Adding Additional Costs to Inventory When They Are Not Known At Time of Receipt in Accpac:

It is often identified that custom clearing agents or freight and insurance handlers do not bill the charges at the time of delivery of goods but send an accumulated bill on a monthly basis and then it becomes a headache for company to prorate it to inventory that is already shipped or consumed.

Then the company is left with following alternatives:

1.       To not to prorate the cost to inventory and directly add it to Cost of Sales at the end of year, hence compromising the costing effect.

2.       Wait for making the stock receipt till the time we receive a bill from vendor, which is not very practical.  To struggle and convince the vendor to send bills at the time of delivery, which your vendor might not agree to do.

Another alternative is to create a provisional vendor in Accpac Accounts Payable module for the purpose of prorating an approximation of additional costs on Inventory and then adjust the costs when the actual ones are known.

Let’s see in detail how this is accomplished:

Firstly we need to create a Provisional Cost Vendor Group and Account Set and Vendor in Accounts Payable module where the account set will link it to an account in General Ledger for Provisional Cost Vendor. Now go ahead and create the receipt selecting Provisional Cost Vendor (Let’s name him PR01) PR01 and put in the approximation of additional costs which is generally known to Accounts Team by experience. Then the respective Invoices against Material vendor and Provisional Cost Vendor shall be made.

	Dr	Cr
Inventory	100
Material Vendor		100
Inventory	30
Provisional Cost Vendor (PR01)		30

Next, when the actual invoice is received from your Additional Cost vendor, book it on the name of vendor (Let’s name him AD01) AD01 in Accounts Payable Module as a summary type invoice, and select the GL created as ‘Provisional Cost Clearing A/c’ under Income Statement.

	Dr	Cr
Provisional Cost Clearing A/C	40
Additional Cost Vendor (AD01)		40

Now to reduce the payable for Provisional Cost Vendor and increase the same for Additional Cost Vendor, pass a Credit Note/ Adjustment entry in Accounts Payable module while selecting the invoice created through PO Module and selecting the same ‘Provisional Cost Clearing’ account to be credited.

	Dr	Cr
Provisional Cost Vendor (PR01)	30
Provisional Cost Clearing A/C		30

Finally to adjust the difference between approximate and actual additional cost, create a GL-JE debiting Provisional Cost Clearing and Crediting COGS or Cost Variance account.

	Dr	Cr
COGS/ Cost Variance	10
Provisional Cost Clearing A/C		10

This way the inventory costs for each delivery can be identified and then added to COGS at the end of year.

Hope this helps ease your work.