Distribute Invoice Cost Window - Inventory PO

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An additional charge, freight, for example, is often charged by the Vendor for a particular Stock Item on the Inventory Purchase Order.  Recording such a charge is described in the Vendor Invoice Distribution Window.  Sometimes, however, it may be desirable to spread an additional charge from the Vendor across all Stock Items on the Purchase Order such as a single delivery charge that is not itemized per Stock Item.  In such a case, click the Distribute Cost button on the Vendor Deposit, Invoice, or Operating Expense Window when entering a Vendor Invoice on an Inventory Purchase Order to display the Distribute Invoice Cost Window.  The Distribute Invoice Cost Window is used to allocate the total cost across all Stock Items under a variety of conditions.

 

dist inv cost window

Enter the total amount of the charge from the Vendor into the Distribute Amount field.

 

When the cost of the charge is distributed to the Stock Items, Design Manager can either affect the cost of the merchandise or the cost of the freight for the Stock Items as determined by the Distribute To selection.  For example, if Freight is selected in the Distribute To menu, Design Manager will increase the freight for each Stock Item by the distributed amount.

 

The Add to Existing Amount and Replace Existing Amount options determine whether Design Manager will increase the existing value of the merchandise or freight or remove the current cost and replace it with the new distributed amount.  For example, if the Stock Items on the Purchase Order each already have an associated Freight amount, the Add to Existing Amount will increase the Freight by the distributed amount while the Replace Existing Amount will use only the new distributed amount.

 

Weighted Against and Evenly indicate how the distribution is to occur.  The Weighted Against option will proportionally allocate the Distribute Amount based upon either the merchandise or freight for each Stock Item on the Purchase Order.  Evenly will simply divide the Distribute Amount by the total number of Stock Items and allocate that portion to each Stock Item.  Examples may help in understanding how each selection works.

 

Weighted Against:  There are two Stock Items on the Purchase Order with Estimated Merchandise Costs of 500.00 and 100.00, respectively, the Distribute Amount is 10.00, and Merchandise is selected.  Upon distributing, 8.33 will be allocated to the first Stock Item as follows:  500.00/600.00 X 10.00 = 8.33.  In the same logic, 1.67 will be allocated to the second  Stock Item since 100.00/600.00  X 10.00 = 1.67. Note:  If a particular Stock Item does not have any cost of the selected type (i.e., Merchandise or Freight), it will not receive any of the distributed cost!
Evenly:  If the Evenly option was selected when distributing the same 100.00 against the two  Stock Items above, each Stock Item would be allocated 50.00 as 100.00/2 = 50.00.

 

Deciding which distribution should be used comes down to whether or not the actual cost of the charge per Stock Item is of greater importance than having each Stock Item receive a portion of the charge.  If so, the Weighted Against is a more accurate distribution while the Evenly distribution insures that each Stock Item receives at least some portion of the charge.