If you have a cost related to the acquisition of inventory and you want to attribute it as landed cost to your inventory, this article explains how to do it.
A common scenario is that you have freight cost (or other cost related to shipment) related to incoming shipments and you want to record that as the cost of your inventoried products. The freight cost is for multiple shipments and it would be hard to separate the cost by each product in the shipments. But if you have any other cost that you want to attribute to the inventoried products, the method described in this article applies.
Versa allow you to relate bill items to incoming shipment receipts and record as the cost of acquiring the products. First activate the setting called Allocate Bill Item Costs to Shipment Receipts in Setup, Feature Setting.
Once this setting is turned on, when you are recording a bill item( for example, a bill coming from your freight carriers), check the checkbox Allocate Bill Item Costs to Shipment Receipts, then you can pick one or more related shipment receipts this cost is for.
Search for a posted shipment receipts using the PO number and find the correct shipment receipts to allocate to. You can choose one or more shipment receipts.
Once the shipment receipts are picked, instead of posting the expense to an expense account (as normal bills would do), the related asset sub-account for the products on all the shipment receipts selected would be posted(to increase the cost of the products). The result GL entry would be a debit inventory asset account for the product and credit accounts payable. If you are operating in the FIFO inventory costing mode, every time a shipment receipt is posted, a new FIFO bucket is created for each of the products received. After the bill with the freight cost is posted, the FIFO bucket created for the shipment receipts would be updated. You can view the cost for a FIFO bucket by searching for the product under Search Inventoried Products, and then view the FIFO cost information by clicking on the quantity under On Hand. The on-hand view shows you all the current FIFO buckets created for a product. Click on the number under Value to view more details. You will be able to see the new cost (posted due to the bill) reflected in the on-hand view.
If multiple shipment receipts are chosen, the cost for the bill line would be distributed to the shipment receipts proportionally according to the value of the product received (quantity times unit costs on POs). If a shipment receipt contains multiple lines for multiple products, the amount to attribute to each line and for each product is further distributed proportionally based on the value for each line.
If some units of the inventories products are sold or shipped before the freight bill is posted, the application would identify units that are sold vs units still in inventory. For units that are sold, the cost is posted to the COGS expense account for the product. For units still in inventory, the cost is posted to the inventory asset account as described above.