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Receiving Freight, Brokerage or Duty Charges prior to receiving the invoices

Problem Details:

How do I Receive Freight, Brokerage or Duty Charges prior to receiving the invoices?

 

Solution:

It is necessary to assign addtional costs - for example freight, brokerage or duty charges - to a receipt to add these costs to the cost of the item. In many cases, these amounts are not known specifically until the invoice arrives. However, the received item may need to be sold or shipped before the invoices are received. In order to account for the full cost of the item including the freight, brokerage or duty, the user can assign these additional costs to the receipt with estimated costs. Open Purchase Orders -> P/O Transactions -> Receipt Entry and go to the Additional Costs tab. Enter the freight vendor (if it is different from the vendor supplying the items) and then insert the additional charge item in the detail grid. (Additional Costs can be setup in Purchase Orders -> P/O Setup -> Additional Costs). Enter an estimated amount for the cost and assign a proration method. Post the receipt. Now the estimated costs will be assigned to the costs of the items and when they are sold, the COGS will be more accurate.

When the invoice for the freight or other additional cost is received, the actual cost can be entered either through the Purchase Orders -> P/O Transactions -> Receipt Entry screen, or the Purchase Orders -> P/O Transactions -> Invoice Entry screen. The difference between the estimated amount originally posted and the actual amount entered will be recorded as a Receipt Adjustment and assigned to the cost of the item(s). If the item has already been sold, this cost will remain in inventory until adjusted out or in the case of Moving Average costing method assigned to the remaining items.

Entering the freight (or any other additional cost) as an estimated amount prior to receiving the invoice and the actual amount enables the user to more closely record the item cost if the item needs to be sold before the actual cost is known.

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