Attributing external costs to products

[scotrodg]

Good morning All

We frequently import goods, mainly from the E.U. but occasionally from the middle or far east.

More often than not we arrange the shipping ourselves as A: it is cheaper and B: we can organise it to suit our own needs and capacity.

Is there any way to attribute the shipping costs to the product through the purchase order system, or does it have to be done using manual adjustments?

Cheers in advance

Rodger

[brucedenney]

Erm, no but sort of, but maybe, kinda.

There is NO system for adding additional purchase costs on a product to a purchase order.

However, what you can do is to have the product in stock in multiple forms and use bills of materials to add on costs.

BOMS (Bills of materials) are really for assemblies, but you can use them in more creative ways.

We have a product "WidgetPack" WIDPACK it is mad up of a 1 WID001 Widget A and 2 WID002 Widget B. The traditional use of a BOM is to transfer stock from WID001 and WID002 to make a WIDPACK, this is basic use.
You can go a step further and create a nonstock item for LABOUR and add in the amount used to the BOM, now the cost of the WIDPACK is the Parts and some LABOUR.

You can do the same thing with shipping/duty costs.

Have the part in its raw state "FOBWID" and Add on a DUTY and a SHIP cost to make the final cost of WID001

[scotrodg]

Cheers Bruce

I have experimented with this and it is a realistic option, probably the option we will have to use. On a software package I used previously there was an option to tie the shipping P.O. to the parts P.O. and the cost of shipping was split evenly across the quantity of parts, thus giving a "true cost" of the parts.
The only real issue here is that as we already have the parts on our stock system we would have to reverse engineer by creating a new primary part to add the shipping element to which I can see causing problems. Will have a wee experiment around the BOM option and respond here if I think I can work out a sensible option without causing too much confusion for the team here.

Rodger

[brucedenney]

If you want to change the value of the parts in stock, you can adjust them out then adjust them back in.

You can do this using CSV files so it is not as much hassle as it sounds.

[spannerthumbs]

We have Sage50 accounting professional (latest version) and I am trying to make more use of inventory and BOMs. So far we have been successful at piloting it and getting stock (based on BOM relationships) to decrement when a machine is assembled. I would however like to follow the advice here and add labour, external plating costs and fastenings (nuts and bolts) either as stock or more likely non-stock items into the BOM, but think I must be taking the wrong approach, or overestimating the capabilities of Sage BOMs. I can create the BOM using stock and non stock items but I cant find a way to total the cot of constituent elements of the BOM. Two questions:

If I have some nested assemblies that have the correct BOMs can I get the costs to role up to the finished item. The field on the finished product (and every other part) is not a calculated value - should I be using a different field that recognises the parts associated by the BOM relationships?

Is there a way of dealing with nuts and bolts which are very difficult to keep count of. We don't need to worry about re-ordering as our supplier visits and manages the stock levels, but we would like to include the applicable costs in the final assembly, and have a way to value what is in stores and not get in a mess when we transfer out when product is fully manufactured and enters finished stock?
Any suggestions of what works for other people gratefully received.

[brucedenney]

The costing happens on the stock transactions (an MI Manufacturing IN) is should always be the cost of the items used to make the Item

All sub assemblies and assemblies are costed this way.

Nuts and bolts are normally treated as free stock, ie non stock items.

The last cost price is set when a transfer is done (typically an MI or GI) until you make a transfer it remains unchanged. It uses stock on a FIFO basis so if you have older stock at a lower price until you start using the higher cost stock, the last cost price of the BOM will not change.