Trace and Understand COGS from Sales Invoices

Overview

GoldFinch FIFO Costing offers specific costing calculations and allows for the COGS of Sales Invoices to be adjusted when Purchase Invoices or Work Orders are posted after the Sales Shipment.  

1. Each layer of COGS can be traced back to the inbound inventory.

2. COGS is adjusted automatically by the "Adjust Cost" routine when the inbound inventory cost is updated due to a Purchase Invoice or finished Work Order.

3. Any layer of inbound inventory cost can be corrected, at any time, using the Inventory Revaluation Journal, updating all subsequent outbound COGS automatically.

4. All cost adjustments are posted using historical posting dates.  If the historical posting date is from a closed accounting period, the "Allow Posting From" date from "Company Setup" is used.

5. Unit Cost on the Sales Invoice Lines is updated automatically with the cost adjustments.

Cost Entries in Sales Invoice

From Sales Invoice, navigate to the Sales Invoice Line.

Go to the Cost Entries (CE) section.

From the Cost Entries (CE) section, navigate to Item Ledger Entry (ILE), this is the outbound ILE.

From the outbound ILE, navigate to the Inbound ILE using the Item Application Entries (IAE) related list.

One outbound ILE can use multiple inbound ILEs. The IAE table also displays the Quantity used from each of the inbound ILEs.

One inbound ILE can have multiple Cost Entries (CE). Cost Entries can be Expected, Invoiced, or Adjustments.

• Expected Cost

  • For Purchase items, when the Whse. Receipt is posted, a CE with an Expected Cost will be created. The Expected Cost comes from the Purchase Order.

  • For Work Order items, when the output is posted, a CE with an Expected Cost will be created. The Expected Cost comes from the Work Order.

• Invoiced Cost

  • For Purchase items, when the Purchase Invoice is posted, a CE with an Invoiced Cost and a negative Expected Cost, will be created.  

  • For Work Order items, when the Work Order is finished, a CE with an Invoiced Cost and a negative Expected Cost will be created.  

• Adjustments

  • "Pending Cost Adj." will be checked if the quantity represented by the inbound ILE is already consumed. All inbound ILEs with "Pending Cost Adj." checked will be processed by the nightly scheduled "Adjust Cost" routine to update the COGS of all subsequent outbound ILEs.

• Total Cost is Expected Cost + Invoiced Cost

• Unit Cost = Total Cost / Quantity

All inbound ILEs for the outbound ILE are used to calculate COGS for the Sales Invoice Line.