Enhancements in Inventory Management

Transcription

1 SAP Business One PUBLIC Enhancements in Inventory Management Release Family 8.8 Applicable Releases: SAP Business One 8.8 and Higher All Countries English December 2010

2 Table of Contents Introduction... 3 Non-Based Goods Returns Transactions... 4 Non-Based Goods Return... 4 Non-Based A/P Credit Memo... 5 A/P Credit Memo Fully Based on Goods Returns... 6 Enhancements in Standard Costing... 8 Small s Handling... 8 Enhancements in Moving Average Costing Deliveries Based on Sales Returns GRPOs Based on Purchase Returns Enhancements in FIFO Item Transactions Special Cases Enhancements in Purchase Accounting Purchase Accounting with Perpetual Inventory Purchase Accounting with Non-Perpetual Inventory Copyrights, Trademarks, and Disclaimers SAP AG

3 Introduction This document describes enhancements implemented in inventory related functions in SAP Business One 8.8. The enhancements were implemented in the following features: Transactions created by non-based goods receipts Enhancements in Standard Costing Enhancements in Moving Average Costing Purchase Accounting Transactions involving FIFO items Reflection of standard item transactions in Cost of Goods Sold and Inventory accounts SAP AG

4 Non-Based Goods Returns Transactions Non based purchase returns are either Goods Return or A/P Credit Memo that are not based on other document, such as Goods Receipt PO or A/P Invoice. Following are the different scenarios where non-based purchase returns are created, in SAP Business One 8.8 and in comparison to the behavior exists in earlier releases of SAP Business One. Non-Based Goods Return In SAP Business One releases earlier than SAP Business One 8.8, when creating non-based Goods Return for moving average item in SAP Business One release earlier than 8.8, the journal entry created by the goods return document reflects the values (unit price and freight charges) entered in the goods return document, regardless the current value of the item. In case freight charges are also included in the document, it is reflected in the expense allocation account and/or negative inventory account. Starting from SAP Business One 8.8, the value of items returned in non-based Goods Return is the current item cost calculated for the item and not the unit price entered in the Goods Return document. In the following table you may find comparison of the accounts and values involved in the non-based Goods Return transaction in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Inventory Account Allocation Account Expense Allocation Account Price Difference Account Negative Inventory Adjustments Account Credited based on the last calculated moving average price Debited based on the last calculated moving average price N/A N/A N/A Credited based on the row total plus freight charges in the Goods Return Debited based on the row total in the Goods Return document Debited or credited by the freight charges in the Goods Return document Debited or credited by the document total including freight charges minus the amount posted to the inventory account Debited or credited by the document total including freight charges minus the amount posted to the inventory account SAP AG

5 In the following table you may find comparison of the accounts and values involved in the transaction created by non-based Goods Return for Standard item in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Inventory Account Credited based on the actual item cost Credited based on the actual item cost Allocation Account Debited based on actual item cost Debited based on the row total in the Goods Return document Expense Allocation Account N/A Debited or credited by the freight charges in the document Variance Account N/A Debited or credited by the document value including freight charges minus the amount posted to the inventory account Non-Based A/P Credit Memo In SAP Business One releases earlier than SAP Business One 8.8, when creating non-based A/P Credit memo for Moving Average item, the journal entry created by the document is based on the values entered in the document and not on the current value of the returned items. Starting from SAP Business One 8.8, the values in the journal entry created by non-based A/P Credit Memo are based on the current value calculated for the returned items. In the following table you may find comparison of the accounts and values involved in the transaction created by non-based A/P Credit Memo for Moving Average item in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Inventory Account Price Difference Account Negative Inventory Adjustments Account Credited based on the last calculated moving average price Debited or credited by the document value including freight charges minus the amount posted to the inventory account Debited or credited by the document value, including freight charges minus the amount posted to the inventory account Credited based on the row total plus freight charges in the Goods Return Debited or credited by the document value including freight charges minus the amount posted to the inventory account Debited or credited by the document total including freight charges minus the amount posted to the inventory account SAP AG

6 A/P Credit Memo Fully Based on Goods Returns In the following table you may find comparison of the accounts and values involved in the journal entry created by A/P Credit Memo that is fully based on Goods Return created for Moving Average item in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Allocation Account Expense Allocation Account Price Difference Account Negative Inventory Adjustments Account Credited by the amount posted to the account when the goods return was created. N/A Credited or debited by the document total including freight charges minus the amount posted to the inventory account (in the goods return) Credited or debited by the document total including freight charges minus the amount posted to the inventory account (in the goods return) Credited by the amount posted to the account when the goods return was created. Credited by the freight charges in the document. N/A N/A In the following table you may find comparison of the accounts and values involved in the transaction created by A/P Credit Memo that is fully based on Goods Return created for Standard item in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Allocation Account Expense Allocation Account Variance Account Credited by the amount posted to the account when the goods return was created. N/A Credited or debited by the document total including freight charges minus the amount posted to the inventory account (in the goods return) Credited by the amount posted to the account when the goods return was created. Credited by the document freight charges N/A SAP AG

7 In the following table you may find comparison of the accounts and values involved in the transaction created by A/P Credit Memo that is fully based on Goods Return created for FIFO item in SAP Business One releases prior to 8.8 and SAP Business One 8.8: Account SAP Business One 8.8 SAP Business One 2007 Allocation Account Price Difference Account Negative Inventory Adjustments Account Credited by the amount posted to the account when the goods return was created. Credited or debited by the document total including freight charges minus the amount posted to the inventory account (in the goods return) Credited or debited by the document total including freight charges minus the amount posted to the inventory account (in the goods return) Credited by the amount posted to the account when the goods return was created. N/A N/A Note Since in SAP Business One 8.8 the journal entry created by Goods Return is taking into account the current value of the item, and not the price entered in the document, the above described behavior applies whether the item price is manually changed in the A/P Credit Memo after basing it on the Goods Return or not. SAP AG

8 Enhancements in Standard Costing The behavior of the following scenarios related to standard valuation method has been enhanced in SAP Business One 8.8: Small values handling: Item quantity turns zero but inventory value remains positive. Multiple Return documents based on a single Delivery document brings the open quantity of the delivery to zero, but the Cost of Goods Sold account balance is not zeroed accordingly. Item cost is changed after a delivery is created and before a return based on that delivery is added Small s Handling Item quantity turns zero but inventory value remains positive - in previous SAP Business One releases, there are certain scenarios where the inventory value of a standard item remains positive even though the item quantity is zero. Example Display settings: Prices: four digits after the decimal dot Amounts: two digits after the decimal dot Doc. Cost Transaction Cumulative Cumulative GRPO Goods Return Goods Return Goods Return In this example, the balance of the Cost of Goods Sold account is debit 0.01, although the inventory value is zero. SAP AG

9 In SAP Business One 8.8 the inventory value is calculated as the sum of the value of all transactions. The system recognizes if an outbound transaction brings the item quantity to zero, in such case, the inventory value of this item turns zero as well. The scenario demonstrated in the above example is handled in SAP Business One 8.8 as follows: # Doc. Cost Transaction Cumulative Cumulative 1 GRPO Goods Return 3 Goods Return 4 Goods Return With the last goods return, the Allocation account is debited with 3.34, and the Inventory account is credited accordingly. Multiple returns based on a delivery brings the open quantity of the delivery to zero, but the Cost of Goods Sold account balance is not zeroed accordingly in previous SAP Business One releases when a delivery for quantity greater than one is partially drowned into returns several times, until the open quantity in the delivery turns zero, the Cost of Goods Sold account is not zeroed accordingly. SAP Business One 8.8 recognizes when the returned quantity brings the open quantity of the delivery to zero, and the transaction resulting from the return document handles any small values that might cause inconsistency between the open quantity of the delivery and the balance of the Cost of Goods Sold account. Example The following table demonstrates the system behavior in SAP Business One releases prior to SAP Business One 8.8: Doc. Item Cost Debit Credit Delivery COGS Acct Inventory Acct Return # Inventory Acct COGS Acct Return # Inventory Acct COGS Acct Return # Inventory Acct COGS Acct Open = 0 COGS Acct. Balance = 0.01 SAP AG

10 SAP Business One 8.8 recognizes that return no. 3 zeros the open quantity in the delivery, and therefore the transaction created by return no. 3 clears any small differences from the Cost of Goods Sold account: Doc. Item Cost Debit Credit Delivery COGS Acct Inventory Acct Return # Inventory Acct COGS Acct Return # Inventory Acct COGS Acct Return #3 = Last Return Inventory Acct COGS Acct Open = 0 COGS Acct. Balance = 0.00 When posting Inventory Revaluation transaction of Price Change type to a standard item and then creating a return based on delivery, the item cost in the target document might be different from the item cost in the base document SAP Business One handles this scenario, while considering the different inventory levels of the item before the return is created. The following examples demonstrate the behavior in previous SAP Business One releases and the enhanced behavior implemented in SAP Business One 8.8, according to the Available quantity status: Example 1 This example demonstrates the scenario where the Available quantity of the standard item is positive at the time the Return document is added: 1. Goods Receipt PO for = 10 and Unit Price = 15 is posted for standard item (it brings the Available quantity of the item to 10). 2. Delivery for = 6 is added (Available quantity turns 4) 3. Inventory Revaluation transaction of Price Change type for New Cost = 16 is posted. 4. Return fully based on the delivery created in step 2 is added. In previous releases of SAP Business One, the return created in step 4 resulted with the following journal entry: Sales Returns Account 16*6 = 96 (= New Cost*) Cost of Goods Sold 16*6 = 96 (= New Cost*) This transaction does not reflect the item cost at the time the base document was created. In SAP Business One 8.8 the transaction created by the return added in step 4 reflects the item cost used at the time the delivery (that is the base document) was created: Sales Returns Account 16*6 = 96 (= New Cost*) Variance Account = 6 (=Sales Returns Cost of Goods Sold) Cost of Goods Sold 15*6 = 90 (= Item cost from base document*) SAP AG

11 Example 2 This example demonstrates the scenario where the Available quantity of the standard item is negative and will remain negative or turn zero once the return is added: 1. Goods Receipt PO for = 10 and Unit Price = 15 is posted for standard item (it brings the Available quantity of the item to 10). 2. Delivery for = 6 is added (Available quantity turns 4) 3. Inventory Revaluation transaction of Price Change type for New Cost = 16 is posted. 4. Delivery for = 25 is created (Available quantity turns -21) 5. Return fully based on the delivery created in step 2 is added (Available quantity turns -15) In previous releases of SAP Business One, the return created in step 5 resulted with the following journal entry: Sales Returns Account 16*6 = 96 (= New Cost*) Cost of Goods Sold 16*6 = 96 (= New Cost*) This transaction does not reflect the item cost at the time the base document was created. In SAP Business One 8.8 the transaction created by the return added in step 5 reflects the item cost used at the time the delivery (that is the base document) was created and the inventory level of the item: Sales Returns Account 16*6 = 96 (= New Cost*) Negative Inventory Adj. Acct Cost of Goods Sold = 6 (=Sales Returns Cost of Goods Sold) 15*6 = 90 (= Item cost from base document*) Example 3 This example demonstrates the scenario where the Available quantity of the standard item is negative before a return is added and will turn positive once the return is added: 1. Goods Receipt PO for = 10 and Unit Price = 15 is posted for standard item (it brings the Available quantity of the item to 10). 2. Delivery for = 6 is added (Available quantity turns 4) 3. Inventory Revaluation transaction of Price Change type for New Cost = 16 is posted. 4. Delivery for = 5 is created (Available quantity turns -1) 5. Return fully based on the delivery created in step 2 is added (Available quantity turns 5) SAP AG

12 In previous releases of SAP Business One, the return created in step 5 resulted with the following journal entry: Sales Returns Account 16*6 = 96 (= New Cost*) Cost of Goods Sold 16*6 = 96 (= New Cost*) This transaction does not reflect the item cost at the time the base document was created. In SAP Business One 8.8 the transaction created by the return added in step 5 reflects the item cost used at the time the delivery (that is the base document) was created, and the inventory level of the item: Sales Returns Account 16*6 = 96 (= New Cost*) Negative Inventory Adj. Acct Variance Account Cost of Goods Sold 1 = (= Sales Returns for the quantity in negative zone Cost of Goods Sold in negative zone) 5 = (= Sales Returns for the quantity in positive zone Cost of Goods Sold in positive zone 15*6 = 90 (= Item cost from base document*) SAP AG

13 Enhancements in Moving Average Costing The behavior of the following scenarios related to the moving average valuation method has been enhanced in SAP Business One 8.8: Deliveries based on sales returns GRPOs based on purchase returns Deliveries Based on Sales Returns In releases prior to SAP Business One 8.8, a target document draws the inventory value from the base document, except for deliveries, which are based on non-based sales returns. Deliveries utilize the current cost price of the issuing warehouse. In SAP Business One 8.8, the application behavior is enhanced and a target document draws inventory value from the base document, including the scenario of deliveries based on sales returns. Example You have performed the following actions in the application: 1. You managed the item cost by warehouse. 2. You managed the item in different warehouses with different cost prices. 3. You received a sales return, for example, a faulty product sent back from your customer, and you created a non-based return document and returned the product to warehouse You re-delivered the item as a replacement of the faulty product by drawing the sales return fully to a delivery, and you changed the issuing warehouse to 01. The following descriptions demonstrate the application behavior in SAP Business One releases prior to SAP Business One 8.8: As the table below shows, the cost price the delivery document utilized is the current cost price of warehouse 01. Doc. Warehouse Cost Transaction Cumulative (Per Warehouse) Cumulative (Per Warehouse) GRPO #1 GRPO #2 Sales Return Delivery (Based on Sales Return) SAP AG

14 The following descriptions demonstrate the enhanced behavior in SAP Business One 8.8: As the table below shows, the cost price used by the delivery document is copied from the cost price in the sales return on which the delivery is based. Doc. Warehouse Cost Transaction Cumulative (Per Warehouse) Cumulative (Per Warehouse) GRPO #1 GRPO #2 Sales Return Delivery (Based on Sales Return) Note If the quantity to be issued by the delivery equals the in-stock quantity in the issuing warehouse (warehouse 01 in this example), the current cost price is used instead of the cost price from the sales return. This behavior ensures that the stock value is updated to null when the in-stock quantity reaches zero. GRPOs Based on Purchase Returns In SAP Business One 8.8, non-based purchase returns utilize the current cost price for issuing items and not the unit price stated in the document, as is the case in releases prior to SAP Business One 8.8. When a non-based purchase return is fully drawn to a GRPO, the cost price used in the purchase return is taken into the GRPO and used as the cost price. In releases prior to SAP Business One 8.8, the unit price on the purchase return is taken into the GRPO instead. Example You have performed the following actions in the application: 1. You created a GRPO for the goods you received. 2. You created a goods return document. 3. You copied the goods return fully to a GRPO. SAP AG

15 The following descriptions demonstrate the application behavior in SAP Business One releases prior to SAP Business One 8.8: As the table below shows, the cost price used in both the purchase return and GRPO #2 is the unit price you specified for the item in the purchase return document. Doc. Cost Unit Price Transaction Cumulative Cumulative GRPO # Purchase Return GRPO #2 (Based on Purchase Return) The following descriptions demonstrate the enhanced behavior in SAP Business One 8.8: As the table below shows, the cost price used in both the purchase return and GRPO #2 is the current cost price in the warehouse. Doc. Cost Unit Price Transaction Cumulative Cumulative GRPO # Purchase Return GRPO #2 (Based on Purchase Return) SAP AG

16 Enhancements in FIFO Item Transactions In SAP Business One releases earlier than SAP Business One 8.8, when a FIFO item is returned by creating a return based on a delivery, or an A/R credit memo based on an A/R invoice, a new FIFO layer is added at the end of the FIFO stack, the same way as if the item was just purchased. It means that the returned item will be delivered last, even if originally it is older than items appearing earlier in the FIFO stack. In SAP Business One 8.8, this behavior is changed, and whenever a FIFO item is returned by based return or based A/R credit memo, the returned layer is added right before the original layer. This behavior also applies in the following cases: When creating an inventory transfer for a FIFO item from a layer that is not the latest layer. In this case, the transferred layer is added right before the original layer in the target warehouse. Note This behavior applies whether you manage item cost per warehouse or not. When posting an inventory revaluation transaction of type inventory debit/credit for a partial quantity of a FIFO layer. In this case, the original layer is reduced by the revaluated quantity, and a new layer is added for the revaluated quantity and the revaluated price right before the original layer. The following examples demonstrate the behavior used in previous SAP Business One releases and the new behavior implemented in SAP Business One 8.8, in the most common scenarios. Example 1 This example demonstrates a return of a FIFO item from an old layer: Four FIFO layers were received and delivered as follows: Layer Original Open Layer Unit Total Open A return for six items was created based on a delivery created for layer no. 1. In SAP Business One releases earlier than SAP Business One 8.8, layer no. 4 is added: Layer Original Open Layer Unit Total Open Although the items returned in layer no. 4 are actually the oldest (originally from layer no. 1) they will be delivered last. SAP AG

17 ... Enhancements in Inventory Management In SAP Business One 8.8 this behavior is changed, and whenever a FIFO item is returned by based return or based A/R credit memo, the returned layer is added right before the original layer. Following the above example, here is the illustration of the return document according to the new behavior implemented in SAP Business One 8.8: Original Layer New Layer Original Open Layer Unit Total Open N/A The next time the item is delivered, the layer of the returned items is delivered first, as these items are currently the oldest in the FIFO stack. For the above table, for example, the delivery sequence would then be: i. The returned layer: new layer 1 ii. The original layer: new layer 2 iii. Late layers: new layer 3 and new layer 4 The following table reflects the FIFO layer status after a delivery of 7 items in SAP Business One 8.8: Original Layer New Layer Original Open Layer Unit Total Open N/A SAP AG

18 Example 2 This example demonstrates the system behavior when FIFO layers are split. The following FIFO layers were created by goods receipt POs: Layer Document Open Layer Unit Total Open 1 GRPO GRPO GRPO GRPO You have performed the following actions for this FIFO item: i. You created a delivery of 8 units of this item. ii. iii. You drew 6 units out of layer no.1 into an A/P invoice, and you changed the unit price from 100 to 110. You created a delivery of 12 units of this item. iv. You created a return for the 8 units, based on the delivery in step 1. The following descriptions demonstrate the behavior in SAP Business One releases prior to SAP Business One 8.8: In step 2, you revalued some of the items of layer no. 1 and thus split this layer into two layers with different unit values new layer no.1 and new layer no.2. The following table shows the open layers after you performed step 2. Original Layer New Layer Open Layer Unit Total Open N/A I n step 3, you issued 12 units of the item in the following sequence: 1. Two (2) units from new layer no.1 with a unit value of Six (6) units from new layer no.2, with a unit value of Four (4) units from new layer no.3, with a unit value of 95 In step 4, you received a return from the delivery you issued in step 1, and the returned items were added as a new layer after all the other layers. The unit value of this layer is 100, because they were previously issued from layer no.1. SAP AG

19 The following table shows the open layers of this FIFO item after you have performed all the above operations in the application: Original Layer New Layer Open Layer Unit Total Open N/A The following descriptions demonstrate the behavior in SAP Business One 8.8: In step 2, you revalued some of the items of layer no. 1 and thus split this layer into two layers with different unit values new layer no.1 and new layer no.2. The following table shows the open layers after you performed step 2. Original Layer New Layer Open Layer Unit Total Open N/A In step 3, you issued 12 units of the item in the following sequence: 1. Six (6) units from new layer no.1 with the unit value of Two (2) units from new layer no.2, with the unit value of Four (4) units from new layer no.3, with the unit value of 95 In step 4, you received a return from the delivery you issued in step 1, and the returned items were added as a new layer before all the other layers. The unit value of this layer is 100, because they were previously issued from layer no.1. SAP AG

20 The following table shows the open layers of this FIFO item after you have performed all the above operations in the application: Original Layer New Layer Open Layer Unit Total Open N/A Example 3 This example illustrates how SAP Business One 8.8 handles inventory transfers created for FIFO items originating from an older layer. The following transactions have been posted for a FIFO item: Document From Whse To Whse Qty Unit Total Whse 01 Total Whse 02 1 GRPO GRPO AR Inv. 02 (1) Inv Trans AR CR based on row no Delivery 02 (1) 2 9 The delivery in row no. 6 issues the same item appearing in the inventory transfer in row no. 4, as this item is originally from the oldest layer created for the item. SAP AG

21 Example 4 This example demonstrates the enhancement in the formulation of inventory revaluation transaction of type inventory debit/credit. The following table demonstrates the behavior in previous SAP Business One releases: Layer Original Open Layer Unit Total Open Comments Inventory revaluation transaction of type Inventory Debit/Credit was created for quantity of 2 and debit/credit of 4. As a result: The original layer is closed A new layer is created for the original quantity. The unit value is calculated as follows: (50+4)/5 = 10.8 In SAP Business One 8.8 the scenario described above is handled as follows: Layer Original Open Layer Unit Total Open Comments An inventory revaluation transaction of type inventory debit/credit was created for a quantity of 2 and a debit/credit of 4. As a result: The original layer is reduced by the revaluated quantity A new layer is created for the revaluated quantity. The unit value is calculated as follows: (2X10+4)/2 = 12 Total: 5 54 The total value is the same as before. SAP AG

22 Special Cases In certain scenarios it is impossible to identify the originating layer when attempting to return items from this layer. In such cases the return transaction creates a new layer at the end of the FIFO stack. Example 1 You create a return based on a delivery that was created while in negative inventory. In such a case, an originating layer cannot be identified, even if the return is created while in positive inventory. Example 2 In previous SAP Business One releases the originating layer information for deliveries was not saved. Therefore, after the upgrade to SAP Business One 8.8, when you create a return based on a delivery that was created before the upgrade took place, this return results in a layer at the end of the FIFO stack. SAP AG

23 Enhancements in Purchase Accounting Purchase accounting is a mechanism which allows the direct monitoring of the total purchase expense via the profit and loss account. Depends on the localization, purchase accounts posting system can be managed either in companies who manage perpetual inventory system or in companies who manage non-perpetual inventory system. Following are the enhancements related to purchase accounting that have been implemented in SAP Business One 8.8. Purchase Accounting with Perpetual Inventory Following are the changes implemented in SAP Business One 8.8 related to companies who manage both perpetual inventory system and purchase accounts posting system (the checkboxes Use Perpetual Inventory and Use Purchase Accounts Posting System are selected in Administration System Initialization Company Details Basic Initialization tab): The Purchase Offset Account is renamed to Cost of Goods Purchased. This change applies on both new companies created in SAP Business One 8.8, and upgraded companies. The account is defined in: o o o Administration Setup Financials G/L Account Determination Inventory tab Administration Setup Inventory Item Groups - Setup Accounting tab Administration Setup Inventory Warehouses - Setup Accounting tab In new companies created in SAP Business One 8.8, the Expense Offset Account is removed from: o o Administration Setup Financials G/L Account Determination Inventory tab Administration Setup Inventory Item Groups - Setup Accounting tab o Administration Setup Inventory Warehouses - Setup Accounting tab For upgrading companies, the Expense Offset Account is still available after the upgrade to SAP Business One 8.8 is complete. The Purchase Balance Account is added in SAP Business One 8.8 to new and upgraded companies. This account is available in: o o o Administration Setup Financials G/L Account Determination Inventory tab Administration Setup Inventory Item Groups - Setup Accounting tab Administration Setup Inventory Warehouses - Setup Accounting tab SAP AG

24 The following examples demonstrate the enhancements implemented in the purchasing related transactions: Example 1 Goods Receipt PO was created for standard item (Item Cost = 3) = 1, and Unit Price = 10. Following is the journal entry created once the document is added: In releases prior to SAP Business One 8.8: Allocation Account 10 Inventory Account 3 Variance Account 7 Purchase Offset Account 3 Purchase Account 3 Allocation Account 10 Inventory Account 3 Variance Account 7 Cost of Goods Purchased 3 Purchase Balance Account 7 Purchase Account 10 The above goods receipt PO is copied into A/P invoice, where the unit price has been changed to 12. The following journal entry takes place in releases prior to SAP Business One 8.8: Vendor 12 Allocation Account 10 Variance Account 2 Vendor 12 Allocation Account 10 Variance Account 2 Purchase Balance Account 2 Purchase Account 2 SAP AG

25 Example 2 Goods Receipt PO was created for a moving-average item, = 1, and Unit Price = 10. Following is the journal entry created once the document is added. In releases prior to SAP Business One 8.8: Allocation Account 10 Inventory Account 10 Purchase Offset Account 10 Purchase Account 10 Allocation Account 10 Inventory Account 10 Cost of Goods Purchased 10 Purchase Account 10 The above goods receipt PO is copied into A/P invoice, after a delivery for quantity of 1 was created. The unit price in the A/P invoice has been changed to 15. The following journal entry takes place in releases prior to SAP Business One 8.8: Vendor 15 Allocation Account 10 Price Differences Account 5 Vendor 15 Allocation Account 10 Price Differences Account 5 Purchase Balance Account 5 Purchase Account 5 SAP AG

26 Example 3 Goods Receipt PO was created for a moving-average item, = 1, Unit Price = 10, and freight charges = 5. Following is the journal entry created once the document is added. In releases prior to SAP Business One 8.8: Allocation Account 10 Expense Clearing Account 5 Inventory Account 15 Purchase Offset Account 15 Purchase Account 10 Expense Offset Account 5 Allocation Account 10 Expense Clearing Account 5 Inventory Account 15 Cost of Goods Purchased 15 Purchase Account 15 The above goods receipt PO is copied into A/P invoice, after a delivery for quantity of 1 was created. The unit price in the A/P invoice has been changed to 15, and freight charges of 10 were added. The following journal entry takes place in releases prior to SAP Business One 8.8: Vendor 25 Allocation Account 10 Expense Clearing Account 5 Price Difference Account 10 Vendor 25 Allocation Account 10 Expense Clearing Account 5 Price Difference Account 10 Purchase Balance Account 10 Purchase Account 10 SAP AG

27 Example 4 Goods receipt PO is created for moving-average item for quantity = 1, Unit Price = 10, and freight charges = 7. The Available quantity = -10 and the item cost = 5. The following journal entry has been created in releases prior to SAP Business One 8.8: Allocation Account 10 Expense Clearing Account 7 Inventory Account 5 Negative Inv. Adjustment Acct 12 Purchase Account 5 Purchase Offset Account 5 Allocation Account 10 Expense Clearing Account 7 Inventory Account 5 Negative Inv. Adjustment Acct 12 Purchase Account 17 Cost of Goods Purchased 5 Purchase Balance Account 12 Example 5 A/P credit memo is created for moving-average item, for quantity = 1, unit price =7, and freight charges = 2. The Available quantity = 6 and item cost = 12. Following is the journal entry created once the document is added. In releases prior to SAP Business One 8.8: Vendor 9 Inventory Account 9 Purchase Return Account 9 Purchase Offset Account 7 Expense Offset account 2 SAP AG

28 Vendor 9 Inventory Account 2 Price Difference Account 7 Purchase Offset Account 9 Cost of Goods Purchased 2 Purchase Balance Account 7 Example 6 Landed Costs document is created for moving-average item with positive inventory level based on goods receipt PO. Actual Customs = 30. The following journal entry is created once the document is added. In releases prior to SAP Business One 8.8: Inventory Account 30 Customs Allocation Account 30 Purchase Account 30 Purchase Offset Account 30 Inventory Account 30 Customs Allocation Account 30 Purchase Account 30 Cost of Goods Purchased 30 Example 7 Landed Costs document is created based on goods receipt PO for quantity = 10, while the Available quantity = 4. Actual Customs = 30. The following journal entry takes place once the document is added. In releases prior to SAP Business One 8.8: Inventory Account 12 Customs Allocation Account 30 Price Differences Account 18 Purchase Account 12 Purchase Offset Account 12 SAP AG

29 Inventory Account 12 Customs Allocation Account 30 Price Differences Account 18 Purchase Account 30 Cost of Goods Purchased 12 Purchase Balance Account 18 Example 8 Landed Cost document for = 10 is created based on goods receipt PO. Actual Customs = 30. The inventory level of the item is negative. The following journal entry is created once the document is added. In releases prior to SAP Business One 8.8: Inventory Account 30 Negative Inv. Adjustments Acct 30 Inventory Account 30 Negative Inv. Adjustments Acct 30 Purchase Account 30 Purchase Balance Account 30 Example 9 Goods receipt PO is created for quantity = 3, and unit price = 10. Then the goods receipt PO is closed. Following is the journal entry created once the document is added. In releases prior to SAP Business One 8.8: Inventory Account 30 Allocation Account 30 Purchase Account 30 Purchase Offset Account 30 Inventory Account 30 Allocation Account 30 Purchase Account 30 Cost of Goods Purchased 30 SAP AG

30 Once closing the goods receipt PO the following journal entry is created. In releases prior to SAP Business One 8.8: Allocation Account 30 Goods Clearing Account 30 Allocation Account 30 Goods Clearing Account 30 Purchase Account 30 Goods Clearing Account 30 Purchase Accounting with Non-Perpetual Inventory Following are the changes implemented in SAP Beeline One 8.8 related to companies who manage non-perpetual inventory system and purchase accounts posting system (the checkbox Use Perpetual Inventory is not selected and the checkbox Use Purchase Accounts Posting System is selected in Administration System Initialization Company Details Basic Initialization tab): In new companies created in SAP Business One 8.8, the Price Difference Account, Exchange Rate Differences Account, Goods Clearing Account, and Expense Offset Account are removed from: o o Administration Setup Financials G/L Account Determination Inventory tab Administration Setup Inventory Item Groups - Setup Accounting tab o Administration Setup Inventory Warehouses - Setup Accounting tab The above mentioned accounts are available in upgraded companies, but purchasing transactions created after the upgrade to SAP Business One 8.8 takes place are not posted to these accounts anymore. Following are examples for purchase related transactions that have been enhanced in SAP Business One 8.8: Example 1 Goods receipt PO created for quantity = 1, and unit price = 10. Following is the journal entry created in both SAP Business One 8.8 and releases prior to SAP Business One 8.8: Purchase Account 10 Purchase Offset Account 10 SAP AG

31 A delivery for the item is created, and then A/P Invoice based on the goods receipt PO is added, The unit price in the A/P invoice is changed to 15. Following is the journal entry created once the A/P invoice is added. In releases prior to SAP Business One 8.8: Vendor 15 Purchase Offset Account 10 Price Differences Account 5 Vendor 15 Purchase Offset Account 10 Price Account 5 Example 2 Goods receipt PO for quantity = 3 and unit price = 10, was created. Following is the journal entry created in both SAP Business One 8.8 and releases prior to SAP Business One 8.8: Purchase Account 30 Purchase Offset Account 30 A delivery for the item, quantity = 1 is created, and then A/P Invoice based on the goods receipt PO is added. The unit price in the A/P invoice is changed to 15, freight charges = 10. Following is the journal entry created once the A/P invoice is added. In releases prior to SAP Business One 8.8: Vendor 55 Purchase Offset Account 30 Purchase Account 10 Expense (freight) 10 Price Difference Account 5 Vendor 55 Purchase Offset Account 30 Purchase Account 15 Expense (freight) 10 SAP AG

32 Example 3 Goods receipt PO is created for quantity = 3 and unit price = 10. Following is the journal entry created in both SAP Business One 8.8 and releases prior to SAP Business One 8.8: Purchase Account 30 Purchase Offset Account 30 Goods return document is created based on the goods receipt PO. The unit price is changed to 4. Following is the journal entry created when the goods return is added. in releases prior to SAP Business One 8.8: Purchase Account 12 Purchase Offset Account 12 Purchase Account 30 Purchase Offset Account 30 Example 4 Goods receipt PO is created for quantity = 3 and unit price = 10. Following is the journal entry created in both SAP Business One 8.8 and releases prior to SAP Business One 8.8: Purchase Account 30 Purchase Offset Account 30 Following is the journal entry added when closing the goods receipt PO. In releases prior to SAP Business One 8.8: Purchase Offset Account 30 Goods Clearing Account 30 Purchase Account 30 Purchase Offset Account 30 SAP AG

33 Example 5 Goods return is created for quantity = 3 and unit price = 10. Following is the journal entry created in both SAP Business One 8.8 and releases prior to SAP Business One 8.8: Purchase Offset Account 30 Purchase Account 30 The following transaction takes place when closing the goods return document. In releases prior to SAP Business One 8.8: Goods Clearing Account 30 Purchase Offset Account 30 Purchase Account 30 Purchase Offset Account 30 SAP AG

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