard Cost and Item Cost).

Push F1 over this fields and follow the help explanation.

Hope it will help you.

Regards.

Raúl.

Beatrice

Hi,

Thanks for reply.

In fact, I want to understand on what basis system will apply the sale of an item to an inbound stock transaction.

For instance, if user uses a system of FIFO for store issue, where do we specify this setup in Navision and how does the system perform the issue based on this method in Navision?

From which Table in Navision can I get this relationship between an outbound transaction and an inbound transaction?

I have seen Table 339: Item Application Entry but I am not sure if it is this one.

Please advise.

Regards,
Beatrice.

Malajlo

I was wandering the same and create a shortcut to solve the problem.

It is not quite elegant, but it works per posted sales invoice.
Add new field, FlowFiled, compose CalcFormula as
Sum("Value Entry"."Cost Posted to G/L" WHERE (Item No.=FIELD(No.),Document No.=FIELD(Document No.)))

I must warn you that if you have more than one item per invoice, field value is repeated. And we are using different NoS for documents so the Document No. can not be the same for i.e. purchase or transfers.
Value represents total cost of all entries of item per invoice. It is not possible to get specific cost per line. At least not using FlowField.

You can also add FlowFiled on Sales invoice and Sum per
Item Ledger Entry Type
Source No.
Document No.

Kowa

Beatrice wrote:

From which Table in Navision can I get this relationship between an outbound transaction and an inbound transaction?

I have seen Table 339: Item Application Entry but I am not sure if it is this one.

Yes, that's the one.
Some more info here :
http://www.mibuso.com/forum/viewtopic.php?t=13932

The item cost in the sales line is only an average cost, this is taken form the item or SKU card,but absolutely irrelevant for the actual long term inventory valuation. This is posted as "COGS Amount (Expected)".

For each sales item entry, there are one or more item application entries, connecting this sales to one or more ( if the sales base quantity is higher than the remaining qty ) positive item ledger entries ( purchases, sales credit memos etc.).

These positive item ledger entries have one or more value entries attached to them. These value entries hold the actual cost when the purchase is invoiced. There can be direct unit costs value entries, but extra item charges, rounding entries etc. as well.

The "Adjust cost item entries" report ( has to be run regulary, daily if possible) will then transfer the actual cost from the purchase value entries via the connection set by the item application entries to the sales value entries. The balance of this is shown in"Cost Amount (Actual)" of the sales item entry.

The unit cost in the posted document is not adjusted. All inventory valuation is done basically by balancing the field "Cost Amount (Actual)".

N.B.
If the sales quantity is negative or a sales credit memo is posted ( => positive value entry) the unit cost in the sales line does have a long term influence on inventory valuation. In these cases it must be ensured that this field holds the right value by selecting the "Appl.-from item entry"