, , ,

This blog post continues the previous one by illustrating an alternative approach how incidental acquisition costs can be incorporated into the total acquisition costs of a company’s inventory.

The sample data used in the following are the same that were used in the previous post and are illustrated once again in the next screenshot.

As before, I assume that a company purchased various items (cameras, computers, etc.) for 100 mio. EUR in a given year and that the different vendors that supplied the items charged 1.4 mio. EUR for transportation & freight to deliver the items to our warehouse. In addition to the direct freight costs, 600 TEUR indirect freight costs that could not directly be linked to any product / purchase order were recorded in Dynamics AX. In the following year, for a purchase volume of 120 mio. EUR, a total of 2.64 mio. EUR of direct and indirect freight cost were recorded in Dynamics AX. Previously, an automatic charge ensured that the total freight costs were recorded in the inventory accounts in the company’s balance sheet.

Rather than using automatic charge codes, the same result can be achieved by making use of the costing sheet functionality in the inventory module. How this can be realized is illustrated in the following.

Step 1
The first step is to link your products with a cost group.

Step 2
After linking your products with a cost group you can refer to this cost group in the costing sheet simply by selecting this cost group in the corresponding field.

Step 3
Thereafter a surcharge node needs to be setup. This node is linked to the COP node which includes the TG cost group specified before. Once this link is established the surcharge percentage needs to be specified. In this example I use a surcharge of 2%.
EN_16-4 EN_16-5

Step 4
Finally, the ledger accounts need to be setup in the posting window. The accounts used here are the same that were used in the previous post for the automatic freight cost allocation.

With this setup, Dynamics AX is posting a freight allocation when purchase order packing slips are posted.
EN_16-7This is different from the previous approach where the freight allocation was posted at the time the vendor invoice was posted.

After recording the vendor invoice and the indirect freight costs – as illustrated in the previous blog post – a total of 240 TEUR remains on the freight cost accounts in the profit and loss statement (total of ledger accounts 600720 to 600735).

Yet, by using the same ledger allocation rule as before also this remaining amount is shifted to the inventory accounts in the balance sheets ensuring that all incidental costs are included in a company’s inventory.