Tip of the Month for: August 2019
Assigning Costs on Special Charges
Starting with last fall's release of Answers, Special Charges can now be assigned a cost if desired, along with a price. Special Charges Maintenance will now allow entering a default Unit Cost on records to be defaulted onto orders, quotes and in kits the same as it does for a default Unit Price. However, a default Unit Cost is still not required when setting up a Special Charge as many Special Charges may still not have a direct cost that can be attributed to them.
However, if you do plan on setting a default Unit Cost or entering/overriding the cost of the Special Charge on line items or within kits on orders and quotes, then you also need to assign the proper General Ledger Account numbers to be debited when sold such as a Cost of Goods Sold type account as well as an account to be credited when sold. The credit side would be similar to that of an Inventory Asset account for actual inventory items but is not likely to be an inventory account. Instead it will likely point to an account where the charges or expenses for this type of charge are posted when they are brought into the system such as thru Accounts Payable.
Since Special Charges can now carry both a price and a cost
when desired, you may want to re-think assigning these a
product code if they have never had one before if you want
to track them and have them included in Sales Analysis.
One reason that Special Charges often had their
product codes left blank in the past was because they could
not really represent a true gross margin, thus possibly
distorting some Sales Analysis totals.
Now with the option to carry both a price and cost,
you may want some Special Charges tracked in Sales Analysis,
however this is not required,
and the product code field can still be left blank/zero on
Special Charges to keep them out of Sales Analysis,
regardless of whether cost are assigned to them or not.