The system allows you to add freight, duty and other inventory related costs to the value of the inventory items being received into the system or to expense these costs.
• If the costs are to be expensed, the operator may add additional distribution lines to the invoice being processed and charge these lines to the correct general ledger accounts.
• If the costs are being capitalized or added to the cost of the inventory items being received, they are referred to as supplemental costs.
Supplemental costs can be manually added to items as they are received into inventory using the PO/Inventory receiving program.
Supplemental costs can also be automatically added to the cost of the items being received using what is called a “freight adder”. A freight adder is a dollar amount or percentage that can be specified by manufacturer, product line or by inventory item. This amount or percentage is applied to the cost of the inventory to calculate the amount of supplemental cost to add to the item cost during receiving.
If supplemental costs such as freight are added to the cost of the items being received into inventory, the system uses the following logic when writing and processing these inventory receiving transactions.
Inventory Cost – includes the item cost plus the supplemental costs. This cost is loaded into the cost field of the inventory transaction and it is also used when calculating the new average cost for the item. The inventory cost and the quantity are also used when posting the receiving transaction to the general ledger inventory account.
Unvouchered – The amount that is posted to the unvouchered inventory account is based on the PO price for the item being received. The unvouchered amount does not include any supplemental costs as these costs were not included in the PO price, and they are not normally payable to the same vendor from which you purchased the items.
The system uses the amount in the FC_PO_PRICE field and the exchange rate used for the receiving transaction (stored in the XRATE field) when calculating the amount to be posted to the unvouchered control account.
Freight Liability - The difference between the inventory or “loaded cost” and the amount charged to the unvouchered account is posted to a freight liability account. The freight liability account is updated with all supplemental costs that are applied during receiving, whether they are manually specified or automatically calculated using the Freight Adder Option. Invoices for freight and customs charges can be posted to this freight liability account as they are received to reduce the balance in the account.