Average cost

Accounting and inventory IFRS/GAAP suite for SMB. General questions. See 1C:AccountingSuite details

#1
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Is there a way to fix the cost of sales.
Besides re-posting

 
#2
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Hello,

What do you mean by "fix"? What's the expected behavior? Are you using a FIFO item? In this case your first in is costed at $1 per unit, so the first out is also costed at $1 / unit.

You can use the Inventory Adjustment transaction to change inventory cost.

Best,

Konstantin

 
#3
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no
I did not change the settings of products (in download demo)
product has weighted average cost

 
#4
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Nikolay,

Another way you can get to that average cost is if you create transactions in the following sequence:

1) Bill 12/1/14 - 100 @ $1 / each
2) Sales Invoice 12/4/14 - $70 (the cost at this moment is still $1)
3) Bill 12/3/14 - 110 @ $1.1 / each (the system doesn't go back and recalculate cost in the Sales Invoice. You can repost the Sales Invoice and the cost will be recalculated to $73.50 - 70 * $1.05)

Please let us know if this answers your question.

Konstantin

 
#5
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The problem known and old.
I find it difficult find a description of the problem in English
because I badly I know language
I hope for your understanding, I point out a link to an old article in Russian

<removed as rules violation>

From my experience in the implementation of accounting systems in the USA shows that the user can not accept your proposed solution

First, the cost of goods should not depend on the order in which the documents taken into account
Secondly, the procedure for recosting cost after violation of chronological order of costing can not be daunting

The first assertion.
Naturally, that procedure for accounting documents is important, but in view of the selected time interval. In the above article describes a situation in which this interval is equal to a month. This is the Russian version, is rarely used in the United States, which uses an interval - one day.
Ie average cost of sold units, and the end-day balance of goods in this day is the same. Average cost are calculated based on the balance of goods at the beginning of the day plus all the receipt of the goods at the day. Regardless of the chronological order accounting documents. And when the document was posted - the same day or later (the next day or next week)

The second assertion
Variant of reposting of documents is very complex
- You first need to determine what documents you need to repost
- after that determine the list of related documents, for example, deposit and payment, which will have to repost also
- then cancel post all these found documents in the correct order
- after that post all these documents in the correct order

Ideally, this is the system performs all necessary actions in underground mode without user intervention
At worst, he should be able to run a procedure that performs the necessary calculations and generate records accounting registers.

 
#6
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Nikolay, thank you for this explanation.

This is a very interesting subject. We asked our accounting partner what they think about the subject. Some mid-market systems (Dynamic GP, for instance) do perform the re-calculation you are describing.

Konstantin

 
#7
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Nikolay, below is the response from our accounting partner in the US.

Hope this helps.

Konstantin

===

The overall response to this issue is yes the system should go back and recalculate the average cost that is what most systems do (i.e. Netsuite).  Having said that, in most instances this is avoided for the following reasons.

1)      If you are using a goods receipt process (i.e. the receipt of goods is a separate transaction from the bill) then the inventory costing is determined at the time of goods receipt).


DR Inventory
  CR Inventory received not yet billed.

Usually the unit cost is based on the PO and that is usually matched with the bill (3 way match).  If it the actually bill amount is different the delta should be written off to a variance account.

Usually there is not a need to back date a goods receipt but if you do the system should update the average costing.

2)      Typical companies close on a monthly basis (more important if you have inventory).   During the monthly close inventory is reconciled and all goods receipts and bills are entered for the month.  Once the month is closed not changes should be permitted for the closed periods (A bill can no longer be posted to that period).

Let me know if that makes sense.  Also just an FYI this issue gets super complex if you offer LIFO costing (yet another reason to never offer LIFO).

 
#8
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In projects where I work, is used FIFO and Weighted Average
Exactly Weighted Average, and not Moving Average that you released.

In my projects almost always is used partial & separate Purchase/Sales posting, therefore is used Expected & Actual cost

I am extremely interested in having that it is available in your program
especially given that you intend realize Assembly Orders.

 
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