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Recognizing COGS at the time of invoicing to the customer

  • 30 June 2023
  • 7 replies
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HI ,

There is a requirement to identify the COGS at the time of invoicing to the customer instead of the time of delivery.

When the goods are delivered, the customer wants to transfer the inventory costs to a WIP account, and they want to remove them from the WIP and record them as COGS when they identify the sales.

Is there a method to accomplish the above in IFS?


The attempt to use a GL automatic posting rule by stating sales as the original code string and reversing the WIP and record COGS as automatic posting rows failed since the amounts for sales and the amount that needs to be subtracted from WIP are different.
 

Highly appreciate your inputs here

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Best answer by Thomas Peterson 30 June 2023, 18:28

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N
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Hi @prabha.ruberu ,

I believe you can use ‘Delay cost of goods sold’ functionality’ for this requirement. Refer below screen preview for easy reference.

 

Best Regards

Narmada

T
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Hi, 

Yes, this can be done. I’ve used the following several times for different clients. 

IFS customer order has a concept of confirm deliveries / delivery confirmation.  In this process we delay the invoice process until after the delivery is confirmed.  For example, delay invoice till he goods arrive or till the work is done.  Its an option on the customer order and also defaulted from the customer. The customer setting is on the customer / order area of data.   After the delivery is confirmed, we can then continue the process and invoice the customer. 

For the COGS side, as noted in the above posting the company has an option to delay COGS until the delivery is confirmed.  

The solution to your question includes a combination of the confirm delivery process and the company setting to delay cogs until delivery is confirmed.   In short, cogs and the revenue (invoice) are both delayed until the confirm delivery process is completed.    You still need to create the invoice - usually right after the confirm delivery, 

 

Best regards, 

Thomas

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Hi @Narmada and @Thomas Peterson ,

 

Thank you so much for your valuable inputs.

When I try to set “Delay cost of goods sold to delivery conformation” it gives me below errors.

Please note that I have 2 lines in my CO,one is supply code Purch Order dir and other line is an invent order and for that part cost level is “Cost Per Lot Batch”.

 

 

Is there a method to use this setting in the aforementioned circumstances?or any reasons against disallowing the setting of a delay COGS for those circumstances.

 

Thank you.

 

Best Regards,

prabha

 

 

T
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Userlevel 7
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Hi, 

 

This is a limitation. IFS does not support that type of supply code with the delivery confirmation process.     I did some investigation on this previously for a client.   It would require an enhancement to fully support that process. The modification appears to be fairly easy.

Best regards, 

Thomas

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@Thomas Peterson Thank you so much.

J
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You could also consider using the Outstanding Sales functionality. Basically you would do the COGS posting at the time of the delivery and then use the Outsanding sales functionality to post the revenue with an interim voucher based on the delivery. This way you get the COGS and the revenue to the same month even if the invoice has not yet been created.

Outstanding sales is done monthly, so this is not exactly what you asked for.    

M
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Hello I have a question regarding interim sales voucher;

 

The scenario is that in a intercompany workflow, the PO contains 6 lines.

 

  • supplier delivers goods from Jan to June (1/6 every month)
  • customer receives a line each month. 
  • Invoice will be sent by supplier in june

Through arrival registration, cost for Jan to june can be booked in accounting. In the supplier company, we want to book revenue from Jan to June in the accounts - if i use interim vouchers for Jan and revenues (= delivered not yet invoiced) are posted to GL at the end of Jan, then in Feb it will get reversed.

 

Since in Feb there won’t be any invoicing done by supplier, will the revenues of Jan + Feb (2 deliveries will be made for 2 lines of PO at the end of Feb) be posted again in the interim voucher at the end of Feb? 

 

Thank you for your help

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