Sunday, 14 October 2007

When to use Item Charge ?

Item Charge is used to record the cost for distributing, handling and transportation of items, such as:
1) Insurance
2) Freight Cost
3) Custom Duties

These costs will add to the direct unit cost of the item purchased or sold, thus will affect the cost of goods sold and proft calculation. For example, transportation agent who delivers items from supplier bills you on the transportation charges. You can use Item Charge to assign the transportation charges to the items received. When the Item Charge is posted, it will be added to the cost of the items received, thus make the cost of the item more expensive. The same concept can be applied to the Sales Transaction.

Navision allow you to post the Item Charge seperately from the purchase or sales document. You can post the purchase or sales documents first and post the Item Charge later when you have receive the relevant documents to incur more charges to the purchase or sales. In other words, item charges can be assigned to the items that have been posted as receipt and invoice, or even after the item has been sold.

No comments: