Can I adjust Job Ledger for Cash Discounts taken?

rsaritzky

Current platform is 3.60.

Scenario is: We use Job Costing, and we incur costs against a job and our contract with the customer states that we have to bill the customer our actual costs with no markup.

So here's an example:

We receive an invoice from a subcontractor with a cost of $100.00 to a subcontractor – after posting the Purchase Invoice, the Job Ledger shows a "Usage" transaction of $100.00

But we have 2% discount terms with the sub, so we end up issuing a check for only $98.00.

Observation:
The Job Ledger still shows $100.00 in the Usage transaction

We currently have to override the total billed to the customer on the Sales Invoice after "Get Job Usage" is run to only $98.00, thereby leaving $2.00 of "unbilled" usage.

The 2% discount taken at payment time does not affect the job ledger. Of course, I wouldn't expect it to. BUt, in a more complex example, e.g. if the Purchase Order paid has 30 line items to 30 different jobs, I wouldn't expect NAV to allocate the discount taken to each job and generate 30 Job Ledger “negative usage” transactions.

Has anyone ever encountered this business scenario? What workaround or solution did you come up with?

BTW, our transaction volume is very high, so manually entering a writeoff adjustment in the job ledger is too cumbersome.

Alex_Chow

Cash discount is an A/P task, not related to purchasing. It's treated as a separate discount since it's during the time of payment, not purchase.

This same concept is applied when you purchase inventory and take early payment discounts. The inventory items is still at the same cost of when you posted the invoice.

For what you need, you need to customize it so the discount percentage is applied to the job number that the payment is applied to.

rsaritzky

Alex Chow wrote:

For what you need, you need to customize it so the discount percentage is applied to the job number that the payment is applied to.

Alex - I've had to do what you propose in other situations. Because the Payment Journal doesn't look at the purchase invoice lines at all (doesn't even look at the purchase invoice header), this is fairly complex - looking through every purchase line to see if it is job-related, then generating a job ledger entry for the adjustment. It also has some rounding implications - each discount on a multi-line purchase invoice would have to be rounded and it's possible you could be off a penny or two at the end.

Not an easy thing to deal with. Right now, I'm thinking of writing a ProcOnly report that will pass through the Job Ledger and cross-check each Usage transaction that has a partial-open balance with the original purchase document and determine if the amount is due to a cash discount, then create a Job Journal Entry for the difference. The information isn't time-critical, so this process could be run once or twice a month.

Ron

Alex_Chow

Unfortunately, there are no existing code in NAV that will update the cost to the ledger entries based on payment discounts for you to copy from.

We've done something simliar to this when dealing with commissions, essentially, summing up item lines and take out cash discounts based on payments received. The formula is complicated, but then again, we didn't have to write to any ledger tables.

On another note, updating the costs on the job ledger may potentially cause problems during an upgrade. I've dealt with this problem upgrading our database internally since I go in and modify job ledger amounts all the time.. But that's probably another topic...

Good luck!

rsaritzky

Alex Chow wrote:

Unfortunately, there are no existing code in NAV that will update the cost to the ledger entries based on payment discounts for you to copy from.

On another note, updating the costs on the job ledger may potentially cause problems during an upgrade.

Yeah, I wouldn't update the costs on the job ledger - I would create an "adjustment" ledger entry (i.e. a negative-usage transaction) and apply the two ledger entry records to each other. This preserves NAV integrity and provides an audit trail of what actually happened.