Price fluctuation problem

[Former Member]

Dear All,

For one of our major customer, we are creating billing often, but there is a price fluctuation, that affects our billing.

We used to create billing and keep the material ready in our warehouse, when customer requires, we send the materials immediately. These process will be completed with 4 days.

Our office in one state, our customer located in another state.

If the billing date is today, within a day, there is a fluctuation in the price.

To settle down the difference of amount, we are issueing Credit or Debit memo as per the requirement.

Someone suggested that, this problem can be solved either through "Consignment Process" or "Retrobilling"

Could you please give your opinion on this scenario.

Regards,

Mullairaja

[Former Member · Accepted solution]

Hi,

I understand from your issue that there could be different prices on date of billing and date of dispatch (which would be later)

The better would be to creat proforma invoice on bill date and make the commercial invoice on the date of dispatch.

Since the commercial invoice would be basis for accounting there would not be price charged and psted to customer ledger.

The proforma invoice could be used for informatroy purpose.

Regards

Sanjay

[Lakshmipathi]

Two options are there for this requirement

1) One is you treat the warehouse as a storage location and as and when the delivering plant produces the material and kept ready for despatch, you stock transfer from that storage location to this via MB1A. Once the goods are despatched from this warehouse, at that time, you can generate a commercial invoice

2) The other option is consignment fillup

thanks

G. Lakshmipathi

[Former Member]

Dear Lakshmipathi,

Problem lies with excise department Bacause, when we are removing the goods from the plant, we bound to pay the excise duties.

So, either it is proforma invoice, stock transfer, duties are calculated based on those values only.

Even if it is not hitting the accounting entries, we are losing our excise values.

Is "Retro Billing" useful for this scenario?

If yes, please give me some hints about "Retro Billing", because I never used retro billing before.

Regards,

Mullairaja

[Former Member]

Answered.