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Late Fees / Landed Cost in Wholesales

Relevance

In some trade industries, a significant amount of costs for trade goods are not known when ordering. Separate invoices for costums or late fees, or price changes by the supplier may occur. As it is significantly reducing the marging of sales orders, it is important to have these costs posted to COGS of sales orders.

Solution

SAP Business ByDesign release 1605 comes with Actual Cost. This functionality used e.g. for manufacturers is also capable of calculating Actual Cost for trade goods.

  1. In scoping, activate Actual Costing.
  2. Assign related work Center Views in Work Center Inventory Accounting to users.
  3. Execute the periodic task Actual Cost Rollup to calculate the Actual Cost.
  4. Optional: Execute the periodic task Actual Cost Allocation to post differences.
  5. Optional: Execute the periodic task Actual Cost Release to set the Actual Cost as inventory price.
  6. Check account determination for Actual Costing (subledger Inventories).

Example

In May 2016, 500 bottles of Orange Juice have been ordered at a net price of $550. The supplier invoice has been received, gross price is $592.63 (taxes in US, posted to inventory / P&L), plus freight as late fee of $37.71. A quantity of 250 bottles has been sold at a price of $337.50.

In the period end close, the GR/IR run has been executed. Now, the Actual Cost Rollup is done. Actual Cost of $630.34 have been determined.

As a next step, the run Actual Cost Allocation is executed. Differences are being posted to COGS and inventories (remaining 250 pieces).

In profitability reporting, the COGS are now reflecting the actual cost.

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