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Cost of Sales Accounting

Former Member
0 Kudos

Experts,

In our Gas Utility we are trying to capture the cost of gas cost into separate expense and Deferred Revenue GLs.

Eg.  Customer Bill - $ 100  (Margin - 20, Gas Cost 70,  Tax- 10)

We would want to break the gas cost of 70 into ( Expense Cr 70,  pipeline dr 20, purchasecost dr 50)

We are implementing custom logic to read every bill document and do these postings in FI-GL.  However, I would like to see if there is any standard configuration to capture the postings either during invoicing or FIGL transfer.

Thanks,

Yuvi.

2 REPLIES 2

AmlanBanerjee
Active Contributor
0 Kudos

Hi Yuvi,

I dont think so there is any such standard configuration to capture your requirement.

However, just a thought, why are you not unbundling the gas cost in the first place.

So, when the invoice of Say $100 is raised, then it will be distributed as follows-

Margin-$20

Pipeline Cost-$20

Purchase Cost-$50

Tax-$10

So, you need to create another two sets of sub transactions of which one will point to the Pipeline revenue GL and other to the Purchase GL.

Hope it helps

Thanks,

Amlan

0 Kudos

Thanks Amalan for the reply.   I saw a node in Financial Accounting for Cost of Sales Accounting.  I read through it and it talks about assigning a Functional Area in account assignment and seems like this will help in reporting based on a special ledger.  However I justed wanted to check if someone has used this in any Utility.

As regards to the option of breaking out in the billing document based on the subs, The current postings are like this

A/R   Dr.  100

Revenue GL 101 Cr 20  (Margin)

Revenue GL 102 Cr 70  (Gas Cost)

We are also writing non posting relevant line items Z1 - $ 20 (pipeline cost)

                                                                                 Z2 - $ 50 (purchase cost)

the expense entries that are required is as below.  The below entries are made by a custom program which is what I am seeing if can incorporate standard config to achieve this.

Expense Dr  70

Deferred GL Cr $ 20

Deferred GL Cr $ 50

Regards,

Yuvi.