Why you remove the inbound freight from expense sub tab and put together in items? is the freight cost in sub tab expense can't be applied also with the items if we don't move them?
what happens if you fullfil items after you receive the product and later change the landed cost inbound freight fee? For example. We put $10 for inbound freight and buy 10 items equaling $1/item then change the inbound freight on the item receipt to $5, that drops the landed cost to $0.50/pc. Every order we send between those changes has the wrong landed cost. Do those get updated? It seems like it would not retroactively change the landed cost?
Thank you for this video it is super helpful. If we know the cost of freight before even sending a PO to a vendor, can we skip the item receipt piece of this process and just add freight as a non-inventory line item on the Purchase Order even though we are being billed by a different third party?
Exactly my thoughts! If the shipping for $70.00 would have been attached to the $3,400.00 ($3,470.00), then the implied COGS would have been the $3,740.00 when the sale occurs. But the fact that the G/L has two separate line items in the inventory account, leaves you wondering what the COGS would look like when the sale occurs.
@@EdValenciaWhen you sell one of the ipads, it will move $340 from asset account to COGS like normal, but also $70 / 10 = $7 from the asset account to the COGS. It will track the item's average cost as $347 on the item record.
This is an interesting question. The freight bill itself will always impact the A/P account as well as the freight expense account. On the receipt record, if you are using the transaction method and linking the receipt to the freight bill, it will capitalize the actual cost of the freight into the value of the inventory item based on your allocation method. Feel free to reach out to us for additional clarification. The video does not fully address the estimated landed cost method and it’s associate g/l impacts and we’d be happy to discuss that with you in more detail.
I do have two question, 1. the vendor of freight fee should not be the same as purchased, so they can't directly enter in the same vendor. 2. If the land cost including duty and other import fee, for duty it must be for each line item and the import fee are share by all items based on the weight. So How can I add two fee in one purchased at the same time?
There are lots of problems with this method. Because inventory freight is a separate line, the cost of goods sold won't be accurate. Also, on the item receipt, this presentation assumes one person is doing the item receiving person knows the PO or the actual bill, which is not what the real world runs, certainly not recommended for a control perspective.
That was a crisp presentation..Perfect!! Thank You so much..
Why you remove the inbound freight from expense sub tab and put together in items? is the freight cost in sub tab expense can't be applied also with the items if we don't move them?
what happens if you fullfil items after you receive the product and later change the landed cost inbound freight fee? For example. We put $10 for inbound freight and buy 10 items equaling $1/item then change the inbound freight on the item receipt to $5, that drops the landed cost to $0.50/pc. Every order we send between those changes has the wrong landed cost. Do those get updated? It seems like it would not retroactively change the landed cost?
Thank you for this video it is super helpful. If we know the cost of freight before even sending a PO to a vendor, can we skip the item receipt piece of this process and just add freight as a non-inventory line item on the Purchase Order even though we are being billed by a different third party?
I would say it might be best to just create a standalone bill if the bill is coming from a different party other than the vendor.
What would be the cogs when you sell the item. Does the gl impact of IF will include landed cost within cogs.
Exactly my thoughts! If the shipping for $70.00 would have been attached to the $3,400.00 ($3,470.00), then the implied COGS would have been the $3,740.00 when the sale occurs. But the fact that the G/L has two separate line items in the inventory account, leaves you wondering what the COGS would look like when the sale occurs.
@@EdValenciaWhen you sell one of the ipads, it will move $340 from asset account to COGS like normal, but also $70 / 10 = $7 from the asset account to the COGS. It will track the item's average cost as $347 on the item record.
How come the freight bill doesnt impact the GL AP account. How would we know which vendor the freight bill is going to?
This is an interesting question. The freight bill itself will always impact the A/P account as well as the freight expense account. On the receipt record, if you are using the transaction method and linking the receipt to the freight bill, it will capitalize the actual cost of the freight into the value of the inventory item based on your allocation method. Feel free to reach out to us for additional clarification. The video does not fully address the estimated landed cost method and it’s associate g/l impacts and we’d be happy to discuss that with you in more detail.
What if you have multiple item receipts?
I do have two question, 1. the vendor of freight fee should not be the same as purchased, so they can't directly enter in the same vendor. 2. If the land cost including duty and other import fee, for duty it must be for each line item and the import fee are share by all items based on the weight. So How can I add two fee in one purchased at the same time?
1. you can link the reception with a bill from another vendor.
There are lots of problems with this method. Because inventory freight is a separate line, the cost of goods sold won't be accurate. Also, on the item receipt, this presentation assumes one person is doing the item receiving person knows the PO or the actual bill, which is not what the real world runs, certainly not recommended for a control perspective.